Co-Op Advertising

Definition: Advertisements by retailers that include the specific mention of manufacturers, who---in turn---repay the retailers for all or part of the cost of the advertisement

Cooperative advertising is a cost-effective way for manufacturers, retailers or distributors to reach their target markets. Although co-op advertising policies differ from manufacturer to manufacturer, most will pay a portion of the advertising costs and supply the retailer with photos or graphics to use in the ad (or sometimes the entire ad itself), whether for print, radio or television. A manufacturer's contribution to a cooperative advertising campaign can range from a large amount of money to promotional gimmicks and point-of-purchase displays.

Using co-op advertising cuts down not only on your media costs but also on your ad production and creative expenses as well. A smart advertiser will factor co-op advertising, if available, into his or her budget. The major drawback to co-op advertising is that some manufacturers have more restrictive programs than others.

Another form of cooperative advertising is sponsored by shopping districts or centers, which feature an advertisement from each retailer in the shopping center. These promotions are often found in local newspapers for back-to-school specials, St. Valentine's Day, Fourth of July, Mother's Day, Father's Day and so on.

Be careful to coordinate any co-op advertising you do within your overall marketing scheme. Only use co-op advertising if it meets your needs. If you??ve chosen a different approach in your advertising campaign, don??t switch in midstream just to take advantage of free advertising dollars.

Here are some tips to help you get the most out of co-op advertising:

  • Keep careful records of how much you've purchased from each supplier.
  • If you try something unusual, such as a sales video or catalog, get prior approval from each vendor before proceeding.
  • If you're preparing your own ads, work with an advertising professional to prepare an ad you think will appeal to the manufacturer. Keep in mind the image the manufacturer presents in its own ads.
  • Make sure your company's name stands out in the ad. Your goal is not so much to sell the supplier's product but to get customers into your store.
  • If a manufacturer has no established co-op program in place, pitch your ad campaign to the vendor anyway.
  • Expect vendors to help out; after all, you're bringing them business. If your vendor doesn't offer co-op advertising money, you should look for another vendor who does.
  • Be sure to follow up. Money goes only to those who submit claims.
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