Business owners really should always be thinking of ways to “tighten our belts” right? However, during times of economic downturn there’s a ton of focus on ways to save on expenses in our businesses and as you may know, many businesses are going into a “panic mode”. They’re laying off staff and delaying plans for growth and reducing their budgets…..including their marketing budget. Companies who reduce their marketing budgets give me “pause”, especially since marketing done properly is the best investment a company can make when the economy is slow and some vendors have an “Economic Stimulus Package” already in place to help their dealer network. The name of this Economic Stimulus Package is Cooperative Advertising, otherwise known as Co-Op.
Every year, over 10 billion dollars of Co-Op advertising money goes unused!
Chances are likely if you are reading my blog, you are BUYING, SERVING or SELLING advertising (or just someone who ran into my blog because they like cats.) No matter who you are, what you don’t know about Cooperative Advertising could cost you money.
Cooperative Advertising, or “Co-Op”, is a sharing of advertising costs where a vendor shares all or a portion of a retailer’s advertising in order to promote product. Think of Co-op like a partnership between a vendor and their dealer network (retailers). Vendors want their dealers to spend money on marketing because they know it works…AND are willing to put their money where their mouth is. Now may be the best time to check with Vendors on programs that may be available!
It’s not a surprise to know that some of the most aggressive Cooperative Advertising Programs are run by brands, such as: Polaris, Apple, Rolex, Carrhardt, NAPA, AAA, Ace Hardware, and every car brand out there, Thomas Kincade, Pennzoil, Bosch, and many more! Vendors are also getting more and more comfortable across the board with internet advertising.
The Common Benefits of Co-Op Advertising
Many vendors offer free Yellow Page Advertisements.
Co-Op reimbursements are commonly at 50% or above.
Some vendors provide the ad copy, including television ads, webverts, and radio scripts.
Co-op can be handled in-house, but very often it is a place where Industry Professionals really can offer great help and support. Here’s an example of a professional that keeps her ear to the ground for her clients as well as her peers. http://co-opqueen.blogspot.com/
There may be money available to help defray the cost or enhance Trade Shows and Special Sale’s events.
Cooperative Agreements can be negotiable between a vendor and a dealer to create better return on investment.
Now, what could be bad about Co-Op Advertising Programs?
There may be some Co-Op money you choose to leave on the table.
Remember that vendors want to sell their products and some have constructed their advertising programs to sell only their products without regard to an individual company’s identity and brand. This is not too terrible if the Dealer Network has a territory that is spread out and if the Vendor does not sell direct to the public. Be sure that all of your advertising works for you and not against you.
It may be tempting to attempt to combine more than one vendor in a cooperative ad in order to cover more $$. Have you ever heard those radio ads just listing name brands of stock …….really fast? Make sure to use proper advertising methods and don’t create noise. Again, I recommend utilizing a professional copywriter with experience in Co-Op advertising. If the copywriter says it “would be better if….”, LISTEN.
Vendors may request that ads be “approved” before running them in media. This could cause delays in scheduling marketing.
Co-Op funds can expire. It’s common that they don’t carry over. You lose what you don’t use!
Co-op is usually paid upfront by the retailer and reimbursed by the vendor. It is very important to follow the specific rules to avoid losing the ability to collect reimbursement.
Though it may be important to not delay in learning about the Cooperative Advertising money available, it is equally important to NOT RUSH in spending it. Plan Co-op wisely based on budget allowance, marketing plans, stock seasons and market niche. An advertising / marketing calendar is recommended.
Advertising is not a product you attempt to purchase at a discount.
Advertising is an investment in which you attempt to maximize your return.
The GIGO rule applies: “Garbage In=Garbage Out”
I have added a little bit of funny yet excellent advice below. Enjoy!