Cross-promotion: features, causes of success and types of popular mechanics

Vedernikova Mariya Igorevna Postgraduate student, Saint Petersburg State University 125993, Russia, Saint Petersburg, Smolny str., 1/3 Entrance No. 7, p. 3. maria.vedernikowa@yandex.ru Other publications by this author

Cross-promo opens up a number of opportunities for companies, the main of which are: increasing brand confidence through promotions with larger and well-known partners, attracting additional customers at no significant cost, increasing brand awareness, and increasing customer satisfaction.

Introduction

Cross-promotional and marketing tool for joint sales promotion and promotion of goods and services of two or more companies at the same time ^[1]. Strictly speaking, this is one of the types of affiliate marketing that can be implemented both as part of a single campaign and on an ongoing basis: "Tactical cross-marketing is a short—term one-time collaboration between two or more companies in order to promote the products of each of them. Strategic cross-marketing is a long—term cooperation aimed at solving diverse tasks" ^[2].

Most often, no more than three companies participate in the organization of a joint cross-promo, since the presence of a larger number of participants can significantly complicate the project ^[3].

The relevance of this study lies in the analysis of the concept of "cross-promo", considering its differences from terms such as "cross-marketing" and "cross-promotions", studying the dynamics of the growth of popularity of "cross-promo" among Russian companies, as well as in the analysis of modern formats of this type of promotion.

The conducted research on the use of the term "cross-promo" allows us to conclude that the practice of its application in modern Russian marketing literature has developed in such a way that the concept of "cross-promo" has a broader meaning than "cross-promotion", however, its meaning is narrower than the term "cross-marketing".
The main difference between these three terms is the amount of interaction between different companies.

Thus, a "cross-promotion" may imply a single marketing activity aimed at solving a specific task: for example, stimulating demand for a selected product or service.

"Cross-promo" refers to active promotion within the framework of joint marketing activities aimed not only at stimulating demand, but also at increasing knowledge about the brand and interacting with the partner's base.

The concept of "cross-marketing" has an even broader meaning than "cross-promo". It is most often invested not just in joint promotion, but also in a series of marketing activities: joint events, repeated mention of a partner on various resources (both online and offline), creation of joint products, etc.

Summing up, we can conclude that cross-promo implies the promotion of goods and services of two or more companies at the same time, but does not imply such intensive interaction as in the framework of cross-marketing.

Methodology and research conditions

The research methodology is based on the analysis and synthesis of available data on cross-promos. The theoretical and methodological basis of the work is the theories and ideas of Russian scientists and practitioners in the field of marketing and PR. The author systematizes scientific, practical and methodological information about cross-promos, recommendations for organizing a successful cross-promo and the necessary factors that need to be taken into account in order to achieve the set KPIs.

The scientific novelty of the study consists in a comprehensive analysis of the following factors: the growth of the reasons for the popularity of cross-promos in Russia, the necessary components for organizing a successful campaign of this format and formulating a number of recommendations for conducting cross-promos.

Also, with the help of the Yandex Wordstat service, an analysis of the popularity of the "cross-promo" search query was conducted over the past 2 years: from December 1, 2021 to December 1, 2023.

So, if in the period from November 1 to December 1, 2021, the absolute number of search queries for the keyword "cross-promo" amounted to 755, then for the same period in 2023 — 1080 (see Fig. 1).

Figure 1 – Graph of the growth in popularity of the search query "cross-promo"

The 43% increase in the popularity of the "cross-promo" query in the search for 2 years shows that interest in this topic is steadily increasing.

Together with the "cross-promo" request, users most often search for examples of promotions, clarify that the request relates to the marketing industry, want to know about the types of cross-promotions and clarify that they are interested in promotions in Russia (see Fig. 2).

Figure 2 – Top 5 most popular search queries together with the keyword "cross-promo"

The analysis showed that the number of requests varies greatly depending on the region. Thus, residents of Moscow are looking for cross-promos the most, St. Petersburg is in second place, Kazan is in third, followed in descending order by Novosibirsk, Perm, Khimki, Nefteyugansk, Krasnodar, Krasnoyarsk, and Nizhny Novgorod closes the top ten cities where cross-promos are most often searched for (see Table 1). If in the case of Moscow and St. Petersburg, these statistics can easily be explained by the larger population and the concentration of specialists working in the field of marketing and advertising, then in other cases such a relationship was not observed. Thus, the population of Nizhny Novgorod significantly exceeds the population of Nefteyugansk, however, the number of cross-promo requests in the latter city is significantly higher, as is the regional popularity of this request.

It also seems advisable to analyze the popularity of the "cross-promo" request for each region separately. Regional popularity shows the share that a region occupies in impressions for a given word, divided by the share of all search results impressions that fell on that region. The popularity of a word or phrase equal to 100% means that the query in this region does not stand out in any way. If the popularity is more than 100%, then there is an increased interest in this topic in this region, if less than 100%, it is reduced.

Table 1 – Top 10 cities for the display of materials on request "cross-promo"

It seems logical to assume that cross-promos will continue to gain popularity among Russian companies for the following reasons:

- The cost of traffic and, consequently, customer acquisition is growing every year.

- Some target audiences of customers are difficult to find using the settings of advertising platforms, while partners may already have a database of suitable audiences.

- The growing competition in the market leads to the fact that most companies are focused on getting conversions and sales ^[4].

- By involving a large and well-known partner in cooperation, you can gain the trust of the target audience.

- Joint activities allow you to increase brand awareness among the target audience without significant budget injections.

- By offering profitable offers from partners to the audience from the company's base, you can increase the loyalty of existing customers.

- There is a "growing psychological rejection of advertising" among the audience ^[5].

Thus, the reasons for the growing popularity of cross-promo among the marketing activities of Russian companies become clear: basically, it is the desire to promote the brand, attract new customers and increase revenue. Also, during a crisis, this communication tool becomes especially relevant, since its main advantage is the ability to reduce costs by distributing them between partners.

The main part

In this section of the study, the reasons for successful cross-promos, types of mechanics and recommendations for organizing cross-promos will be considered.

Reasons for successful cross-promos: what aspects should be taken into account when planning

1. Target audience

Choosing a partner whose clients include representatives of the right target audience is the key to a successful cross-promo. This is a more significant indicator for making a decision on cooperation than all the others. Companies with a narrow target audience or working in the B2B sector need to analyze the audience of a potential partner especially carefully. It is much easier for companies with a wide target audience to choose a partner for cross-promotion. It is also important to note that cross-marketing involves combining the efforts of such organizations that do not directly compete with each other ^[6].

2. The possibility of base growth

When organizing a cross-promo, one of the main tasks, as a rule, is to attract a new audience. "The essence of cross-marketing boils down to the fact that customers of one company become potential consumers of goods and services of another at the same time," notes ^[7]. To do this, the company and the potential partner must have different bases. If the databases and the audience almost completely overlap, then such an action will not bring results: new users will not find out about the company, but existing customers of the company can see a profitable offer sent through the partner's database and take advantage of it. With a high degree of probability, they would have made an order anyway, or a discount or a bonus of a lower face value would have been required to motivate them. In this case, instead of revenue growth, the company loses the marginality of the orders made, especially if the first sale to a new client is unprofitable for the company and the calculation is made on the customer's payback due to LTV (Lifetime Value).

3. Strong partner brand

This indicator plays a particularly important role for cross-promos, the main purpose of which is to increase confidence in their own brand through joint promotions with companies with a more well-known and promoted brand. When searching for partners for such cross-promos, it is important to consider the following points:

- A potential partner should have an impeccable reputation, there have been no significant situations recently that could negatively affect the brand. Otherwise, it is advisable to wait for some time until the audience forgets about the negative story, or refuse to cooperate at all. Before making a decision, it is advisable to answer the following question: "How significant is an incident involving a potential partner for the target audience?" For example, if it is planned to organize a cross-promo with an oil refining company, but only the day before the news about an oil spill during fuel transportation by this company was released, while the selected target audience mostly cares as for the environment, it is better to postpone the issue of holding an action.

- The partner's brand should be known and, preferably, be more recognizable than their own brand. In this case, it becomes possible to increase brand awareness and gain the trust of the audience at the expense of a stronger partner.

- The niche in which the partner works should not cause a negative reaction from the target audience. So, for a business that positions itself as socially responsible, it is unthinkable to do cross-promotions with companies producing tobacco or alcohol products.

4. Profitable offer

When preparing an offer for a "cold" audience that does not yet know anything about the company and whose trust in the product has not been formed, it is important to choose the offer especially carefully. This is the only way to motivate such an audience to do a certain action: go to a website, subscribe to a newsletter or social media account, purchase a product. An advantageous offer (a free service or product, a significant discount, an increased level in the loyalty program, accrual of bonus points, etc.) will allow you to achieve your goal. The main thing is that the offer is really attractive to the target audience, otherwise the campaign will be ineffective. It is important to understand which task is a higher priority: getting revenue from the first sale to a "cold audience" or attracting customers, even if the first sale is "zero" or "minus".

Many companies now choose the option in which the first sale goes "to zero" or "to minus", and attribute the costs to marketing investments. As S.N. Mishchenko notes, "with the help of control, the costs of attracting new consumers and the profit recouping these costs can be calculated. Often, the added value is brought by the after-sales service of the product (service)" ^[8].

5. Native format

It is known that most people, to put it mildly, dislike explicit advertising, since the number of advertising messages that a person sees during the day offline and online is steadily increasing. There is an aversion to advertising and banner blindness. Therefore, it is better to make advertising messages as native as possible so that they do not differ too much from the communication format familiar to the audience. When communicating with an audience from your database, you should tell them about the partner's significant advantages and benefits of his offer. Usually, customers trust the word "partner".

It is best to complete the performance with a pleasant bonus. For example, a gift: a free gym membership for a month, a free consultation with a leading specialist, a free service, etc. Bonuses are best represented using promo codes or links with UTM tags to the pages of the partner's website. By following most of these recommendations, you will ensure a higher chance of a successful cross-promo.

6. Relevant offer for the target audience of your own database

The task of the partners is to communicate effectively with the audience from the new base. To solve the problem, the partner can send the most effective offer from his side. When agreeing on an offer, creatives and frequency of placement, it is important to try to predict the reaction of existing customers to this communication. If there is an understanding that the offer is highly likely to be irrelevant for your own audience or communication will be too frequent and intrusive, it is worth discussing this with a partner and, if it is not possible to renegotiate the terms, refuse to cooperate. For example, a partner insists that you need to make 3 mailings with his offer on the database within a month. If the average frequency of sending emails with relevant offers is once a month, it becomes obvious that such a frequency of communication will be excessive and part of the audience will unsubscribe from the mailing list. Accordingly, a certain percentage of the audience will be drawn. A forecast regarding the revenue that the company could receive if this audience remained in the database and continued to purchase goods or services with an average frequency and an average receipt will help make the right decision.

It is important to consider all 6 points so that cross-promos bring the desired results and do not cause a negative reaction from your own audience and the partner's audience.

Varieties of cross-promo mechanics

The choice of a specific cross-promo mechanic depends on the objectives of the joint campaign, the agreements of the partners and the resources available to each of them. "The depth of marketing interaction in cross-marketing may differ depending on the desire of partners to unite for short-term promotions or to create a strategic cross-marketing alliance," concludes Ya.I. Semiletova ^[9].

If the company has no experience in conducting cross-promotions, it is necessary to consider the introduction of this type of campaign as a serious change in marketing strategy. You need to prepare carefully for planning changes, because "planning involves developing a sequence of actions that allows you to achieve the desired result, setting goals and objectives, drawing up an action program, identifying the necessary resources and their sources" ^[10].

It is also possible that the resources and capabilities of one partner (base size, brand awareness, site traffic, etc.) significantly exceed the resources of the second partner. Most often, in this case, companies cooperate within the framework of affiliate marketing, which implies payment for the placement of affiliate advertising material ^[11]. The following payment schemes are possible within the framework of paid interaction:

- sale fee – CPS (cost-per-sale);

- action fee – CPA (cost-per-action);

- cost per click – CPC (cost-per-click);

- display fee – CPV (cost-per-view);

- the fee for downloading the mobile application is CPI (cost-per-install).

There are quite a few cross-promo mechanics that are actively used in practice:

1. Conducting cross-promotions

A very popular and fairly simple option, involving mutually beneficial promotion. The implementation of any promotional campaign is aimed at arousing the interest of the client by offering him additional benefits: discounts or gifts.

2. Sampling

It is a free offer of a sample product together with a product from another manufacturer. This option has shown good performance in the perfumery and cosmetics sector.

The advantages of sampling can be successfully applied in online business (adding samples when ordering any basic product), or offline. It is important that the partner's database has a target audience, but the companies are not direct competitors.

3. Organization of joint events

Almost any event is a good opportunity to realize mutual promotion. For example, a well-organized holiday can bring a lot of benefits to partners offering similar services and products. It is worth taking the choice of a partner seriously: a manufacturer of sports equipment, uniforms, or a supplier of healthy food will be a suitable option for a sports holiday.

4. Conducting joint advertising campaigns

This type of campaign involves the promotion of two or three brands using a single advertising communication. It is usually implemented as the provision of discounts for the purchase of a list of any services or goods laid out together on the supermarket counter. At the same time, products can belong to different categories, for example, pasta and sets of cups, plates or glasses. This may look like a promotion of some product item in the set. For example, it is proposed to purchase two packaged goods together and receive a discount. As a rule, such events are often implemented in large chain retailers. Recently, these actions have often been held at gas stations owned by large gas station chains.

5. Organization of a recommendation cross-promo

In this case, it is assumed that some products, more often innovative, will be promoted thanks to the recommendations of experts experienced in this market, but working in related fields. In most cases, the existence of such a partnership is due to its long-term nature, and brands interact using all available means: in commercials, booklets, on the pages of PR publications, during vivid presentations and master classes organized by manufacturers.

6. Conducting joint promotions and contests

This is the next stage of cross-promotion cooperation. After completing several mutually beneficial campaigns that have expanded both target audiences, the interacting companies are able to support various events in the future.

Also, an important recommendation for improving the company's PR promotion is the organization of thematic cross-promos ^[12].

For example, a retail chain has organized a competition, the winners of which will receive gifts from both brands. Such a move often helps to strengthen cooperation between friendly companies, as well as arouse the interest of new customers who have not previously purchased products from partner companies. O. A. Nesterenko notes that joint marketing and joint loyalty programs, as well as bonus systems and co-branding are more in demand than other formats of cooperation in a crisis ^[13].

Food manufacturers often hold excellent master classes in prestigious restaurants so that the consumer gets into the habit of buying several products made by different brands at once, for example, frozen meat delicacies and pasta.

7. Implementation of partner and loyalty programs

Today, the option of cooperation between several companies is becoming popular: a travel company, a network of gyms, a bank, etc. Using a loyalty program is another step that develops and deepens relationships with each client. As K. A. Tatarinov notes, "the purpose of each loyalty program is to encourage the buyer, encouraged by the prize, to make further purchases in the future" ^[14].

It is also important to note that the introduction of loyalty programs allows not only to maximize profits, but also to predict user behavior and future revenue ^[15].

Many companies have turned to game mechanics that make it possible to increase the effectiveness of loyalty programs by focusing on psychological perception factors ^[16].

At the same time, the expanded interaction of various companies, as a rule, increases the list of possible interesting gifts and discounts for customers. A simple example: each subscriber of the Tele2 cellular company can use discounts and partner offers from the loyalty program "More". The range of bonuses takes into account different groups of the target audience, so users can choose both jewelry as a gift, discounts on hotels, and receive bonuses at gas stations and in a large chain supermarket. As a result, this additionally motivates subscribers to log into the My Tele2 application more often.

8. Co-creation of products

This option is labor-intensive, but it is beneficial to all companies involved in the project that are jointly trying to solve customer problems.

It is important to understand the key sources of cross-promo, as well as each of its formats. A source is a form of some kind of advertising, for example, a mailing list or a news section of a website. The format demonstrates the content: a special offer, banners, holding joint contests, etc. Usually, partners select several suitable options. So, the educational service should be promoted at a training webinar. Universal options include special offers.

The number of cross-promo mechanics is quite large: from the simplest promotion to a grandiose joint event. In the article, we have considered only the most common mechanics.

The main recommendations for conducting a cross-promo

1. Analysis of cross-promo results

Even if you make every effort, the results of the cross-promo may look disappointing.It is impossible to guarantee that the partnership will bring certain revenue or the exact number of customers in advance. It is only possible to make an approximate forecast based on previously conducted promotions. It is possible that out of the projected 2,000 clicks on the site's pages, in practice about 10% of this number will turn out. It is possible that the number of customers who went to the site of a cross-promo participant from the resources of a large company will be zero. There may be several reasons: incorrectly selected audience, unsuitable offer, boring promotional materials, frequency of communication, etc. Or maybe the partner made a serious mistake, because sometimes misunderstandings arise, partners may not show their best side, show their bad faith or simply not fulfill the terms of the contract.

In this case, it is important to evaluate the quantitative results and take them into account when preparing the next cross-promos.

2. Taking advantage of gamification

Using game marketing strategies helps to attract an additional audience. If a marketer hypothesizes that potential consumers would be interested in completing any tasks in order to receive bonuses, then technical means have many possibilities that will make the gameplay more exciting and interesting. Cross-promo in the game format is definitely worth testing. As practice shows, such a campaign shows better results compared to standard mechanics. Therefore, conducting partner campaigns when using gamification in marketing allows you to get better results ^[17].

3. Building honest and long-term relationships with partners

Communicating truthful information to a partner helps to build a trusting long-term relationship. If the existing database of email newsletters contains 10,000 subscribers, then it is not necessary to inform partners that there are 10 times more of them. The results of the cross-promo, as a rule, put everything in its place.

According to experts, "effective directions of the relationship marketing concept should be used to prevent conflict and negative interactions with partners, as well as as proactive solutions" ^[18].

Also, it is not necessary to change any points of the partnership agreement during the promotion or abandon the promotion at the very last moment.

4. Coordination of advertising materials for the partner base

There is a pattern: the more often a person sees the same type of advertisements, the less interesting they are to him. Sometimes this negatively affects the success of the campaign conducted with partners. The best option would be to devote 75-80% of advertising to news about the activities of your own company, and 20-25% to special relevant offers from partners.

Conclusions and further directions of research

Cross-marketing provides excellent opportunities to ensure business promotion even during a crisis period. The manifestation of cross-marketing activity will bring results if the interacting companies are not competitors, their circle of consumers has a similar income level, and the goods successfully complement the partners' offer. In turn, using the full range of marketing opportunities, the company is more likely to become a market leader ^[19].

The formats of cross-marketing activity can be quite diverse. Each of them should take into account the specifics of the business, as well as the main tasks facing the promotion. For example, when sales are carried out on social networks, it is best to conduct a joint broadcast, raffle a prize or exchange promo codes. An offline business can test a new product on a partner's audience, as well as organize mutually beneficial promotions with other companies.

The chances of success of a cross-promo are quite high. It is only important not to limit the partnership to the exchange of promo codes, but to study the audience, try to guess its needs and satisfy requests with relevant offers. In this case, the chances of cross-promo success are significantly increased, as well as for building mutually beneficial long-term relationships with partners.