Companies are looking for more cost-effective methods to increase sales in an era where advertising spending is declining. Co-op advertising is a recession-proof option for both retailers and manufacturers. It is also appealing to consumers.
The co-op model is a solution that benefits both retailers and brands. Retailers can reduce their advertising costs by implementing co-op programs. When brands work together on a single plan and strategy to increase sales, the collective power of their brand grows.
Advertising co-op is a win/win situation.
Manufacturers/brands provide advertising dollars to channel partners such as retailers and dealers who sell their products.
Retailers receive money through these programs to reduce advertising costs, engage with customers, and promote brands in demand to drive sales. It’s almost like free money for retailers.
This type of advertising is especially effective for consumer-oriented, durable product categories.
Whatever the industry or vertical–electronics, apparel, building materials, appliances, or automobiles–co-op initiatives strengthen the marketing partnership between manufacturers and retailers. These programs encourage strong and lasting relationships between local retailers and the brands that they carry by distributing the advertising costs.
Retailers can work with their brands to use co-op marketing for events, special promotions, custom-made ad templates, and targeted marketing of consumers who made previous purchases.
This shared marketing support is beneficial to both brands and retailers by reducing the costs of traditional or digital advertisements and reaching customers effectively.
Success is based on mutual benefits and flexibility
While participating in cooperative advertising programs can save retailers money, that doesn’t mean the retailer isn’t concerned with the strategy of the ads. The process is essential to the success of all manufacturers and partners.
Retailers must coordinate with their brands or manufacturers to achieve common goals such as completing the target audience, boosting sales, and ensuring brand loyalty.
Co-op program guidelines often include audit controls and discipline to protect brand identity.
The channel partners can also be influenced by a continuous and comprehensive review of their ads and activities.
Even though co-op program guidelines are often set by the manufacturer who provides the funding, flexibility is still important in order to accommodate new products, services, or features.
Sales are driven by collective innovation and power
Co-op marketing is a powerful tool when it comes to collectively innovating a strategy.
In the electric vehicle space, OEMs can demonstrate their collaborative leadership by offering co-op programs that educate consumers on EVs. Content can be informative on a variety of topics, such as the charging process, the range per charge, and the financial viability of purchasing an electric vehicle.
Ford, Tesla, and other EV carmakers announced price reductions to lure customers as the supply of battery-powered models starts to exceed demand.
Manufacturers can use local dealer co-op marketing tactics to direct consumers to the final purchase when they create a united strategy.
Local brands can create co-op campaigns for certain chain stores or independent retail outlets, enabling focused advertising to resonate with multiple demographics within a particular region.
How to best use co-op programs by brands
Retailers can reach new potential customers by reaching out to loyal customers in new ways.
This is how co-op marketing becomes multilocational and hyperlocalized. Brands can distribute advertising dollars across a variety of demographics. This creates a melting pot of localities that benefits both the brand and the retailer.
Brands looking to understand co-op better can benefit from these tips:
- Partner with an expert in digital marketing who can help you develop your brand’s online processes. Partnering with a marketing channel expert can help you submit digital content from your brand for approval before the campaign runs and keep you on schedule for deadlines. This can be beneficial to the brand when permissions are required quickly.
- A marketing expert, for instance, can offer quick compliance suggestions in the OEM space when content changes are needed to meet OEM requirements. Some marketing experts offer an extra layer of support by providing a concierge-style number.
- Once you have partnered with an expert in marketing, become familiar with the offerings of co-op programs. Retailers have separate co-op sites or integrate key co-op programs into their marketing portals. Contact your retailer to learn about all the new programs available.
- Keep in touch with your sales representative and field marketing support representative. Many retailers hold regional web-based webinars about upcoming specials.