Chapter 13 – Strategic Alliances

Simon Property Group is in a unique position in that it owns retail real estate, which is the hunting ground for advertising companies across the globe. Simon has several strategic alliances that are beneficial (and successful) to both them and their alliance partners.

One of their alliances is with EYE Mall Media. Simon entered into this alliance with EYE in 2010 , which provided EYE with exclusive advertising rights in Simon Mall’s. This is a huge benefit to EYE as they don’t have to compete with other companies for space and can receive the revenue from mall retail tenants (or non-mall tenants) that wish to advertise on digital signs to help drive traffic to their stores. In return, Simon is pleasing their tenants and providing them access to assistant in increasing sales at an affordable price (since they don’t have to go and take out an ad on a billboard that will broadcast to people not even shopping at the mall). Simon also receives advertising revenue from EYE from the exclusive deal so it is a win-win for both parties.

Another alliance Simon has is with The Coca Cola Company. In 2003 Simon Property Group entered into an exclusive agreement for Coca Cola to put their vending machines throughout Simon mall’s. The agreement also states that Coca Cola will do a large advertising campaign in the Simon Malls and has promotion opportunities, which is a huge benefit to a company like Coca Cola. The return benefit to Simon is they will have discounted (if not free) vending machines and guaranteed advertising revenue for its alliance with EYE Mall Media. The vending machines are a large cost but a necessity for customer satisfaction and the guaranteed advertising revenue benefits another one of its alliance. These are the types of alliances that are good and successful and stand the test of time.