Are your accounts using co-​op advertising to fund their campaigns? If not, they should be. One way to sell more media space is to help your accounts tap into ad programs provided by their vendors. These funds are commonly called co-​op advertising funds or market development plans.

What is Co-​op Advertising?

Manufacturers of big-​ticket items like vehicles and appliances allocate funds to branding campaigns. These campaigns typically run on national media formats such as live sporting events on TV.

Brand awareness can build consumer trust, but it doesn’t always drive sales. Consumers may need an additional nudge to purchase a new product. When they see local ad campaigns for these products, they’re more likely to make a purchase.

Manufacturers that offer advertising support to their local dealers can help boost sales.

Co-​op advertising funds come in multiple forms. As a media seller, you should learn about co-​op. At AdMall, media sellers will find co-​op advertising information on over 10,000 brands. In addition, you'll receive training on how to approach your prospects with limited time offers designed to boost revenue. When they use co-​op advertising funds, they can expand their campaigns and reduce their costs. 

In other cases, local dealers are tapping into vendors funds to advertise a new product or celebrate a special event. With access to the co-​op advertising database in AdMall, one media sales rep helped a local farm equipment business grow sales. And another rep used the database to assist a powersports retailer that needed to advertise a new model.

Formal Plans

When this advertising support comes in the form of co-​op advertising plans, some rules may apply. The vendors often develop a formal written plan and promise to reimburse dealers for a set percentage of the advertising costs up to a specified limit. They may also outline the media formats they’ll approve of. And they may demand the right to approve the ad content before it runs. The reimbursement forms may be in the form of discounted products or a cash disbursement to the dealer.

To qualify for co-​op advertising funds, dealers usually accrue them based on a percentage of the sales they’ve achieved for the vendor’s brands.

Digital advertising

As the digital advertising economy has grown more complex, vendors have approved the use of co-​op funds for these media formats. But they’ve also sought more control over how the money is spent. Large manufacturers, especially in the automotive sector, now have agreements in place with approved partners.

If a local dealer wants co-​op reimbursement for a digital ad campaign or a website upgrade, they will need to work with one of the approved partners.

Negotiable Plans

In a negotiable co-​op advertising plan, vendors may allocate funds to their distributors and allow them to manage the advertising requirements. In other cases, they will award advertising funds to dealers who formally pitch them with an idea and a proposal.

Co-​op Plan Management Expense

These plans can be expensive to administer. Often a third-​party, such as an ad agency, may process the claims made by dealers. And they may set the guidelines regarding approved advertising.

Brands have been shifting away from formal co-​op advertising plans in some cases. Funds are still available to local dealers. But the vendor may be using different terminology and guidelines. Here are a few examples.

Marketing allowance programs

Some manufacturers, especially in the automotive industry, have moved to a marketing allowance program. In these cases, the dealer signs an agreement to obtain access to ad funds. They must advertise only in approved media formats and obtain approval before running the ads. They can then access accrued funds as they sell vehicles.

Business development funds

Some vendors choose to reward their partners with a business development fund. Local retailers may qualify for an entry level reward of 1% of revenue on the previous year. In addition, the more they sell, the higher their business development fund award. In this way, the vendor rewards productive partners with more advertising funds.

Market development funds

Market development funds can be established as a way to help new dealers begin advertising a vendor’s products.  They may be offered for a limited period of time if a vendor wants to give dealers an incentive to promote a new product locally.

Summary

Ad budgets may be tight this year. Media sales reps can open conversations with a discussion about co-​op advertising funds and let dealesr know financial assistance is available.