Reciprocal Advertising

Posted in Marketing and Strategy Terms, Total Reads: 517

Definition: Reciprocal Advertising

This is a kind of barter system in which the marketer pays for the services of the advertising agency by compensating them in terms of benefits such as hotel rooms, airline reservations or in terms of the product being advertised. This strategy involves mutual promotion in order to gain mutual benefits and is common in the tourism industry. It redesigned itself in the 1990s and is now widely seen in the electronic retail space.

It is also called reciprocal linking; because it is usually practised by placing links to your website on the other party’s site. In this way, the latter will be compensated on a pay-per-click basis and this is a form of affiliate marketing. In the offline world, reciprocal marketing is also called collaborative or co-op marketing or cross-promotion.

Reciprocal marketing can be practised as well by SMEs as large corporate houses. It became especially popular in the virtual marketplace during the dot-com boom. Discounts can be offered to your loyal customers at the partner(s)’site(s) and vice-versa. It is an extremely convenient and cashless transaction.

The advantages it provides to small business owners are many: adding value per customer, relatively less expensive than other marketing strategies and reduced cost in attracting new customers. However, the catch lies in finding the right partners. Partners should be complementary in terms of brand image, product portfolio and philosophy. They should also be compatible in terms of the traffic they receive on their Web sites; otherwise the arrangement may unduly benefit one and harm the other. Care should be taken to ensure that too many links do not cause brand confusion as this might adversely affect customer purchase decision. Potential partners can be found through offline methods such as attending conferences or by networking online. It helps to have a good value proposition before approaching potential partners.



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