Notes from Jeff York

Small business marketing thoughts from a marketing small business owner

Posts Tagged ‘media buying

Cooperative Advertising

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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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Advertising Media – Part 1: Broadcast Television

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I have developed content for many different advertising media as well as purchased different types of mediums. When I work with a client to help them to develop a marketing strategy, part of the conversation has to focus on the medium(s) through which the message will be delivered. I thought it would be instructional and beneficial to talk about the different types of advertising mediums that are available today. This will be a relatively superficial guide for novices just started to wrap their heads around mass media advertising and I hope that you will contact me for a more in-depth conversation as to what is right for you.

I will start with the medium that I know the best and have spent the most time with: broadcast television.

The concept of television was first kicked around near the start of the 20th century with ideas and concepts turned into experiments in the 1920’s. To me, broadcast television as an advertising medium was born when the first two commercial television stations were granted licenses on July 1, 1941 and continues in the numerous television stations that cover the nation, some affiliated with broadcast networks and others running programming as independents.

Independent television stations air shows without the benefit of programming provided by a network. This makes their audience-building task more difficult and often they make the decision based on a desire not to pay the networks their reverse compensation fees any longer and instead hope that the brand they have already built will carry an audience.

In a strictly bang-for-buck, I think that television provides the best vehicle for advertisers…especially broadcast television. You have access to two of the viewer’s senses to get your point across. The audiences are still the largest of the mediums. Broadcast television still provides watercooler conversations around the office. Over the past several decades, television has taken a hit in audience size as people have turned to other activities during hours that would normally be considered prime time, but even still, the place where you can find the largest heterogeneous audiences.

Cable television entered the scene in the late 1940’s as a way to get broadcast signals to the rural farms in Pennsylvania, but quickly people realized its potential to narrowcast special interest programming to an interested audience. Today, there is an average of 102 cable networks offered to each American household (from Spots ‘N’ Dots, 9/26/03) fragmenting the audience. Purchasing a cable network means either a national buy (very expensive and unnessessary for most business owners) or purchasing spots through a local cable outlet. Typically these spots only reach a small geographic area unless you pay extra for mutliple “systems”. If you wish to have the same reach as a local broadcast station buy purchasing cable, you will have to invest with a large number of cable companies while dealing with a host of ad sales reps. This is a real nightmare to say the least.

Comparing audiences, the hotest shows on cable have audiences that would be considered complete failures in broadcast. I remember a time around 2002 or 2003 when cable was first able to say that they were on a par with brodcast. What this really meant was that with their over 100 channels, they were able to aggregate the same audience that broadcast had. But keep in mind, at the time, there were only 7 commercial broadcast networks (NBC, CBS, ABC, FOX, WB, UPN, PAX). Today, we have one fewer broadcast network with The WB and UPN merging to form The CW.

So that’s television in a very small nutshell. Obviously, there are tricks to buying TV and placement issues that you can talk over with your sales reps. There are tremendous metrics in place to help you with finding the right demographics and shows for your advertising. Or, of course, you can give me a call and take advantage of my years of experience in media buying.

Most of all, good luck with your media buying. Mass media remains the single strongest way of growing a business. Until someone finds a way to easily purchase word-of-mouth advertising, television will remain the best value for advertising dollars for at least the next few years.