When two or more companies team up to pay for an advertising campaign, it's called co-op advertising. In most cases, this scenario involves a partnership between a manufacturer, supplier or distributor and a retailer. Usually, it's the manufacturer who either ponies up some cash or offers credits on its merchandise to encourage retailers to promote a particular product in the ad.
On the other end of the deal, retailers sometime must agree to purchase a certain amount of the advertised product to sell. Co-op advertising allows manufacturers to increase sales and brand recognition and to take advantage of more experienced marketers.
If you are a retailer, co-op advertising allows you to:
- Defray some of the cost of ad buys
- Create larger ads
- Advertise in new mediums
- Position your company for other types of partnership marketing efforts
Find co-op programsTypically, it's the manufacturer who has a co-op program in place with set rates and requirements. It's up to you to find these programs and determine which ones make sense for your advertising efforts.
Set the termsHow much will manufacturers pay for a mention in a 30-second radio spot or for front-page positioning on a store circular? Will payment be in the form of cash or future purchase credits? Does the manufacturer demand exclusivity so that no competitor ads can be included? Be sure you know all the terms before agreeing to a co-op program with a manufacturer.
Small Business Administration (SBA), you'll find a sample listing in the YPA Co-op Advertising Handbook with the terms of a typical co-op program. Find more help at Co-opAdvertisingPrograms.com.
Get “proof of performance”Manufacturers will often require "proof of performance," evidence that the ad or ads ran and that you upheld your end of the agreement.
Measure your ROITrack your co-op program like you would any ad spend. Monitor the numbers regularly to determine whether you should continue a particular partnership or perhaps even expand it.
Primer on Advertising includes a short section on ad tracking.
- Once you've established a relationship with a manufacturer, look beyond media buys for opportunities to collaborate.
- Consider doing a sweepstakes in conjunction with a manufacturer or have a manufacturer bundle a sample of its product with a parallel brand.