Automotive co-op advertising is a cost-effective way for auto manufacturers to reach customers and build brand awareness through local car dealers.
With approximately 14 international corporations producing over 60 major automobile brands around the world, car manufacturers rely on advertising to reach customers and build brand awareness. That is why the competitive automobile industry has one of the most vigorous cooperative advertising ecosystems of any industry.
What Is Automotive Co-Op Advertising?
Automotive co-op advertising is a cost-effective reimbursement system that auto manufacturers use to advertise through local car dealers.
As the word ‘cooperative’ in the name suggests, automotive co-op advertising is a partnership between car makers and the local dealerships who sell their brands, where both parties share the cost of local advertising to minimize marketing expenses and increase ROI. Dealers can use manufacturers’ pre-approved assets, images, copy, and designs and get reimbursed for all or some portion of other advertising expenses. From the perspective of an automobile company, co-op advertising is a way to take their national brands to local markets by incentivizing local advertising. To dealers, co-op advertising is a way to drive customers to neighborhood dealerships while paying less for advertising. From both perspectives, it’s win-win.
The Benefits of Automotive Co-Op Advertising
The benefits of automotive co-op advertising include:
- Lower local advertising costs
- Brand-compliance and legal-compliance
- Increased hyper-local brand awareness
- Greater visibility into local campaign performance analytics
- Revenue growth for both the local dealer and auto manufacturer
How Co-Op Programs Work for Automotive Companies and Dealers
Co-op programs work by:
- Sharing corporate-approved marketing assets, logos, messaging, and photos to local dealers
- Providing dealers with corporate advertising dollars for each new vehicle
- Keeping local ads aligned with national messaging and brand and legal standards
- Allowing dealers to claim marketing expenses from a nationally pooled fund
Dealers must comply with their manufacturers’ terms to use co-op funds. Terms often include rules around campaign revenue goals, the types of ads dealers can run, ads’ content, tactics used, and proof of performance.
When marketing to local customers, customization is key. Examples of automotive co-op funded ads include four-wheel-drive SUV vehicles plowing through snow in Colorado, and Mazda convertibles cruising the streets of Miami Beach with their tops down. Marketing SUVs in sunny Miami and convertibles in Colorado winter would not resonate the same way.
Co-Op Strategies for Automotive Companies
Brands from BMW to Audi provide automotive co-op advertising funds. But for even the best brands, co-op advertising is only as good as your co-op program. To increase funds utilization, encourage partner participation, and drive ROI, you need a great co-op marketing program and a strong channel marketing strategy.
1. Provide Fund Transparency
If dealers can’t see their funds, they won’t use them.
2. Keep Co-Op Program Rules Simple
Over 55% of automotive dealers say that co-op programs have too many rules, restrictions, and paperwork. Unnecessary complications discourage dealers from using co-op to market at the local level.
3. Make Reimbursement Efficient
The most effective co-op marketing programs have straightforward approval processes so channel partners can receive reimbursement quickly after submitting a claim.
4. Offer Ongoing Marketing Support to Dealers
Only 33% of local partners are satisfied with their overall program. 33% surveyed indicated a need to focus on dedicated program support, and 34% are looking for marketing recommendations. Automotive brands should provide support to get dealers’ marketing off the ground, guidance on what the most effective tactics are, and do-it-for-me programs for dealers who simply do not have the time for local marketing.
Doesn’t Your Brand Deserve Stronger Local Marketing?
Contact BrandMuscle to learn how to build a successful automotive co-op marketing strategy and drive local customers to your dealer network.