Business information written specifically for newspaper advertising departments

Tie-ins

Tie-ins are an arrangement between partners to cross-promote products or services that target a common, specific audience.

Tie-in arrangements help to alleviate marketing costs for promotional campaigns, and can also be extremely beneficial to your local advertisers. Providing your clients with this information is a way to strengthen your client relationships and improve your value as a knowledgeable sales rep. Tie-in arrangements involve partnerships, so not only are you offering a valuable business strategy to current clients, you may have the chance to work with new clients. An example of a beneficial tie-in arrangement would be a coffee shop and a bookstore working together to offer a discount on books with the purchase of coffee.

What Are Tie-ins?
Tie-ins are an arrangement between partners to cross-promote products or services that target a common, specific audience. A tie-in arrangement usually involves a smaller business leveraging the brand recognition of a bigger business, though national companies usually tie-in with companies of equal standing.

One thing to note is that there are legal restrictions with tie-in arrangements. In the U.S., there are certain competition laws that play a part in tie-in arrangements (for example, the Sherman Antitrust Act and the Clayton Act). If the tie-in restrains competition and forces consumers to buy inferior or overpriced products or services that they could purchase for less elsewhere, then the arrangement is illegal. The four elements that make the tie-in arrangement illegal include:

1. The arrangement contains two different products.

2. A conditional relationship between the products (purchasing one product requires the purchase of another product).

3. Seller has enough market power to restrict competition.

4. The arrangement restrains commerce.

Why Use Tie-ins?

The main reason to use tie-ins is that they target the audience at the decision-point of purchase — this stage in the consumer buying cycle reflects customers’ decision to purchase a product or service, which is one of the best opportunities to offer specials promoting different or additional products. By cross-promoting products or services at the point-of-purchase level, other products or services gain more visibility and more popularity; therefore, tie-ins are a way to promote products/services that otherwise might not reach the target audience. By piggybacking on other products, the lesser-known ones can spread to new consumers. Tie-ins are cost efficient as well, since cross-promotion, advertising and other costs related to marketing will include a joint budget. All of this is extremely valuable to your clients, and through the partnership aspect of tie-in arrangements, the paper may receive additional advertisements. While one client in the partnership may already be placing his ads in your paper, the other may not. Your positive relationship with your client could potentially nab you a new client.

Types of Tie-ins

There are many different forms of tie-ins; here are some common examples:

• Multi-brand tie-ins: These types of tie-ins involve up to 20 or 30 brands, adding significant value to a single purchase. An example of this is an arrangement between Kraft and the Home Shopping Network, which features “exclusive” recipes involving various Kraft products to promote its new line of Philadelphia Cooking Crème. 

• Brand-to-brand tie-ins:This form of tying in focuses on targeting a specific, joint audience to minimize waste. It involves promoting one brand with another; for example, Dell computers offer Norton AntiVirus products.

• Coupon tie-in programs: These tie-ins usually include organizations or events that cater to a specific target audience, and this can include advertising in specific places or for specific events. For instance, using campus bookstores to reach the college demographic or using gyms to reach a healthy lifestyle demographic.

• Horizontal tie-ins:This arrangement offers consumers a product or service that is attached to the desired product or service, usually from a different company or an unrelated product. This type usually offers a small sample of the tied-in product/service in order to promote it. If Bic places a sample of pens with the purchase of its razors, it is a horizontal tie-in arrangement.

• Vertical tie-ins:Like the previous form of tying in, vertical arrangements sell related products/services together, usually from the same company, for promotional purposes. For instance, shampoo products that contain a sample of face wash from the same company, car dealerships that offer services with the purchase of a vehicle or video game companies that bundle games and consoles.

How to Find Partners for Tie-in Arrangements

Finding a partner is a crucial step in creating a tie-in promotional campaign. It is important that the union is mutually beneficial, and embraces a marketing strategy that embodies the best interests of both businesses. When creating a tie-in arrangement, consider the following:

• Goals

• Conflicts of interest

• Common audience

• Related products/services

• Integration

• Compatible costs

• Common methods of distribution


When suggesting this type of promotion to your clients, you emphasize the importance of choosing a good partnership. Perhaps even consider suggesting partnerships between related clients.

How You Can Use Tie-ins

A tie-in promotion can be tailored to meet the needs of its partners, as long as they comply with the various legal restrictions. Tie-in partnerships can simultaneously benefit both the paper and your clients, and create new revenue. Here are a few ways to use tie-ins at your newspaper.

• Newspaper subscription tie-in:The Burlington Free Press created a promotional strategy that increased new subscribers and renewals. This tie-in strategy functions by offering readers a “Pick a Bonus” special. Subscribers are allowed to pick from a group of local businesses (usually five or six), which offer price discounts or other rewards — it is through this variety that subscribers are more attracted to the promotion. Using this multi-brand tie-in approach, potential subscribers have more choice, and there is more opportunity to appeal to a wide audience. The Free Press offers more rewards for longer subscriptions. They made their target audience aware of this program through in-paper ads, telemarketing and print ads. They chose which local businesses to promote by turning to their largest advertisers, which acts as a reward for their clients at the same time.

• Real estate agents: A tie-in opportunity for real estate agents is cross-promoting moving companies or storage units, since agents are in constant business with people who are moving or might need storage. Realtors® can provide their clients with coupons, informational pamphlets and other promotional material from local moving companies or storage companies. It is important that those companies provide Realtors® compensation for their cooperation, and this can be anything from gift cards/certificates, cash bonuses or any other type of reward. This relationship is mutually beneficial because the local businesses get to tap into their target market while Realtors® provide information and help that their clients need. This is a prime example of partnerships you can suggest to your clients.

• Car dealerships: Those in the automotive industry have a unique opportunity to implement tie-in promotions. Authorized dealerships have access to co-op advertising — which refers to the partnership between the manufacturer and the local dealership. Manufacturers will share the cost of advertising for local promotions, only if the ads match their requirements. This usually consists of requiring dealerships to include the manufacturer’s logo larger than or equal to the dealership’s logo, feature the brand before the model/make or limit the overall size. Each manufacturer has different requirements and timelines, so it is important for dealerships to get in touch with their manufacturer’s specific co-op program. Co-op programs can reimburse dealerships for much of their advertising, including print, online, e-mail and other in-store promotional materials.