Building powerful brand alliances among seemingly unlikely partners

For example, a recent co-branding deal in the US between coffee chain Starbucks and audio-streaming business Spotify – two seemingly unrelated brands – shows that joining up two bona fide brands, especially those in diverse industries, can be a lucrative marketing strategy. 

By providing premium coffee-shop music, Starbucks incentivised Spotify users to join its loyalty program. In return, Spotify grew its user base by leveraging Starbucks’ offer of a free coffee for joining the music-streaming service.

Although marketers have been leveraging the synergistic benefits of co-branding for decades, surprisingly few studies have sought to identify potential co-branding alliances between brands belonging to different categories. 

Research presents a new construct called ‘brand transcendence’

Malhotra and Bhattacharyya introduce a new automated and scalable approach for identifying potential co-branding and brand extension opportunities using brand networks derived from publicly available Twitter followership data. They present a new construct, called ‘brand transcendence’, that measures the extent to which a brand’s followers overlap with those of other brands in a new category.

For example, the transcendence (supremacy) of a non-sports brand along any given sports category is based on the extent to which its followers overlap with those of other brands in the sports category.  

The researchers reveal cross-category branding insights in the form of brand–brand and brand–category connections, which can serve as important measures for assessing co-branding and extensions opportunities. For instance, brand–category connections capture the transcendence of brands into new categories and show that certain categories are more viable for extensions than others.

Brand–brand connections, on the other hand, provide a more granular view of transcendence by revealing the individual brands that are suitable for co-branding. 

As Malhotra explains: “The transcendence vector of Mercedes shows that the strongest brand-category connections of Mercedes are to luxury, technology and sports– making them suitable categories for extensions. 

“Then, at the brand-brand level, we find brands such as Louis Vuitton, Nike, Tissot and Chanel to have strong connections to Mercedes, making them potential candidates for co-branding.”

Says Bhattacharyya: “Overall, the core contribution of our study is a new digital approach to analysing audiences’ interests across a broad brand ecosystem. The cross-category insights generated by this approach can help researchers and practitioners avoid marketing myopia by identifying non-traditional branding opportunities that are difficult to infer from traditional survey-based approaches.” 

The Journal of Marketing is published by the American Marketing Association. You can read the full article here.