Answers to 5 Co-op Advertising Concerns for Local Marketers

With over $70 billion available co-op advertising funds, one might assume the funds are helping local retailers push more advertising resulting in more awareness, traffic and ultimately, sales. But roughly $35 billion in co-op goes unused each year and local marketers face a number of obstacles in trying to help clients utilize the funds.

Co-op advertising refers to an agreement between a manufacturer and a retailer to share advertising costs in order to create brand name awareness with local consumers.

From the perspective of local marketers and local media sellers who are trying to use the funds on behalf of local business clients, a 2017 LSA survey found that 42% said “showing a client the specific co-op opportunity for them” was the biggest obstacle to co-op. This involves being able to access and determine the accrued amount of co-op money available to a specific local business, which requires permission from that local business.

Next on the list of challenges was “handling the paperwork” (36%), while 31% said they needed help working with the brand. Accordingly, there are multiple moving parts and touch-points in the system, which is where knowledgeable third parties can help save time, money and overcome bottlenecks and friction.

However more fundamental still, is getting to better understand the ins and outs of co-op advertising. Once local marketers have familiarized themselves with the basics, inevitably more questions will follow. Here’s some of those questions with answers:

  1. Is it too much of a hassle to collect money from the distributor? The advertiser merely has to provide the appropriate information to the local media sales rep. The rep will handle the paperwork or will pass it on to a co-op enablement partner to obtain prior approval.
  1. Why can’t local advertisers just claim the co-op dollars in direct funding from the brand? Brands set the rules of co-op ad programs. Since they want to increase local awareness of their products and the locations they are sold, they often require co-op advertising funds are utilized towards actual ad products and placements.
  1. How do local marketers ensure that they do not have a bad experience with co-op advertising funds? Educate yourself on co-op. Learn what it is, how it works, who can help capitalize on these funds, etc. The sellers that are having the best experiences with co-op are the ones who use it as a money making tool instead of a crutch.
  1. Is all that co-op paperwork worth my time? The short answer is, yes. Resourced properly, co-op can be a meaningful revenue driver for media sellers. Broadly speaking, most local marketers and local media sellers agree, saying co-op is worth the time and effort. Only 6% said that it wasn’t according to LSA’s survey.
  1. How do I avoid the “war stories” I’ve heard about with co-op? Outliers exist for every product or service, no matter how good it may be. But with co-op, most problems stem from a lack of understanding of the co-op basics. This is easily remedied by taking advantage of the expertise and educational resources available when working with a co-op service provider like LSA.

For more information and guidance as it relates to co-op advertising, download this free LSA report, “Tapping the Multi-Billion Dollar Co-op Advertising Opportunity.” If you’d like to learn more about how LSA can help you get started with co-op, click here.

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