SMBs Need Marketers & Media to Make Co-op Advertising Effective
June 14, 2017 | Contributed by: Tim Brennan
Estimates show that about $35 billion of nearly $70 billion in co-op advertising dollars go unused each year. The biggest challenge is that many local media and marketing sellers don’t understand co-op or how to sell it.
There is a perception that there’s much less co-op advertising money available these days than in the past, but those saying that aren’t the manufacturers offering the funding. Generally, this notion comes from media sales folk who aren’t seeing as much, retailers who aren’t buying as much, or media sales managers who aren’t devoting many resources toward co-op.
The reality is that brand manufacturers continue to pump funding into these programs to drive local promotion and build store-level sales. The only reasons for less co-op money spent by brand dealers in the market are:
- Less purchase volume at the local dealer level resulting in less accrued co-op funds
- Possible turn-key offers from the brand for regional marketing
- Lack of support from the media level in assisting the local dealer with the co-op process
As an example, the average auto dealer moving roughly 800 vehicles per year will have approximately $150,000 in co-op support from the manufacturer just for that new vehicle allotment (does not include Certified Pre-Owned or parts/services allocations). With that level of funding the dealer has many options in what and where to advertise and usually will have someone on staff to manage the workflow of approving co-op ads and submitting claims for reimbursements.
Many other businesses however have no such person to handle the co-op details and will often have their co-op monies expire simply because they have little bandwidth to deal with it. This is where the media and marketing companies can help.
Media companies have the opportunity with many local businesses to support, facilitate and fulfill co-op campaigns in order to earn the dealer business and expand their advertising opportunities. Best practices with this are to have a designated sales assistant exploring brand programs for the sales team, providing ready-made materials for dealer presentation, and managing the details involved.
Without that support, individual sales reps can try to assist local dealers where they can in just providing whatever co-op plan detail they have available and ask what help the dealer might need in making it happen. Generally, co-op plan detail will include the appropriate manufacturer contact information for any specific details. The dealer will simply need assistance obtaining the creative approval of ads and the invoice/proof-of-performance requirement for claim submission.
There are always plenty of brand advertising opportunities with co-op advertising and no end to the amount of leads that can be developed by time frame, territory, category, etc. Every dealer of brand name goods is a target for co-op sales…simply find out what you can and offer to help.
LSA can make co-op advertising a simple, revenue-driving strategy for your local media and marketing company. Click here to learn more.