Notes from Jeff York

Small business marketing thoughts from a marketing small business owner

Cooperative Advertising

with one comment

stack-o-moneyFor many small business owners, the idea of coop advertising is foreign. Typically, it’s only something available to franchisees and those whom sell product from vendors. However, if you’ve been a long time reader of this blog, you know that as a small business owner, now is as important as ever to continue (or start) to advertise. The idea of generating a coop for advertising might be a great way for you to explore expanding your advertising opportunities.

If you’re not familiar with coop advertising, here’s how it works. I’ll explain both franchisee and vendor based coop.

Franchise owners typically have to pay to their corporation a percentage of sales. Part of that fee gets put into a pool to be used for advertising. The brand-holding corporation then can leverage the strength of those dollars to execute national campaigns, regional/localized campaigns, and secure best pricing from the media.

Vendor based coop works a little differently. A local retailer agrees to mention their vendor for a minimum of a certain percentage of the advertising message. In exchange, the vendor agrees to pay a certain percentage of the advertising costs. This helps the local business owner to defray the cost of advertising and/or do more advertising since they have more dollars to work with than their budget allocation. These additional dollars also help the business owner to use the strength of their buy to obtain best pricing from the media which can be used to maximize the campaign.

See the similarity here? In both scenarios, the business owner has the advantage of additional dollars that they didn’t have to generate themselves which puts them at the advantage when negotiating both pricing and overall campaign with the media.

Many business owners don’t know they have coop dollars available from their vendors. If you have that type of business, it’s certainly in your best interest to explore that today. Call your vendors and ask if they have any coop programs that you can participate in. Don’t think of it as asking them for money. Far from it, they want you to participate. If you sell more of their product, everyone wins.

Without metrics to back me up, I’m willing to bet that the majority of people that read this blog are not in either type of situation. Therefore, you may be asking yourself, how can I leverage the strength of coop to help my business?

Here’s where you might have to get creative. Think about your particular business. Are there similar businesses that perhaps don’t serve your region? You can advertise your goods/services regionally (instead of locally) and tag the spots with several business all participating in your coop. Maybe your business is located in a plaza or other business area. Pooling advertising together to generate foot traffic to your location helps everyone.

Not owning a franchise or having vendor based programs doesn’t mean that you can’t use the power of cooperative advertising to your benefit. You may have to get creative in how you choose partners and develop formal advertising agreements with other companies. If you’re not sure how to get started, ask your business contacts that have experience with one of these scenarios or contact a marketing company. They will be able to give you real-world expertise as to what to expect and how to execute.

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One Response

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  1. I was on Yahoo and found your blog. Read a few of your other posts. Good work. I am looking forward to reading more from you in the future.

    Tom Stanley

    Tom Stanley

    February 8, 2009 at 6:45 pm


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