You’re probably familiar with the phrase ‘joint venture’ when it comes to business partnerships, but have you ever thought about what it means when used in the context of marketing and communications? In general, it refers to the collaboration of two or more companies or organizations to share resources, bring new products to the market, or pursue joint ventures in new areas.
A joint venture in online marketing, or simply a ‘joint venture’ is when two or more companies cooperate to create or implement a marketing strategy online. These are relationships where both organizations share ownership of the venture and are committed to its success.
Why would businesses form a joint venture? There are several benefits to doing so, including access to shared resources, gaining expertise from combining forces, and being able to spread risk and cost, just to name a few.
Shared Risks And Costs
The primary benefit of a joint venture in online marketing is that you’re essentially combining your resources to create a bigger and better entity. This can be a useful strategy when you’re starting a business or expanding an existing operation. You can take on more work than you can handle alone and have access to specialized expertise that you wouldn’t have otherwise been able to afford.
To manage the risk and cost associated with a joint venture, the organizations involved will typically use contract terms such as a ‘performance-based budget’ or PBA. A PBA is a type of agreement where you’re only paid based on the results you achieve (i.e., the number of successful marketing campaigns you launch).
Access To Specialized Expertise
One of the major benefits of a joint venture in online marketing is the ability to tap into the specialized expertise of other organizations. When two or more organizations work together, they can access resources that their individual organizations couldn’t afford individually. For instance, one organization may have a large social media following and the other may have considerable experience in SEO (Search Engine Optimization). By combining their expertise, they can achieve greater results than either could have otherwise individually achieved.
The Opportunity To Build New Expertise
As we mentioned above, a joint venture in online marketing is a way to combine the resources of two or more organizations and achieve something greater than the sum of the individual parts. This is also a way to build new expertise and possibly even discover new areas of expertise that you, as an individual, could not have accessed. For example, one organization may be an expert in SEO while the other is a digital marketer with experience in e-commerce. Through a joint venture, they could build an expert in SEO e-commerce or discover a new area of expertise such as pricing strategy in e-commerce that they could both pursue individually. Through the process of collaborating, they can also build a greater understanding of the issues that they are facing and how they can solve them.
Doing business with a local company can be a good option when searching for certain products or services. Instead of dealing with an out-of-state business, you can usually find a local company that can provide the same quality (if not better) at a lower cost. For instance, buying an umbrella from a local company instead of an out-of-state firm can help you avoid paying extra for shipping and handling charges. Buying from a local dealer means you’re not going to have to worry about your order being delayed due to bad weather or shipping problems caused by a carrier.
Broadcasting A Unified Message
One of the great things about having a joint venture in online marketing is that you’re not only able to share resources and expertise with another organization, but you can also create and implement a unified messages strategy. When two or more companies or organizations work together, they can decide on a common message that they want to project to the world and ensure that every person, company, or organization that they come in contact with will understand and appreciate what they’re trying to say.
Creating A More Distinctive Brand
To be distinctive, a brand should be able to immediately convey what it is that you’re offering while not being simplistic or clichéd. In the case of a joint venture in online marketing, the collaborators should be able to develop a unique identity that is both fitting and attractive to customers while also conveying the uniqueness of the collaboration itself. This is a lot more difficult to do when you’re working with existing brands, but it’s an important aspect of creating a successful marketing program.
The Differences In The Way JV’s And VC’s Work
There are a few key differences between a joint venture and a venture capital investment. The most important one has to do with ownership. In a joint venture, the participants agree that the relationship will be a collaborative one and that each organization or individual will have a stake in the venture. This is often reflected in the way that contracts are written where the participants own the rights to the work produced while a venture capitalist will often take a more passive role.
Another important difference between a joint venture and a venture capital investment has to do with money. A venture capitalist will typically only be interested in funding the operation of a business while a joint venture participant is more likely to be interested in forming a long-term partnership.
Hopefully, this article has given you a better understanding of what a joint venture in online marketing is and why you might want to consider it as an option for your business.