What Is Co-Op Marketing?

BrandMuscle | November 11, 2020

You may have encountered the term “co-op marketing” before, but what does it mean?

Co-op marketing is a powerful strategy that allows companies to expand their marketing efforts across multiple locations by sharing brand assets and marketing costs with channel partners. This collaborative approach benefits both the corporate brand and independent channel partners, such as franchisees, dealers, retailers, and small business owners, in a mutually beneficial way.

How Do Co-Op Marketing Programs Work?

Brands rely on channel partners to drive local sales and raise awareness. Still, these partners often need more time, knowledge, and resources to develop and execute an effective marketing strategy on their own. Our State of Local Marketing Report reveals that 53% of partners lack marketing knowledge.

This is where co-op marketing programs step in. These programs provide a framework for channel partners to access corporate funds and marketing materials while ensuring proper usage of brand assets and adherence to brand guidelines. Some co-op advertising programs establish rules regarding vendor selection, provide incentives for effective tactics, and facilitate the submission and reimbursement process. Affiliates can use co-op funds for anything from point-of-sale displays to digital ads to promotional items and rentals.

Brands often create the messaging for a corporate campaign and distribute marketing materials to channel partners through a co-op marketing platform. Depending on the program’s sophistication, these brand assets can be customized to make the messaging more relevant at the local level. Channel partners then choose the tactics to execute, follow the established guidelines, and use their co-op funds to cover the costs.

The brand may partially or fully reimburse the partners, as reimbursement levels vary based on the selected tactics. For example, a brand might contribute more funds toward a local social media campaign, recognizing the higher return on investment (ROI) than, say, branded golf balls.

By relieving channel partners of the burden of developing a marketing strategy, creating materials, and funding execution entirely on their own, co-op marketing encourages their active participation. Moreover, it streamlines the effort and resources required to scale an advertising campaign. With access to the same marketing materials across locations, independent channel partners no longer need to invest in creating their assets or worry about misrepresenting the brand.

What Are the Benefits of Co-Op Marketing?

While setting up co-op marketing programs may require an initial investment, the benefits of leveraging a strategic fund management platform to support local marketing efforts are substantial. Some of these benefits include:

Lower Advertising Costs

Sharing marketing and advertising assets through a co-op program reduces creative expenses for the brand. Enforcing the use of pre-approved print providers for physical advertisements streamlines production, storage, and shipping, resulting in cost savings. Additionally, the program’s rules guide channel partners toward

Sharing marketing and advertising assets through a co-op program reduces creative expenses for the brand. Enforcing the use the most effective marketing tactics, minimizing wasteful spending on tactics that don’t generate significant revenue.

Hyper-Local Brand Awareness

One of the most valuable benefits of co-op advertising is the ability to create hyper-local brand awareness. Increased participation in marketing efforts among channel partners activates the brand locally, expanding its presence in areas that might otherwise be challenging to reach. Sharing brand-approved assets ensures consistent brand experiences for customers, regardless of location.

Campaign Performance Analytics

An advanced co-op fund management platform provides valuable insights and analytics locally. Brands gain a deeper understanding of how partners utilize their co-op funds and how their investments perform. However, brands still managing their co-op marketing programs through spreadsheets or outdated technology may struggle to access campaign performance analytics and remain unaware of whether partners effectively utilize their funds.

Business Growth

A well-executed co-op marketing program can drive sales and brand awareness, leading to an increase for both the brand and its channel partners. According to the State of Local Marketing Report, partners whose businesses grew by 10% or more attributed their success to co-op marketing.

Co-Op Marketing Best Practices

Not all co-op marketing programs are created equal. Many brands face poor fund utilization, frustrated partners, and lackluster ROI. Successful brands build their co-op programs on these best practices:

1. Provide Transparency into Available Funds

Channel partners need visibility into their available funds to utilize them effectively. Make it easy for partners to check their balances by using a user-friendly platform that automates funds availability and sends email reminders to engage with the marketing program. If checking balances becomes overly complicated, such as requiring partners to email corporate or navigate through spreadsheets, they may not bother accessing their funds.

2. Keep Co-Op Program Rules Simple

Simplicity is critical for co-op program rules. Too many regulations can overwhelm channel partners and discourage them from participating in local marketing efforts. The most effective co-op marketing programs have streamlined approval processes, straightforward asset usage and tactics guidelines, and flexibility in selecting vendors. This simplicity empowers partners to receive quick reimbursement and execute their marketing plans.

3. Offer Ongoing Marketing Support to Channel Partners

Avoiding common mistakes is crucial for the effectiveness of a co-op marketing program. Lengthy ad approval processes, complex claims procedures, confusing reimbursement requirements, unclear brand guidelines, manual or outdated fund management systems, and a lack of incentives for partners to invest co-op funds in the most effective tactics can hinder success.

Ready to Explore Co-Op Marketing for Your Brand?

Contact BrandMuscle today to learn more about building a successful co-op marketing strategy and activating your brand.

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