Co-branding: What it is and why your brand should use it

Co-branding is a marketing strategy for businesses to work together and reach a wider audience with new products. According to one survey, 71% (nearly three-quarters of consumers) enjoy co-branding partnerships and the new product options they bring about.

Throughout this article, we’ll talk more about what co-branding is, the benefits of the strategy and introduce some popular examples of co-branding done right.

Table of contents:

• What is co-branding?
• Benefits of co-branding
• Examples of co-branding

What is co-branding?

Co-branding is a marketing strategy where two brands collaborate together with the end goal typically being a new, collaborative product. We’ll cover more examples shortly, but one well-known co-branding partnership involves McDonald’s and their McFlurry options.

McDonald’s has two popular co-branded McFlurry’s: Oreo and M&Ms.

This is an example where two brands (McDonald’s and Oreo or McDonald’s and M&M) have partnered together to create a new product offering for their mutual customers.

Co-branding vs. co-marketing

We’ve talked about co-marketing on the Sprout Social blog before—but it’s key to know that while these two keywords sound very similar, they’re two different strategies.

As we mentioned, co-branding is a strategy where two brands work together to create a new product with both brand names attached to it.

On the other end of the spectrum, co-marketing is a strategy where two brands work together on a one-off marketing campaign or promotion.

One example of this is Pottery Barn and Sherwin Williams. These two complementary brands have created marketing promotions that enable them to help customers find both the right furniture and the right paint colors for their homes.

Benefits of co-branding

Thinking of investing in co-branding? There are a number of benefits and advantages this type of marketing strategy can have for your business.

Exposes your brand to new audiences

Co-branding allows you to reach an even wider audience by partnering with a brand of equal or greater caliber than your own. This exciting perk makes it much easier to market co-branded products.

Improves brand credibility and reputation

When you partner with a credible brand, it inevitably increases your own brand’s credibility. Improve your brand’s reputation by working with well-known brands that have positive brand sentiment. At the same time, be cautious about working with brands that may have a negative sentiment.

Generates more sales

Co-branded products can increase sales for your business. According to data from the same survey we mentioned earlier, 43% of consumers say they’d try a co-branded product from a brand they already like—and with two audiences, that’s double the interest.

Saves costs on marketing

When you and another brand are partnering on the promotion of a new product, it usually requires less out-of-pocket marketing costs. Save on ad campaigns, branded assets and more— since you and the other brand will be splitting the costs.

Co-branding examples

There are so many co-branding examples right under your nose that you might not even have realized. Let’s walk through a few popular examples of co-branded products so you can get an idea of which co-branding strategy might work best for your brand (and its lucky future partner).

Nike and PlayStation

This Nike and PlayStation co-branding partnership is a relatively new one. You’ve likely heard of the popularity surrounding the recently-released PS5. Everyone has been trying to get their hands on one of these new gaming systems for the 2020 holiday season—and over two years later, they’re still difficult to find.

To capitalize on the hype, PlayStation partnered with Nike to create a special pair of branded PS5 signature Paul George sneakers.

These sneakers were released in mid-2021, just seven months after the release of the Playstation 5. This was perfect timing, helping to increase interest in this co-branded product in anyone interested in the PlayStation 5.

Coca-Cola and Lip Smackers

Lip Smackers—a brand originally known as Bonne Bell—kicked off its co-branding partnerships in 1975 when it partnered with Dr. Pepper to create its first soda-flavored lip balm.

However, one of their longest-lasting co-branding partnerships—that still exists to this day—is with Coca-Cola. In fact, Lip Smackers now has an entire line of Coca-Cola-flavored lip balms sold in a single collection. This includes flavors like Coca-Cola, Cherry or Vanilla Coke, Sprite, Root Beer and Fanta.

This co-branding partnership has been a Millennial favorite since the ’90s and doesn’t look to be letting up any time soon. Some brands last through the test of time—try to see if you can partner with one that seems to be just as lastingly popular.

Hershey’s and Betty Crocker

We already mentioned that ingredient co-branding types are popular—here’s another one in a similar vein. Betty Crocker is a brand famous for its cake mixes, frostings and other types of desserts that are ready to be made at home. The brand partnered with Hershey’s to create cookie mixes, cupcake mixes and cans of frosting based on various Hershey’s desserts.

As we can see below, some of the favorites included Reese’s, Hershey’s Cookies ‘n’ Creme, Hershey’s Chocolate Chunk and Almond Joy.

Because both brands specialize in sweets and desserts, a co-branding partnership like this makes perfect sense. When you consider which brands you might want to partner with, make sure it’s one with a complementary or similar product—though not a direct competitor.

For example, you’d never see a co-branding partnership between Hershey’s and Nestle because they essentially sell the same product. That type of collaboration wouldn’t make sense. But Hershey’s and Betty Crocker create a beautiful conglomeration of two different worlds of desserts—cookies/cake and candy.

Clorox and Proctor & Gamble

This is a bit of a loaded example simply due to the sheer number of brands under both the Clorox name and the Proctor & Gamble name. However, there are a couple of well-known co-branded products thanks to this partnership.

Clorox houses brands like Glad (think garbage bags) and Fresh Step (think cat litter) while one popular Proctor & Gamble (P&G) brand is Febreze. Febreze, an air freshener, has partnered with both Glad trash bags and Fresh Step cat litter to help block odors from both.

This is a smart partnership because Glad and Fresh Step both work in a smelly business—garbage and pet waste. But with the help of Febreze’s odor-masking capabilities, the two brands are able to offer a particularly enticing unique selling point (USP).

Consider your product’s use cases. Is there another brand that might help make your product even more enticing? You can still sell your standalone product—but then you can sell a co-branded product at a premium price point, making the partnership beneficial to both you and the involved brand(s).

Create your own co-branding strategy

Consider reaching out to other brands to brainstorm your own co-branding partnership ideas. Put together a list of brands that it might make sense to partner with and connect with their marketing teams.

Looking for more ideas to take your marketing to the next level? Check out our list of marketing campaign ideas that will boost your brand engagement.