A Primer on Cooperative Advertising and Outdoor Ads
A Primer on Cooperative Advertising and Outdoor Ads is a guest post brought to you from ADstruc.
What is co-op advertising?
Cooperative, or co-op, advertising is a common practice where two parties share the cost of an advertisement for their mutual benefit. Co-op is popular with franchises, retailers & manufacturers, and local businesses.
Larger parties (e.g manufacturers, brands, and franchisors) typically covers the lion’s share of an ad’s cost via reimbursement or in trade. This makes local advertising affordable for your business, while simultaneously lowering out-of-pocket and inventory costs.
Is it worth it?
Absolutely! Co-op programs often reimburse 50-100% of eligible media costs.
If you’ve ever seen an ad for your “Tri-state,” “Area,” or “Local” Honda/Toyota/Ford/Lincoln dealer — that’s co-op at work. And co-op programs aren’t always controlled by corporate parents. Local auto dealers representing the same brand often pool their marketing funds together to get volume discounts on media.
Even major national brands use co-op to help promote partnerships.
What kind of media can I buy with coop?
Depending on the program, there can be a wide range of eligible media: TV, Radio, Outdoor, Print - even Google Adwords & banners.
Home & health services, hardware & furniture stores, and food franchises are three of the biggest users of outdoor co-op advertising. In all of the examples shown, both the local business and the franchise logo are prominently featured. This co-branding is a common requirement.
Why should I spend my co-op dollars on outdoor ads?
Outdoor advertising brings customers in the door, reaches people on the move, enables awesome creative, and is very affordable. With that kind of return, it’s the perfect medium for co-op!
The CPM chart and billboard pricing map below illustrate how outdoor stacks up against other media and the average costs in several markets: CPMs for competitive media - courtesy of OAAA
Four week billboard costs in major DMAs
Where can I find out about co-op programs and eligibility?
Check with your manufacturer, franchise, or brand rep to see if they have a co-op program. Even if they don’t, you may be able to negotiate a beneficial deal. After all, co-op benefits both parties! You can also use Recas to investigate co-op opportunities.
How do I buy outdoor advertising?
At ADstruc, we make buying billboards and outdoor media a snap. Our planning and buying tools are intuitive and put you in control. Because nobody knows your business like you do.
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While these franchisees might think they are helping the brand, in fact it’s just the opposite.
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In either case, the franchisee’s right to sell the franchise will be governed by the transfer provisions in their franchise agreement.
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Kardashian matriarch Kris Jenner has been criticized for “pimping out” her children, but the mother’s shrewd dealings may be a smart move. Of the 10% manager fee Kris takes from her family members’ earnings, daughter Kourtney says, “We’d have to give it to someone else; I’d rather keep it in the family,” and Kim states, “She has this vision for us, and she makes it happen.” In fact, it has been reported that Kris “makes it happen” to the tune of $65 million a year. What can business owners learn from this? When the goal is to build wealth, keep it in the family – all of it.