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Digital Co-Branding

The “analogue world” (some call it the “real world”) has seen an increase in co-branding activities in the last few years. It has become a proven tool for pushing brand relevance and growth. But what about co-branding in a digital context? Is it a relevant strategic move for native digital brands or those interested in pushing their digital profile?

Milka chocolate bars filled with Oreo cookies, Adidas sneakers with Goodyear soles, AppleWatches with Hermes wristbands. Just three of countless examples of how more and more brands have engaged in co-operations with other brands to the advantage of both parties.

Co-branding activities can primarily serve the following three target areas:

1. Brand building/image transfer

With the aim of brand building/image transfer, the focus is on associating one's own brand with the positive attributes of the partner brand. Through the closeness of the cooperating brands, new complementary attributes of one brand are transferred to the other brand.

2. Access to technical expertise

In order to get access to technical expertise, close-knit co-operation is always required between the parties involved. Therefore, it is the rarest form of co-branding. One prominent example here is GoreTex. As an essential ingredient in high-quality clothing products, the brand’s expertise gets literally woven into the final product of its partner brand.

3. New markets/revenue growth

In order to extend your market and growth, one of the following four factors is needed: new customers, new countries' markets, new distribution channels or new price setting. This strategy was utilized for example by Western brands that did not have a global appeal when they entered new markets in Asia.

These objectives indicate why there are only a few cases of digital co-branding so far: the market conditions weren’t right yet. While digital is a growth market, co-brandings are mostly utilized in the later stages of the product life cycle and/or within saturated markets in order to get the most out of thinning margins. Furthermore, it’s also important to consider that the digital economy is to a large extent defined by a winner-takes-all mentality. A brutal competition is fought until one or a few monopolistic/oligopolistic winners dominate the market. Not exactly a set-up that favours the co-operation of equals.

Nonetheless, there are some prominent examples of digital co-branding. They can be seen as a sign of the growing maturity of the digital industry.


Facebook has recently started to endorse all of its acquired brands, namely WhatsApp and Instagram. However, first in line was the VR glasses brand “oculus” which Facebook acquired in 2014 for USD 2 billion. From very early on Facebook wanted to benefit from oculus’ image as the leading virtual reality (VR) company. While application areas of the product and the business potential of VR were still quite opaque, it was the hottest tech topic of that time and offered what Facebook’s brand needed: the image of an innovator and room to grow.

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IBM's Watson

There are only very few companies with advanced artificial intelligence (AI) capabilities and most of them are closed shops (e.g. Siri, Alexa, Cortana). An exception here is IBM’s Watson, which can be accessed by other companies. For that usage, IBM has created the “with Watson” label which is a kind of “ingredient brand” (like Intel inside). It portrays IBM as a helping hand but also as an essential driver of success.

Concluding, it can be said that there are few but very powerful co-branding best practices to be found in the digital realm. It’s safe to say that more will follow soon. While digital co-brandings can pursue the same goals as their “analogue” equivalents, they interact in a very different environment. Therefore, an individual analysis based on the potential co-operation partner’s fit is recommended to ensure both brands can benefit equally from the set-up and its outcome.

A systematic screening of goals and the intensity of a brand partnership form the basis for the efficient choice of the right partner. Building on this, the brand fit evaluates to what extent the images of the participating brands overlap. A suitable fit will give the co-branding an appeal of coherency in the eyes of customers.

The second success factor is the product fit. When both brands operate in the same product category or the new offer is similar to services for which at least one of the brands is already known, chances of success improve.

Furthermore, the target group fit is also a decisive factor for impactful co-branding. By selecting a partner brand with similar target groups, the probability that the cooperation will be seen as relevant by customers increases.

_Sören Reinert is Senior Brand Strategist at MetaDesign in Düsseldorf