Large manufacturers may be selling more products through direct-to-consumer channels these days. But they still achieve most of their revenue by selling through indirect channels, such as local partners. These large businesses often don’t know who the end customer is. The local businesses own the first-party data. But should they share this information in a “collaborative marketing” arrangement? The CMO Council addresses this topic in a new white paper titled “Exponential Power of Collaborative Marketing.”
Digital Advertising and the Importance of First-Party Data
When local business partners share customer data with their CPG suppliers, especially regarding consumer digital behavior, the CPG companies can figure out how to improve the results of their digital ad spending. According to CMO Council analysts, “[s]tudies show companies focusing on data-driven marketing are up to six times more profitable year-over-year.”
2021 may prove to be the year that the pivot to using first-party data becomes critical. We all know consumers are spending more time online since the pandemic started. They’ll notice your clients' messaging when they are updating their social status or checking the local news headlines. Before long, the well-established cookie-tracking model will disintegrate and make it harder for marketers to connect with consumers who aren’t already customers.
How to Get the Most Out of Co-op Advertising
While national companies will benefit from knowing more about their end customers, local businesses should be asking what’s in it for them when it comes to collaborative marketing. Your local clients lack resources on a number of levels, especially budgetary. In exchange for sharing customer information, they should be able to negotiate solid co-op ad funding to pay for a good portion of the local campaigns they run.
They should also expect to secure partner-produced ad materials ranging from online video clips to print ad slicks. And if the CPG partner hasn’t updated their co-op plan to account for the way consumers prefer to engage, it’s time for local business partners to suggest a change. In his AdAge article, Todd Glavinskas reports that “customer engagement with mobile advertisers increased 15% in the U.S. when stay-at-home orders were in place.” Reimbursing local business partners for their expenses incurred when promoting national brands in a local mobile campaign is a wise business decision. Allowing the local businesses to “tailor for local preferences through imagery and messaging” results in ads that connect with consumers, ultimately driving revenues for the national and local partners.
Collaborative Marketing Pays
With local ad spending poised to amount to $74 billion in 2021, collaborative marketing efforts can pay off. Local businesses may face challenges capturing the kind of customer data that will make a difference in the long term. When their national suppliers commit the necessary resources to help them set up a system.
As a media seller, you can help to facilitate this process. Encourage your local clients to reach out to their suppliers. Set up a system that measures a before-and-after ROI on ad spending to prove the value of the media you’re selling and the power of collaborative marketing. And don’t forget to check out the comprehensive co-op advertising intelligence database available in AdMall by SalesFuel.
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