Partnership is one of the most overused terms in our industry. Go to any agency website, and you will see all of its client and vendor partners. (I wonder if Google knows just how many "partnerships" it's in right now.) But, let's keep it real here, folks: Most of these so-called partnerships are simply garden variety customer-product (or service) relationships. Just because you're engaged in a business deal with another company doesn't necessarily mean you're a partner.
So what makes a partnership? What are the benefits? What are the costs? How do you know if you're in a good one or a bad one? How do you start partnerships? How do you get out of one?
Or most importantly: Why do you even care about what partnerships you have in the first place?
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This topic really piqued my interest at last year's ad:tech San Francisco conference, where I saw Wired's Chris Anderson speaking on, of all things, tablets. The session focused on the rise of the tablet and what it means to our industry, but he said something very interesting that really had me thinking for months afterward. He said (and I paraphrase), "As industries mature, things become more specialized. As things become more specialized, more partnerships are needed. It's those who win at partnerships who will win at business."
When I got back from the conference, I took a long look at my agency's partners. We work with a lot of companies, but were any of them true partnerships? With this in mind, I spoke to the VP of sales at one of the ad networks that we really like working with and asked him about a possible partnership. Of course, he was interested in exploring this idea so we got together to speak, put our cards on the table, and looked to see where we could help each other. To his credit, he actually had a lot of good ideas that included price breaks in a tiered structure, more research help, more access to the network's best internal resources, etc. Unfortunately, we were derailed when it became obvious that the only thing I could really offer was an agreed-upon, increased spend level, which my media team just can't commit to with any single publisher.
So, to get a better sense of this issue, I turned to someone I know has a lot of experience with partnerships -- industry veteran Gian Fulgoni, chairman at comScore Inc. His definition of a partnership is companies working toward a common goal while sharing both the rewards and the risks. In his experience, it's really tough to put a good partnership together.
"Many business theorists say that most partnerships don't work," he says. "The parties never figure out the cooperation issues, the politics at play, and one side ends up working harder than the other. That leads to resentment, and it becomes a real challenge to create an equally beneficial agreement where both sides feel good about the deal."
Fulgoni says that there are two particular types of partnerships, each with its own upsides and downsides. The first is one in which there is a legally binding contract in place. Both parties agree to a joint venture agreement in which everything is clearly defined, including tax issues, costs split, etc. Fulgoni says that "these can get really complicated and time consuming. In today's day and age, you better be really sure it's worth it before you spend the time and energy it will take to get it done."
The other type is more of a cooperative relationship in which there are very simple legal agreements involved that can be easily cancelled. Both companies cooperate, incur their own costs, and figure out a percentage split when the revenue comes in. These agreements are faster to put together, and they can work really well. "On the other hand," Fulgoni warns, "it's really just an emotional commitment because it's much easier for one party to walk away."
Depending on what you're trying to do, one type of partnership might work better than the other. In either case, Fulgoni says the key to ensuring a successful partnership is to have champions at both companies who will fight hard to make it work -- especially when the hard challenges present themselves. If a partnership is just a political move or setup to enhance what one party already has, then it might not work out. In a good partnership, each company brings something that the other doesn't have. For example, in comScore's research partnership with dunnhumby, the companies combine dunnhumby's offline scanner sales data with comScore's online data to bring to market a better product than either could have independently.
To get another point of view, I spoke with Steve Parker Jr., a smart up-and-coming player in our industry and co-founder and managing partner of the agency Levelwing. Parker believes fully that great partnerships begin and end with communication. Partnership is just a fancy word for relationships, and the key to any good relationship is that you have to have good communication.
"We've had partnerships where we've done tremendous work for the other company, but we never received any feedback from them," he says. "It becomes a frustrating relationship. In order for everyone to feel good about a partnership, you really need that feedback." Parker and Fulgoni both liken a good partnership to a good marriage. If the communication isn't there, only goes one way, or is simply doused in negativity, the partnership can't work.
In terms of setting a partnership into motion, Parker says that "someone always has to take the first step. If we're the ones making the first move, we want to be honest with what we need and let the other company know how we feel they can benefit us and how we feel we can benefit them. A needs assessment is required, and if they want to go down this road, we start defining the boundaries."
You know you're in a good partnership when the initial goals are being met, Parker says. In fact, you can be in a bad relationship, but if all goals are being met, it's better than having good feelings and great communication in a partnership in which neither side is gaining anything. Ultimately, the partnership is set up for business, and that's the most important aspect.
However, there seems to be a shelf life for every partnership. Like a marriage that ends in divorce, it might have seemed like a great idea at the time. But ultimately the two parties evolve and change, and the partnership just doesn't make sense after awhile. However, if you can make a partnership really work for you, it can be extremely beneficial.
My takeaways from speaking with these two experts:
- It's important to partner with someone who needs you, as long as you also need them and together you make something better than before.
- Keep the lines of communication positive and flowing.
- Make sure the common goals are front and center in the relationship.
If you follow the above criteria, you might just win at partnerships and, ultimately, at business.
Josh Dreller is VP of media technology and analytics at Fuor Digital.
On Twitter? Follow Josh Dreller at @mediatechguy. Follow iMedia Connection at @iMediaTweet.
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