Brands Update Co-op Ad Programs to Encourage Digital Media Use

Other than online display advertising and paid search, local marketers are largely still focusing co-op efforts on legacy media. A recent LSA survey of local marketers found that five of the top six most commonly used channels used for co-op represent legacy media: newspapers (1), yellow pages (3), out-of-home/billboards (4), radio (5) and direct mail (6).

However, increasingly, brands are updating co-op program rules to encourage use of digital media. LSA’s co-op database shows hundreds of brand co-op programs have added funds for digital. Some brands are being more aggressive in this than others.

One major auto manufacturer’s co-op program, for example, now requires 50% of co-op funds be spent on digital. On the other hand, with digital comes more program complexity. Each medium has its own creative, fulfillment, proof of delivery and performance challenges that have to be understood and navigated.

This complexity is slowing adoption of digital in co-op programs. As a result, selling co-op, fulfilling and managing the process requires dedicated resources or a third-party partner that can provide the required support to access funds and fulfill all the involved requirements.

Along those lines, banner advertising, email marketing, and other digital display have been the first out of the gate in digital co-op priority. While SMBs need to make it a point to aware of the manufacturer co-op provisions related to digital, local marketers have an opportunity to help in this process.

Regardless of the digital co-op strategy, there are three key factors to consider with digital co-op:

  1. Brand Compliance: All brands will have specific requirements related to the appearance of the brand logo, the advertised product, ad copy, and occasionally a minimum advertised pricing component. Within the limited space available for online display, these factors become more complex. Most major brands will have an advertising standards document which should detail the necessary components in dealer promotion. Regardless, in all cases, digital ad creative should be pre-approved with the manufacturer to ensure co-op compliance.
  2. URL Linkage: Many brands will have specific requirements on where any digital display ads should link. Some brands are fine with the simple link to the dealer site, but many are moving to more specific locales with a branded dealer page and relevant inventory. Some manufacturers will provide their channel partners with landing pages within the brand website for such purposes while others may require separate landing pages, designated brand pages within the dealer site, or linkage to the brand website. Always consult the program guidelines for detail and direct any questions to the manufacturer co-op contact.
  3. Proof of Performance: The minimum requirement for a co-op submission on digital programs will be a media invoice for activity and visual documentation for each invoice line item charged back to the program. With banner, email, and any online display advertising this will include screenshots of all placed creative including the URL string and date stamp along with verification reporting on the number of delivered impressions. Search related documentation would include all purchased search terms along with documentation on delivered impressions. All specific documentation requirements should be reviewed with the co-op contact during the pre-approval process.

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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