What does the term Joint Venture mean to you?

Discussion in 'Main Joint Venture Discussion Forum' started by William Murray, Oct 30, 2013.

  1. William Murray

    William Murray Administrator Staff Member

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    I've seen many interpretations of the term Joint Venture over the years, for example if we look at the definition according to an online dictionary, Joint Venture means and I quote:

    If I pop over to wiki we get the following explanation:

    Lastly if we look at the legal definition we get the following description:

    Pretty much the same meaning worded differently...

    In marketing terms more specifically marketers who produce digital products I've seen a lot of debates on what a true joint venture is or is not and why referring to an affiliate as a JV Partner isn't right.

    They should be referred to as an affiliate, and I disagree...

    I like to simplify things and look at situations from a foundational level and here's my take on what the term Joint Venture means:

    Lets use a scenario say a digital marketer who has a product for sale or a product launch.

    In order for them to sell their product they need traffic...

    Either internally from their own lists, media buys, organic traffic or a partner / affiliate who can push traffic to the offer.

    For this scenario we have two parties
    • A digital marketer
    • An affiliate
    Exactly what assets do they have?
    • The marketer has a digital product
    • The affiliate has a list or lists and can send traffic to the marketers offer
    The tangible outcome in this scenario is profit, there's of course another asset the marketer will glean and that's a list.

    In the marketing world I've seen most perceive an affiliate as an affiliate and nothing else, which I disagree with.

    Most see a Joint Venture Partnership as two parties developing a digital product and then taking it to market.

    For example...

    A developer may create a software tool, and not have the knowledge or skills to take their product to market.

    The developer may seek out a partner in this case a marketer to take care of all the marketing aspects of a product launch therefore forming a JV Partnership.

    The tangible outcome, again is profit...

    I still see an affiliate who promotes a product as a joint venture partner.

    They have an asset they bring to the table and of course there's a tangible outcome with whom they partner with.

    Look around in your home town and you'll see collaboration and joint venture partnerships happening the whole time, be that in construction, franchises, law firms, accountancy, etc.

    It's not unique to the online marketing world.

    What's your take on the term 'Joint Venture' and how do you perceive an affiliate within your online business, let me know below?
     
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  2. Les Blythe

    Les Blythe Well-Known Member

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    Personally, I think the terminology can be muddied either way but my definition would be something along the lines of:
    • A Joint Venture Partner - someone who is actively involved in any or all of the following areas - product planning, product creation, launch planning BEFORE the product is launched and probably contributes directly to the cost of getting the product to market. They would typically share in the risk and share in the potential profits on an ongoing basis (even after the initial launch/ sales funnel has run its course)
    • An affiliate on the other hand comes into play post launch (although they may be contacted pre-launch) and is rewarded for sending converting traffic to the funnel. He is remunerated for sales at various points in the funnel (even to the extent of a recurring income) but has no direct steak financially or otherwise in the intellectual value of the product itself.
    Or something along those lines. Calling someone who mails for you a JV Partner is maybe stretching it a little. As I say though - I guess the waters can be muddied somewhat :)

    That's my take off the top of my head in any case - but interesting question.
     
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  3. William Murray

    William Murray Administrator Staff Member

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    Sure is an interesting questions Les, and you make a valid point with your response buddy.

    However if we look at this in it's simplest form, if I approach an affiliate to promote a digital offer I own and they agree....

    I then have an asset that'll benefit the affiliate and they have an asset that benefits me, at that point I would then consider that affiliate a strategic joint venture partner.

    Purely my opinion though ;)
     
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  4. Les Blythe

    Les Blythe Well-Known Member

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    Hey William,
    Yes, see where you are coming from. As I say, open to interpretation...
    Interesting debate. Doesn't actually matter what you call then as long as they help your business I guess ;)
     
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  5. William Murray

    William Murray Administrator Staff Member

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    Lol good point Les :D
     
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  6. Cheryl Johnson

    Cheryl Johnson VIP Member

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    Personally, I'm completely okay with calling affiliates "JV"s. :)

    The way that I figure it, if you look at any type of product, there are the people who make the product and the people who sell the product. Having one without the other gets you nowhere.

    For example, the smallest team that you can have for a video game company would probably be a group of 3: a programmer, an artist, and a sales/marketing person. Without any one of these the company would fail, and as such, they'd each get a fairly equal share of the company.

    Affiliates are no different. Sure, they haven't worked on the product directly, just as a marketing person in a game company may not work on the creation of the game directly, but in both cases, they have their own work to do. They need to make contacts, put together a list, keep people engaged; it's a different sort of work, but it's definitely still work, and arguably equally as valuable to the end goal: selling the product.

    That being said, affiliates usually get over 50% of the sales money, which I don't think is entirely fair, if they are to be considered as an equal part of the team. However, there are a lot of product creators and not as many good affiliates, so it can't really be helped, I guess. XD
     
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  7. William Murray

    William Murray Administrator Staff Member

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    Exactly Cheryl : )

    50% seems steep to some however I like to think about it as a sale I would never have had if a partner didn't promote and you've acquired a new customer, kind of a win-win scenario :)

    In the low ticket space giving away 100% on the Front End isn't unusual either that's why it's important to know your matrix and conversions so you can gage potential profit from any given product, and what you do on the backend counts to.
     
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  8. Cheryl Johnson

    Cheryl Johnson VIP Member

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    Oh, definitely. 50% seems perfectly reasonable to me. Over 50% is less like being an equal partner, but I suppose that it depends on if you get something else out of it.

    I guess for most people, they can give up over 50%, but get a list of buyers, which is really worth much more to them. That works, too. :D
     
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  9. William Murray

    William Murray Administrator Staff Member

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    All comes down to the potential partner and what kind of traction you'll get :)
     
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