This document describes the different types of partnership frameworks I have built, launched, or observed during my time at Waze, Google, and Netflix.
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Distribution: The Best
These are the most strategic and scalable type of partnerships. At Netflix, we integrated with carriers and telecom providers around the globe. Depending on the partner, we would obtain some combination of mobile pre-loads, set-top box integration, remote control button, or a bundle.
Partnering with these types of folks gave us massive distribution and was especially crucial in under-banked areas, like Latin America, where payment method was a barrier to adoption. But by being able to pay for Netflix via your AT&T bill or your Sky UK bill, we could tap into a whole new segment.
The most important type of integration with distribution partners is bundles because they give you the widest possible reach. Bundles are the Netflix term for a package offered by a distributor that includes Netflix. In other words, you are not paying for Netflix in addition to your cable package, but instead, Netflix comes included in your cable or phone package.
I worked on two bundles in Latin America, one with (the largest ISP in Mexico and part of the behemoth America Movil Group) and (the largest pay-TV operator in Mexico.) Bundles are an important method of acquisition.
Netflix requires a marketing commitment from partners to promote new offerings. Campaigns for bundles or integrations contain a bevy of Netflix content, which partners can use at no cost to them. This is a win-win for both parties: The partner gets exciting and culturally relevant content to include in their campaigns to differentiate their offerings, and Netflix unlocks ad dollars from the partner.
Most importantly, for partners, bundles, and other types of distribution agreements drive revenue via some combination of referral fees or revenue share.
Netflix Distribution Partnership Examples
Channel: Great, but can be hard to measure.
It's important to differentiate here between channel and distribution. Distribution gives companies the broadest possible opportunity for user growth. Channel, in my definition, is different in the sense that it often incorporates partners who are tangential to your core business and not necessarily directly related. Think of Airports and Uber. Airports don't put in Uber at every WiFi spot, nor is the app available on the plane. But most major airports (at-least pre-COVID) promote Uber through offline messaging.
These types of partnerships will usually drive engagement and acquisition, but in my experience, they were often hard to measure.
The mobile GPS and Navigation App had several types of channel that helped drive user growth. Among the most popular are Broadcasters and City Governments. There is no money exchanged in these partnerships. Rather Waze and the counterpart work on engagements that drive user growth. The Waze kicked off in 2014. The idea was to get cities and Waze to share traffic information. This would, in theory, lead to better maps on Waze and would help cover blindspots for cities (Waze has up to date information on potholes, for example. So cities could use this data to address local issues.) Broadcasters would receive an SDK and a "clean" version of Waze without the Wazers, alerts, or other animations on the map. Broadcasters, like in San Francisco, would then use Waze on-air during their traffic segments. This broad exposure was pivotal in the early days of Waze for driving user growth and mainstream adoption.
The challenge with these partnerships is that it's hard to measure acquisition or engagement unless you have specific tools to do so. One such mechanism could be a redemption code or tracking specific email signups.
At Waze Carpool, we measured the impact of University Partnerships by tracking the number of people who signed up with a school address after an on-site activity, or marketing campaign kicked off (we would equip universities with marketing material and such as email templates, on-campus signage, and swag.)
We considered a school partnership "launched" after our university counterparts sent out a kick-off email to target email lists. Popular podcasts like The Joe Rogan Experience and The Portal include redemption codes as a way to track campaign/ sponsorship efficacy. Listeners of JRE can recite some of Joe's most common partnerships:
"... it's '...onnit.com back-slash Rogan. That's O-N-N-I-T....)
Another way Waze tracked impact was by seeing if there was a lift in MAU or new signups in metros where we kicked off an activation. It isn't exact, and based on your tools, you might be able to get a better measurement of your channel marketing campaigns.
Waze Carpool was a separate product within Waze (at least while I was there). The purpose of the app was to connect drivers and riders traveling in the same direction to carpool. It's worth noting that carpooling is an inverse function of affluence (at least in the United States). As such, one of the channels we prioritized was colleges, since students are price sensitive.
At the time, Waze Carpool was only available in California. So I only worked with the UC and the CSU school system. For several reasons, schools were incentivized to work with us. On the one hand, campus commuting solutions are essential for keeping students happy. As such, schools have whole departments focused on transportation solutions. Secondly, the colleges themselves are significant employers. In California, certain employers have to show a conscious effort or planning in reducing the number of vehicles going to and from the universities. So, in reality, university partnerships were two types of partnerships: students and enterprise. I'll address the second one shortly.
There was no money exchanged with universities. One of the benefits we offered was free rides or reduced rides (Waze Carpool riders would pay Drivers up to .54 cents a mile, the maximum one is allowed to expense for commuting. Waze would cover the cost and subsidized the drivers to make a partnership more appealing to universities.) In exchange for the subsidized rides, we asked the university partners to promote the app through its various channels. We created the assets: email templates, slide decks, signage, custom swag, etc.
We could measure the impact of the number of students who signed up using their school email. Of course, some students would sign in using a personal email, and some students who did register with their school email probably discovered the app through other channels. But by and large, we relied on emails AND the delta in completed rides to the school to measure campaign impact.
The second scalable approach was to work with the largest employers in the state to get distribution. Some of the largest employers I worked with were: The UC System, Sony, Google (of course), Amazon, Interscope, and several pharma companies in San Diego. As I mentioned earlier, there is legislation in California that requires employers with more than 50 people to address transportation challenges, like taking active steps to reduce the number of vehicles going to and from a work-site. Because a third-party app like Waze Carpool fulfilled this requirement, employers were open to working with us.
Similar to universities, we created robust asset packages for employers to use in promoting the app. We also provided subsidies and contests to promote the app.
The main lesson from carpool (and I am not sure how unique this is) is that you can find common incentives. Both Waze Carpool and UCLA, for example, wanted to reduce the number of vehicles heading to campus. We provided a cool, new app that works, and the partners provided the channels to a highly qualified user base.
One of my favorite campaigns was called "Carpool Madness." We worked with the UC schools (and USC) on creating a March Madness type competition among the schools. We had brackets, assets, everything in place to make it seem like a competition. The objective was to get students to carpool. Every week we sent our reports on how many miles individual schools had done the previous week. It was a fun way to motivate students and drive engagement.
Schools were engaged, and with our assets, they helped market the program, increasing Carpool sign-ups and completed rides. Each of the participating schools saw at least a 50% increase in completed rides to their campuses. In the end, Berkeley upset UC Irvine to take home the 2018 Carpool Madness Trophy.
Channel partnerships as a term didn't really exist at Netflix. The top partners were always distribution partners like Verizon, T-Mobile, and Comcast, as they provided a direct way of acquiring users.
But we did do marketing campaigns for partnerships with either hardware partners (Samsung, LG, Sony) or platform partners (Google, Microsoft, Spotify to some extent.)
Entities in both categories provided a way to access Netflix, either through being preloaded on Smart-TVs or phones. Samsung was a key partner during my time there because they wanted to use Netflix content to accentuate certain features of their new TVs or Galaxy Products. And since we were already preloaded onto those devices, it made sense for Netflix. Furthermore, as part of the licensing agreement, partners like Samsung would again have to commit to a specific ad spend.
Once again, it was a win-win as partners used engaging Netflix content in their assets, and Netflix unlocked ad dollars. The only difference was that unlike in distribution partnerships, it was harder to measure the impact on user acquisition with these hardware or platform partnerships. So we used other variables like partner ad spend, quality of idea, or perceived reach to measure impact.
(Some partners had millions of people on email lists. So while they may not have had a lot of marketing budget to commit to something "big," they could still show impact by connecting with said lists.)
Note: At Netflix, we said no more often than yes to these types of partnerships. Sometimes the idea the partner proposed didn't make sense, or it wasn't feasible in the time frame suggested, like for a new phone launch, for example. The partner idea and marketing budget they would commit were important factors for determining a go/no go. But they were by no means the only things we considered. An art more than a science.
Netflix "Channel" Partnerships
Brand / Stunt Partnerships: Only for grown-up startups.
It's been my experience that one-off (usually for a specific stunt or idea) partnerships are the most creative but are usually the least scalable and most frustrating.
The first campaign I worked on under this framework was with Interscope Records and Eminem while I was at Waze. Interscope had bought ad space from us, but they approached us with a unique idea for an upcoming Eminem album. They didn't have ad budget for this but wondered if we would be open for a media exchange.
Our focus in 2013 was on building our ad platform. Many execs were reluctant to work on a partnership that didn't drive revenue. We were already working with broadcasters and cities to some extent. Those partnerships were not driving revenue, but they were an organic fit for driving user growth.
But the idea was compelling, and Interscope promised us access to Eminem's social media channels (see below.) We presented a business case, and we got the go-ahead to do this one-off.
Using the Waze app as a medium, select retail stores were branded with Em's iconic backward "E." Of these locations, a select few were branded with a Golden E. The location of these stores changed every day, encouraging Wazers to use the app daily for a chance to discover the golden pin. At that point, they could enter to win concert tickets and other prizes. Eminem and Interscope would tweet out clues on the location of the Golden Pins, driving social engagement for both the artist and Waze.
It was a successful campaign in the sense it drove social conversation and became a trending topic. We knew it wouldn't lead to direct user acquisition, so that wasn't necessarily a success metric. That said, I don't think we would have done it again. We didn't have the resources and manpower to dedicate to campaigns that were not driving revenue.
Netflix, which is now a more mature company than Waze was in 2013, has the resources to at least contemplate these types of partnerships. Now they have a whole team dedicated to exploring Brand Partnerships. I never worked on any during my time with the streaming company. But we did have one similar case with Spotify.
Spotify wanted to work with us on branded playlists for our shows. But the problem was we couldn't measure user impact (did playlist expose listeners to the show? Did this lead to discovery? We don't know!). This wouldn't have killed the idea off the get-go, but branded playlists weren't doing anything for the narrative of the show. People who listened to The Stranger Things playlist, for example, were already fans of the show. If Spotify would have committed media dollars to promote the playlist or set up an event, or something else, then we would have been open to working with them.
Even something as simple as a branded playlist requires man-hours to review, approve, and manage assets. And we couldn't justify all of that when we had quantifiable partnerships with telcos and hardware partners.
Some partnerships can help drive user acquisition at scale. Others can lead to social conversation and top of mind relevance among consumers. The former is best for early stage startups and the latter is great for mature companies who have the resources to invest long term in brand efforts. This is a working doc so feel free to leave questions as comments!
Netflix Distribution Partnership Examples
Netflix "Channel" Partnerships