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
Action Steps
The best contacts and resources to help you get it done
Find co-op programs
Typically, 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.
I recommend: To find manufacturer co-op programs, check the YPA Co-op Advertising Handbook from the
Yellow Pages Association or the
Co-op Advertising Sourcebook from the National Register Publishing. Before approaching a manufacturer, learn the ABCs of co-op advertising at
NFIB.com.
Set the terms
How 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.
I recommend: Near the end of this primer on co-op advertising from the
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.
I recommend: As an example, review the co-op advertising policy of
Simon & Schuster Inc., including acceptable proof of performance for ads in different media.
Measure your ROI
Track 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.
I recommend: Use the
advertising breakeven calculator at MarketingforSuccess.com to measure your co-op ad campaign's success. The SBA's
Primer on Advertising includes a short section on ad tracking.
Tips & Tactics
Helpful advice for making the most of this Guide
- 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.
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