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Beyond Impressions: The Future of Marketing is Outcomes-Based
What if you could completely transform your marketing strategy to only pay for actual results rather than mere impressions? This revolutionary approach isn't just possible-it's already reshaping how the smartest brands grow. When Mike Salguero founded ButcherBox in 2015, he inadvertently stumbled upon a marketing strategy that would propel his company from $20,000 to over $2 million in monthly revenue within just two years-without outside capital. His secret? Partnership marketing, where brands pay partners only after they deliver actual sales or leads. This outcome-based approach has quietly become the competitive advantage for companies like ButcherBox, while others remain trapped in increasingly expensive bidding wars on platforms like Google and Facebook. As marketing costs skyrocket and privacy regulations tighten, Robert Glazer's "Moving to Outcomes" reveals how partnership marketing offers a more sustainable, profitable alternative to the digital marketing hamster wheel that has left so many brands exhausted and overextended.
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The Broken Digital Marketing Cycle
Digital marketing has evolved into a predictable and dysfunctional cycle that repeats with each new channel. First, innovative marketers discover a new platform and enjoy tremendous early returns. As word spreads, competition increases, driving up prices. Eventually, the channel becomes prohibitively expensive for all but the largest brands, leaving most marketers searching for the next opportunity.
DailyCandy exemplifies this pattern perfectly. Starting as a simple email newsletter in 2000, it became so influential that a single mention could launch a brand overnight. By 2008, with 1.2 million subscribers, it commanded $25,000 for a dedicated email. This pricing eventually made it irrelevant to most brands, despite its massive reach.
This cycle makes digital marketing feel like an endless game of whack-a-mole. Each time marketers find an effective channel, they must maximize returns before inevitable price inflation. Only the largest brands with the deepest pockets can sustain expensive investments across multiple channels simultaneously.
Meanwhile, marketers face mounting challenges: direct-to-consumer models have eliminated traditional intermediaries, e-commerce giants like Amazon dominate online shopping, and privacy regulations increasingly restrict data collection. The solution isn't chasing the next hot platform but diversifying marketing portfolios beyond the digital Goliaths-Google, Facebook, and Amazon (the "Triopoly")-toward partnership marketing.
Partnership marketing offers what traditional digital channels can't: predictable ROI, competitive advantages that don't disappear overnight, and relationship-based growth rather than impersonal bidding wars. Unlike performance marketing where you analyze effectiveness after spending, partnership marketing ensures you pay only after securing desired results-whether sales, leads, or customers-creating perfectly aligned incentives between brands and partners.
When properly managed, this approach delivers three key advantages: guaranteed profitability since companies set pricing upfront to ensure margin goals; scalability through technology platforms that can manage thousands of partnerships while maintaining efficiency; and sustainability as brands don't have to repeatedly bid more to maintain their advantage.
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The Evolution of Customer Acquisition
The marketing landscape has transformed dramatically since companies like Mattel mastered awareness-driven marketing. Today's partnership marketing thrives in a fundamentally altered commercial environment shaped by several key shifts in how we market, sell, and shop.
Traditionally, wholesale brands focused on creating awareness to convince vendors to stock their products rather than persuading individual consumers to buy. Brands created buzz through advertising, sold to stores, managed fulfillment, and provided customer service to vendors-not end users. Even in early e-commerce, this model prevailed with customers buying from online department stores rather than directly from brands.
Everything changed in 2011 when Dollar Shave Club disrupted the razor industry by selling affordable blades directly to consumers, bypassing traditional retail channels. Their success-12,000 signups within 48 hours and eventually a $1 billion valuation-demonstrated that companies could take products directly to consumers without established distribution networks. The COVID-19 pandemic further accelerated online shopping for previously "impossible" items like mattresses, eyeglasses, and even cars.
This direct-to-consumer revolution created a new acquisition cycle where brands sell directly to users, fulfill orders, and manage customer relationships themselves. Marketing budgets now focus on acquiring customers rather than building awareness alone. Dollar Shave Club also pioneered another innovation: the subscription model. Like Netflix with streaming media, companies selling everything from hygiene products to meat now offer subscriptions to generate consistent, recurring revenue.
This shift has popularized the lifetime value (LTV) metric, with brands viewing customers as potential long-term relationships rather than one-time transactions. Consequently, companies are willing to pay premium acquisition costs for loyal subscribers-precisely what partnership marketing excels at delivering.
As e-commerce sales tripled between 2010-2019, how customers decide what to buy transformed. Without physical stores for browsing, today's shoppers-especially younger ones-trust third-party reviewers, influencers, and digital publishers more than brand advertising. Research shows 34% of Americans read product reviews daily, and 79% trust online recommendations over friends and family.
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The Auction Problem in Digital Marketing
Richard Thaler observed how his economics professor exploited auction psychology by refusing to sell wine for less than $100 while never paying more than $35 for similar bottles himself. Auctions drive irrational behavior by creating instantaneous competition, making them effective at selling goods with uncertain value. They exploit our tendency to fixate on potential ownership and our aversion to loss-as we bid and picture ourselves owning an item, being outbid triggers a painful sense of loss that drives us to bid higher.
Research confirms this irrationality: a 2007 study found eBay auction winners overpaid by 73% compared to fixed-price options for identical items. Most businesses are caught in this same dynamic with digital marketing channels functioning as giant auctions where competitive instincts can lead to poor ROI.
The digital marketing landscape follows a dysfunctional cycle: promising new channels quickly become flooded with buyers, driving prices beyond profitability. This cycle has intensified with platforms like Facebook and Google using auction-based pricing rather than fixed rates. The impact is profound-staying competitive requires being fast, nimble, well-capitalized, and having sophisticated bidding tools.
The "winner's curse" occurs when brands competitively bid without knowing the actual revenue their campaigns will generate. Savvy companies increasingly avoid these auction-based channels, turning instead to less competitive tactics like catalogs and email where ROI remains higher. The fundamental problem is that marketers get caught up in bidding wars while losing sight of whether winning is actually worth the price.
The Triopoly of Amazon, Facebook, and Google commands 70% of all digital marketing spend, creating marketplaces of instantaneous bidding that accelerate price escalation while reducing advertiser ROI. Facebook's average ad price jumped 47% between 2020-2021, far outpacing most advertisers' profit growth. Marketing through these giants often involves multiple intermediaries and hidden fees.
Larger brands gain advantages through huge budgets, high-priced consultants, and sophisticated tools that help them avoid competitive "head" terms in favor of mid- and long-tail strategies. Just as tax law changes affect the wealthy least because they have experts to navigate them, deep-pocketed companies thrive in auction environments while smaller businesses get priced out of the digital marketplace entirely.
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The Amazon Challenge and Privacy Revolution
Every brand today competes with Amazon, which spent $22 billion on marketing in 2020 and serves 197 million monthly customers. Brands face a dilemma: they can't outspend Amazon in traditional marketing, but selling through Amazon means fierce competition with other third-party sellers (now 55% of Amazon's business) and possibly Amazon itself. Even successful Amazon sellers often lose direct customer relationships since Amazon shares limited customer data.
Partnership marketing offers an alternative strategy. Amazon's Associates program, while massive with over a million affiliate partners, relies on automation and lacks personalization. Smaller brands can exploit this weakness by building direct relationships with partners, offering optimization support, relevant content, and exclusive opportunities.
When Amazon abruptly changed its affiliate program during the COVID-19 pandemic, many brands seized the opportunity to recruit publishers seeking more stable partnerships. Amazon is now testing attribution tracking that would allow brands selling on its platform to create their own partnership programs where they manage publisher relationships directly-a trend likely to spread to other marketplaces.
Meanwhile, privacy concerns are reshaping digital marketing fundamentally. Over a decade ago, a Target manager discovered their data-driven marketing had identified a teenager's pregnancy before her own father knew. This incident exemplifies how companies have pushed "know your customer" to unsettling extremes. Today, consumers are increasingly wary of personal data collection, with 92% of Americans citing privacy concerns and 57% distrusting companies' data usage.
The global privacy reckoning began with the EU's General Data Protection Regulation (GDPR), which requires clear consent for data collection, opt-out options, and the "right to be forgotten." Similar provisions exist in California's Consumer Privacy Act, with more regulations likely coming. These laws particularly threaten businesses relying on data-driven advertising and third-party cookies, which Google Chrome will soon block.
Privacy changes disproportionately benefit the Triopoly, who collect vast amounts of first-party data with user consent. Meanwhile, partnership marketing offers a solution by focusing on contextual relevance rather than invasive targeting. When a shoe brand partners with a sneaker review site, readers expect and trust the recommendations without feeling their privacy is violated. This context-driven approach doesn't require extensive personal data to be effective, making partnership marketing increasingly valuable in a privacy-conscious world.
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The Partnership Marketing Revolution
Throughout history, technological advancements are often initially deployed by looking backward before creating entirely new opportunities. Early movies resembled filmed theatrical productions until filmmakers discovered the camera's unique capabilities. Similarly, financial lending began as a simple tool but evolved to power the global economy, while computers transformed from business calculators to the foundation of modern work.
Partnership marketing has undergone similar technological evolution, expanding beyond traditional affiliate marketing into a sophisticated channel driven by innovation. Affiliate marketing at its core is a way to pay partners who drive specific results for your business. These partners can be bloggers, review sites, media companies, mobile apps, or even other businesses that make post-purchase recommendations. When executed effectively, it's a low-risk model where brands pay only after getting desired outcomes-typically a percentage of sales or fixed price for leads.
The traditional affiliate network model functions as a technology platform that hosts programs, recruits affiliates, matches them with brands, and handles administrative functions like tracking and payments. While this consolidation saves brands from managing hundreds of individual relationships, it comes with drawbacks: surrendering control, potential conflicts of interest, and a pricing structure that takes a percentage of all revenue or commissions (historically up to 3% of sales or 30% of commissions) in perpetuity.
The limitations of traditional affiliate networks gave rise to software-as-a-service (SaaS) platforms offering similar functionality with two key differences: private labeling that removed cobranding requirements and a usage-based pricing model rather than percentage-of-sales fees. These platforms, pioneered by companies like Impact and Partnerize (founded by former network executives), targeted large brands paying substantial fees for a small group of long-term partners.
The SaaS approach separated technology from management services, similar to other digital marketing channels like search and social. While brands initially switched for cost savings, they soon discovered these platforms could manage many other types of partnerships without sharing proprietary data or paying excessive fees. This realization led companies to rebrand their affiliate programs as partnership programs, using the same infrastructure to automate previously manual partnership processes across their organizations.
Partnership marketing has reached an inflection point where companies can use automation platforms to build entirely new marketing channels. Beyond traditional affiliate relationships, these platforms can manage referral and ambassador programs, PR and influencer marketing partnerships, business development and channel partnerships, and even outcome-based relationships with agencies working with the Triopoly. This consolidation creates a scalable system for tracking and paying a wide range of business partners based on performance, representing the future of partnership marketing.
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Building Marketing Marketplaces
Partnership marketing can create scalable marketplaces similar to Uber and Airbnb's business models, where brands connect with specialized marketers who drive results on an outcome basis. This marketplace approach allows brands to test new channels without heavy upfront investment, leverage external marketing experts, and build a diversified "fat pipe" that rivals the Triopoly giants without paying auction-level prices.
A global food delivery brand demonstrated this approach through their partnership with Valpak. By onboarding Valpak onto a partnership automation platform with tracking links and QR codes, they successfully targeted small and medium-sized restaurants that were too small for their business development team. This approach allows brands to test new channels and campaigns without heavy upfront investment, leveraging external expertise while paying only for results.
Partnership marketing programs can become a "fat pipe" alternative to the Triopoly, allowing brands to deploy large marketing budgets through an automated platform. While no individual partner matches the reach of these giants, a diverse marketplace of partners on a scalable platform can collectively close the gap. The key advantage is paying for outcomes rather than inputs while diversifying traffic sources instead of depending on a single platform.
There are plenty of potential partners available across various media formats-from podcasting to AI-assisted shopping. Publishers range from moonlighting bloggers to publicly traded companies, all seeking to monetize their content. Building a good reputation for your partnership program is crucial, as partners prefer working with programs known for integrity and reliability. This reputation creates a virtuous cycle: mature programs retain and attract better publishers, delivering better outcomes for everyone involved.
Successful programs develop reputations that attract and retain the best partners, creating a virtuous cycle of growth and performance. Partners stay loyal to brands that treat them well, creating mutual benefit rather than leaving brands at the mercy of increasingly expensive digital platforms.
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The Partnership Ecosystem: Traditional and Emerging Players
Partnership marketing offers a valuable growth strategy while diversifying your marketing portfolio. Traditional partners have operated on an outcome basis for years and form the backbone of affiliate programs. These include content partners like Apartment Therapy that provide editorial coverage to introduce products and raise awareness; coupon partners like RetailMeNot that target discount-hunting buyers ready to purchase; deal partners such as Brad's Deals that spotlight specific discounted products rather than offering a large collection of coupons; loyalty partners like Rakuten that offer rewards to customers who purchase from a brand; subnetworks like BrandCycle that help affiliates monetize their platforms; and lead generation partners such as Fluent that generate qualified leads rather than direct sales.
An effective partnership marketing program incorporates several of these partner categories, each leveraged strategically depending on business goals. Beyond these traditional players, emerging partners include various channels your business likely already operates in, though typically not within a partnership marketing framework and technology platform.
Business development teams typically set revenue thresholds for partnerships, rejecting opportunities that fall below these limits as not worth the manual effort. Partnership marketing platforms solve this problem by automating tracking and payments, making even smaller partnerships ($25,000/year) viable without one-to-one management. This approach allows brands to say "yes" to smaller partners through standardized programs, aggregate value from multiple small partnerships, and use the partnership program as a proving ground before investing more resources.
Partnership marketing enables brands to work together directly in customer acquisition workflows without extensive business development processes. For example, Delta can partner with StubHub to offer flights when customers purchase event tickets in another city. Partnership marketing technology automates these B2B relationships on a scalable platform with performance-based payment, essentially creating passive income streams as brands drive sales through each other's customer acquisition funnels.
Influencer marketing has evolved from celebrity endorsements to micro-influencer partnerships, with brands increasingly seeking defined outcomes and authentic connections. Forrester research shows companies gravitating toward influencers with smaller but more engaged followings. The process of tracking, measuring, and paying influencers mirrors partnership marketing, making integration natural. Adding micro-influencers to automated partnership programs reduces financial risk through commission-based payments while achieving better ROI than working with household names.
Large media organizations like Yahoo and Vox Media now embrace performance-based marketing as a foundational revenue stream. Brands can leverage partnership marketing to secure placements with these major publishers, though these relationships require more lead time, editorial control, and sometimes flat fee guarantees alongside commissions.
Podcast advertising has grown explosively from $105 million in 2015 to over $1 billion in 2021. Modern podcast partnerships use special landing pages and tracking codes (like "www.acme.com/tim" or code "Tim" for Tim Ferriss's podcast) to measure conversions and ROI, allowing brands to prioritize high-performing placements in future campaigns.
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Strategic Applications of Partnership Marketing
Partnership marketing offers low-risk, high-ROI approaches for various business objectives, from product launches to inventory liquidation. For product launches, it provides a low-risk channel by connecting with influential content partners like bloggers, podcasters, and review sites on a performance basis. When trusted content creators showcase products to engaged audiences, it creates credibility and strong first impressions.
These partnerships can also capitalize on real-time events, as ModCloth did when Michelle Obama wore their dress-the company quickly released marketing kits to content affiliates, generating hundreds of thousands in sales. Unlike social promotions with short lifespans, well-placed product recommendations on search-oriented sites can generate long-term residual income for both publishers and brands long after the initial launch.
For inventory liquidation, partnership marketing offers cost-effective solutions without upfront fees. Brands can direct deal partners to feature discounted items to bargain-hunting audiences, moving inventory without pushing steep discounts to their own customer lists or website. During the pandemic, a sportswear brand successfully liquidated excess inventory by partnering with deal sites on progressive discounts-starting at 50% off with pre-agreed increases if sales stagnated. Beyond clearing inventory, this approach helps brands gather valuable customer information when purchases occur directly on their websites.
Modern partnership programs use sophisticated commissioning strategies rather than flat-rate commissions. Partners can be paid different rates based on their value, the specific marketing tactic used, or on an order-by-order basis. A clothing brand successfully balanced competing priorities by increasing commissions for partners who acquired new customers while lowering payouts on discounted items. This nuanced approach unexpectedly benefited both parties-partners who could segment their audiences featured full-price products to new customers to maximize commissions while driving higher profits and new customers to the brand.
As brands recognize how the Cost-Per-Acquisition framework drives better profitability and alignment, this model may expand to other marketing areas, including paid search and social media. Google has hinted to top advertisers about developing outcome-based offerings. Businesses would likely pay significantly more for actual sales than for clicks, and while Google isn't pressured to change their model now, growing direct-to-consumer and acquisition-oriented budgets might create urgency for major platforms to adopt this approach.
Partnership marketing isn't without weaknesses. While profitability remains stable as programs scale (revenue maintains a fixed ratio with marketing spend), this model won't deliver unexpected windfalls like viral content might. It's a low-risk channel that protects the downside but can limit upside potential. The industry has also faced attribution fraud issues, where partners earn commissions without adding value-through software downloads, browser extensions that manipulate referral data, phantom coupons, or trademark bidding. Most fraud occurs due to conflicts of interest and poor program management, which can be prevented with proper oversight and software controls.
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Implementing Partnership Marketing Successfully
Partnership marketing requires support across many departments that aren't accustomed to working together. To successfully implement this model, you need buy-in not just from marketing leaders but also from finance and other departments. The key is understanding what each stakeholder values and demonstrating how partnership marketing addresses their specific concerns.
To convince leadership to invest in partnership marketing, first understand what your marketing leaders specifically value-whether it's ROI, lead generation, customer acquisition, or ROAS. Demonstrate that partnership marketing pays only for outcomes generated, emphasizing that increased spend directly correlates with higher revenue. Present specific details about your proposed program, including potential partners, automation platforms, and competitor intelligence.
Finance leaders care most about ROI and operational efficiency. The partnership marketing channel requires a flexible, variable budget rather than traditional fixed quarterly allocations. Unlike other marketing channels, you don't spend upfront but pay only after outcomes are generated. Going over budget actually means the program is exceeding revenue projections. To gain finance's trust, commit to frequent reporting through dashboards showing weekly and monthly trends.
Emphasize that partnership marketing is like sales commissions-you wouldn't tell salespeople to stop selling because they've exceeded commission budgets. Setting commissions to 0% when budgets are exceeded damages partner relationships and limits profitable growth.
When recruiting existing team members to support partnership marketing, focus on how it benefits their careers. Emphasize that this emerging channel offers opportunities for early career professionals to demonstrate strategic thinking and set vision for a high-growth revenue channel. With the genuine talent shortage in partnership marketing, team members who master this channel now will become tomorrow's leaders with highly marketable skills.
Building an effective partnership marketing team presents unique challenges due to the diverse skill set required and the limited talent pool available. An effective partnership marketing manager needs multiple opposing skill sets: relationship building, partner recruitment, strategic aptitude, technological expertise, analytical capability, and compliance acumen.
The industry faces a talent shortage because traditional affiliate networks that once trained new talent are no longer growing at the same rate, while demand continues to rise. Companies need to create director, VP, and even Chief Partnership Officer positions to retain talent as the channel grows.
Rather than focusing solely on industry experience, companies should hire for aptitude, looking for candidates who excel early, learn rapidly, and have relationship-building skills. Once hired, thorough training is essential-from case studies to shadowing experienced managers to platform certification. Creating a clear career path is crucial for retention, with promotion opportunities as employees master program operations.
A dedicated partnership marketing agency offers invaluable expertise for organizations lacking in-house experience. Agencies provide immediate access to platform knowledge, partner networks, and global capabilities without the steep learning curve. They can help evaluate technologies, launch programs, and serve as an extension of in-house teams. The best agencies offer specialized partnership marketing services rather than listing it as one option on a large menu.
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The Future of Outcome-Based Marketing
In September 2008, America discovered it had placed too much trust in the housing market. For decades, mortgage-backed securities were considered stable investments, but this assumption proved catastrophically wrong. The fundamental problem? Mortgage brokers' incentives had changed, primarily through collateralized debt obligations (CDOs) that allowed banks to sell mortgages rather than keep loans on their books. This shifted their focus from finding qualified borrowers to issuing as many loans as possible.
In business, behavior almost always follows incentives-a double-edged sword particularly visible in sales. Salespeople will often structure their strategies to maximize their incentives, even when it's not best for the company. This raises a critical question: How confident are you that Google, Facebook, and Amazon are incentivized to drive results for your business?
Traditional digital marketing prioritized impressions and clicks rather than business outcomes. The industry is filled with vendors who excel at generating these metrics because they're easy to produce and brands will pay for them. Yet impressions rarely drive meaningful results-you're more likely to summit Mount Everest than click a banner ad. Despite this, American brands still spend nearly $100 billion on programmatic display ads annually.
The Triopoly doesn't need to offer guaranteed sales or leads when brands willingly pay for clicks and impressions. Like mortgage brokers following their incentives with unqualified buyers, Google and Facebook are financially incentivized to sell impressions and clicks-regardless of whether they provide comparable returns for customers.
Partnership marketing is uniquely positioned to help brands excel in today's shifting business landscape while ensuring incentive alignment between brands and marketing partners. This doesn't mean abandoning paid search or social campaigns, but acknowledging how advertising power has concentrated among a small group of players, leaving many companies with too many eggs in shrinking baskets.
Facebook's ad prices increased 47% year-over-year from 2020-2021, yet returns rarely grow at the same pace. As Pela CEO Matt Bertulli noted, "the only thing that is predictable in my business is that my paid media costs will increase next year."
Partnership marketing represents a massive opportunity similar to how Salesforce transformed sales or how Marketo and HubSpot revolutionized marketing automation. The difference is partnership marketing covers both B2B and B2C, making its potential even greater. As brands shift budgets toward outcome-oriented partnership programs, even the Triopoly will need to adapt. Don't miss this opportunity-focus on desired outcomes, find partners who deliver them, build your program on the right platform, and let incentive alignment drive success.
