79 Shared & Co-Sponsored Sites

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SHARED & CO-SPONSORED SITES

In the minds of some budding entrepreneurs, running their own e-commerce business conjures the image of a solitary cowboy riding on the wide open prairie. As a practical matter, however, you will find many cases when both new and established businesses benefit from cooperative relationships, whether with suppliers, customers, complementary businesses, or even competitors. The benefits can include lower risks and costs for the individual firms and unique marketing opportunities through co-branding and cross-pro-motion.

TYPES OF RELATIONSHIPS

As with other sorts of joint ventures, shared and co-sponsored Web sites make sense when there is a strategic fit between the participating companies. One example is when two unlike businesses have a vested interest in a single outcome, such as if a large online retailer partners with a major package-delivery service to build a special site for their combined customers. The logic here might be that easy delivery will benefit both companies by increasing sales or customer satisfaction.

Other times, co-sponsors may be in related lines of business, perhaps newspapers and television, and the goal is to combine the unique strengths of each in order to reduce costs. The result might be an entertainment news site featuring content from both sponsors.

Still another approach is a partnership of unequals, where one company is well-known in a market and the other is relatively unknown. Here the lesser-known company benefits from the association with a recognized brand, easing its entry into new markets. For its part, the better-known company may receive side revenue or access to technology or specialized skills it lacks. In all cases the key is to harness each participant's strengths so that all will gain.

CHOOSING A GOOD PARTNER

E-commerce firms often have a range of potential partners. Since some will be more compatible—and the results more profitable—than others, e-commerce businesses benefit from developing standards and criteria, either formal or informal, that help identify the best matches. The conventional wisdom of brand marketing applies here: if customers have bad associations between two brands, even ones that are strong in their own right, it can damage both. To appreciate this insight, you need only consider the prospect of Haagen-Dazs teaming up with Pennzoil.

Often co-sponsorship depends on both (or multiple) parties having something unique to contribute besides their brand names. Valuable assets brought to the arrangement may be content for the site, personnel to develop and manage it, hardware and infrastructure, mutual linking with established sites (cross-promotion), or financial backing. These assets matter both for the initial building of the site as well as its continuing upkeep. Potential partners must also examine possibilities for future engagements beyond the joint site at hand. If there are deep complementary skills and assets, a co-sponsored site may be a platform for any number of larger joint ventures, as a San Antonio newspaper and TV station found after they first joined forces on the Web in 1999. The two media outlets gradually stepped up their involvement and, in the process, created their city's most visited local site.

MANAGING SHARED SITE DEVELOPMENT

If you decide to produce a co-sponsored site, you should be prepared for a healthy dose of coordinating diverse resources, managing schedules, and otherwise proactively guiding the process. Since an ordinary self-produced Web site requires all of these skills, you can expect that it will be all the more complicated when people at different firms are responsible for different parts of the project.

Among the decisions you will have to make are whether to create a whole new stand-alone site, or whether to embed the co-sponsored site within one or more existing sites. In many cases this decision will be minor from a technical standpoint, so the advantages mainly apply to the marketing strategy. As a rule, the shared site will get more traffic if it is integrated into existing sites that already receive many visitors. But it may also make sense to host the shared site under its own domain, particularly if it's a peripheral activity. It's also logical to have the shared site stand on its own if your intention is to create a large new audience or a highly developed shared brand independent of its sponsors. The latter examples apply if your company wishes to treat the co-sponsored site as a separate marketing channel and is not seeking cross-over from existing customers.

A related aspect to consider is whether your cosponsored site will be a long-term venture or a onetime event. Naturally, this choice can influence the total amount of investment going into the site, but also frames the scope of what such a site might include. For instance, when a group of high-profile technology firms launched a fund-raising site to collect relief money for terrorism victims, their site was primarily a response to a short-term crisis. The stand-alone site was designed very simply, with a small number of pages and a form for online donations by credit card. The sponsors, including Amazon.com, AOL Time Warner, Cisco Systems, eBay, Microsoft, and Yahoo, linked to the site in various ways from their own e-commerce and corporate sites. They likewise conducted separate publicity efforts on behalf of the fund-raising site. Other short-run sites have included information sites amid pending corporate mergers and sporting-event sites like Olympics promotions. By contrast, a site shared between AOL Latin America and Banco Itau, a major Latin American bank, was created in 2001 as an ongoing, client-facing finance portal. That site included a range of sophisticated applications for banking customers and content integrated from multiple sources.

SHARING RISKS AND GAINS

The goal of any partnership is to share resources and benefits so that each side gains from the transaction. E-commerce vendors have innumerable potential partners, so the task is to come up with criteria for selecting the best ones. A series of logistical decisions follow, including how to structure the site, how to coordinate the efforts of the partners, and how to manage it all for the long term.

FURTHER READING

Gordon, Kim T. "Partner Power." Entrepreneur, August 2001.

"A Virtual 'Vacancy' Sign." Business Week, November 21, 2000.

Wang, Karissa S. "More Local Newspapers, TV on the Same Page." Electronic Media, May 13, 2002.

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79 Shared & Co-Sponsored Sites

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