Here’s Why Billions of Co-Op Ad Dollars Go Unused Each Year
August 18, 2015 | Contributed by: Neg Norton
Co-op advertising is an agreement between a manufacturer and a retailer to share advertising costs, while creating brand name awareness. According to a new study by Borrell Associates (sponsored by Netsertive), co-op advertising programs in North America will total $36 billion this year and around $14 billion of that will be left unused.
Which brings us to the question of “why.” If the funds are available, why aren’t they being used? According to the Borrell study which surveyed local advertisers, the lack of participation is due to the hassle of utilizing these funds.
As the chart above outlines, the top pain points in the co-op advertising world include too many rules, too much paperwork, lacking program knowledge, poor communication, etc. The issues raised by these local advertisers align with our experience in the co-op space, but from what we have seen, there appears to be a misalignment with the perception and reality around the co-op advertising workflow.
As you can see, it isn’t as simple as brands giving local retailers money in exchange for promoting their products. When you add distributors, marketing services providers, ad agencies and firms to the equation, the process gets a bit convoluted.
For that reason, we saw a place for the Local Search Association (LSA) to help make the usage of co-op funds simple and easy and have been doing so for over 30 years. Our solutions and services are geared towards helping marketing service providers and agency sales people take advantage of these funds and from our experience, advertiser accounts utilizing co-op advertising have significantly higher revenues than those that don’t.
Our web-based tools allow us to search and identify co-op opportunities for local advertisers spanning digital and traditional media. We help our members by providing leads to sales reps, obtaining ad approvals from manufacturers and improving the overall flow of co-op operations. The solutions we offer include: