How Co-Op Funds Can Extend the Scope of Your Advertising
Co–op advertising is most commonly an agreement between a manufacturer and a retailer to share advertising costs. Both parties stand to benefit from a certain product being sold, therefore it’s smart to work together to grow the impact of their advertising on a local level.
Take this as an example. A company that makes tires provides a certain amount of money to a company that sells those same tires so that they can advertise their product, resulting in a win-win for both parties. It makes sense. The tire manufacturer benefits from more of their tires being sold. And who better to push this product than the local businesses who know and interact with the target customer who is making the purchasing decision?
For those local businesses, they benefit from the padding to their advertising budget which helps them spread their messaging much further than if they were solely trying to finance every radio, print, television, or billboard ad being placed. By working together and pooling funds into a cooperative advertising relationship, both the manufacturer and the retailer increase the impact of their ad dollars, and as a result, the volume of business completed.
If you’re a retailer who sells the product of a larger manufacturing business, it’s possible there is a cop-op fund available for you to make use of if you know where to look. Here’s what you need to know about co-op advertising and how to get started.
A co-op advertising relationship increases your overall budget for marketing, branding, and ad placement. The manufacturer of the products you sell may choose to pay a certain percentage into an accrual fund for you, the retail business, to use on advertising the product within your local and regional market. This is additional funding on top of whatever you may already be spending on advertising. And with a bigger budget comes efficiencies to help spread your money further. You can buy greater ad quantities in bulk or sign into longer-term contracts that will reduce the price per unit.
It strengthens brand awareness. Co-op advertising is smart because it’s good for both the manufacturer and the retailer. Both want to sell the same product, and by combining forces, they can do it together more efficiently. Back to that tire company example, the tire manufacturer doesn’t care where a customer buys the tires, they just want to be sure they don’t buy a competing product. And to the local retailer selling those tires, they want to be sure that when a customer decides to buy new tires, they have one brand that’s top of mind and know who the local retailer is who sells them. Co-op advertising helps reinforce this relationship.
Finally, you control how the funding is used. Once you understand your company’s co-op guidelines, it’s up to your discretion on when and where you’d like to place the ads. This allows you to apply the knowledge of your local market, negotiate deals with your local media buyers, and pick the right placement at the right time to ensure your message is well received and draws customers to take action. Through the shared funding of co-op advertising, manufacturers and retailers can work together to create a powerful and consistent message that is well-tailored to reaching the intended target audience!
For a 60 second recap of the points covered above, click on Mid-Atlantic Media Hub’s Media Minute below!
If there is more you want to know about utilizing co-op advertising for your business, we are here to help. Reach out to us today so we can lend our expertise and point you in the right direction for more information.