SALESFUEL TODAY

How to Help Clients Access More Co-op and MDF Funds

by | 2 minute read

Last year, about half of businesses used co-op or market development funds provided by their manufacturing partners. BrandMuscle’s 2018 State of Local Marketing report explains what else small businesses need in terms of marketing support from their brand partners. Here’s how you can help them get what they need.

We all know vendors can be slow to change their ways when it comes to supporting their local business partners. Now in its fourth year, BrandMuscle’s report shows not a lot has changed since 2016. The company’s analysts engaged with over 2,700 survey respondents as they studied the local advertising ecosystem and traced the path of co-op and MDF funds. What they found is that local businesses continue to rely on vendor funds, but they’d like to see their partners expand the number of formats they’ll help to pay for.

Finding Co-op Funds

One of the disconnects your clients have with their brand partners is they don’t know when co-op money is available. About 49% of local businesses learn about these programs by checking out their partners’ marketing platforms. You can help your clients with this process by identifying new sources of money with the Co-op Funding Reports for Local Advertising in AdMall from SalesFuel.

Using Co-op Funds

Overall, 53% of local businesses use co-op or MDF funds to pay for advertising. At least 86% of the businesses call this support critical. This year, over half of SMBs will boost their digital ad spending. About 17% say the same for their traditional ad spending. They’ll be looking for support from their partners in both the traditional and digital ad categories.

As your clients seek the biggest return on their investment, you may want to share some BrandMuscle stats with them. In the past year, SMBs reported the largest net score increase (+20%) from some specific advertising formats:

  • LinkedIn
  • Pinterest
  • Phone Book
  • Promotional Signage

Unfortunately, most vendors are not allocating co-op funds for formats like LinkedIn or Pinterest. Instead, vendors seem more comfortable paying for advertising costs associated with formats such as websites, SEO, promotional signage, direct mail and local events.

At this point, about 16% of businesses that use co-op don’t take advantage of all the money they qualify for, because their most successful formats aren’t covered by a brand’s co-op plan. The best way to fix this problem may be to encourage your clients to communicate frequently with their brand partners. They should be demonstrating the success of some of their current ad strategies and asking their partners to help them fund what is working. Brands will eventually get the message and update their plans.

Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-owner of several small businesses in the health care services sector.