Brand Targeting with Co-Op Advertising
Co-op advertising plans with brand suppliers are an important source of financial aid for local business marketing efforts, but each plan has different earning schedules that can make co-op a challenge. Every program will have an earning window, which is generally a percentage of wholesale purchases over a set timeframe (an accrual period) to establish the local dealer’s co-op budget. This timeframe will vary from one manufacturer to another and may be based on purchases made in the current year, the previous year, a seasonal or fiscal year, or some variation.
This leads to highs and lows in co-op availability for dealer advertising during the year, especially in the first quarter. With co-op plans based on current year purchases, unless a business has placed significant orders in the first weeks of the year, plan accruals will be near zero. Ordinarily, brands that need heavier activity early in the year will factor that into their dealer co-op arrangements, like most of the Boating category that establish budgets with mid-year start and finish dates. With this structure, all of the boat manufacturers along with the outboard motor suppliers (ie., Mercury Marine, Yamaha, Honda, etc.) will have dealer advertising budgets for the all-important boat show season.
January is an excellent time to target dealers of brands with prior year earning structures. Plans of this type are available to Ace and True Value Hardware franchises, Allstate insurance agents, Benjamin Moore paint stores, Zondervan Bible outlets, and hundreds of other brands. With prior year plans, the manufacturer will usually alert each dealer to the budget they have access to for the full year. This provides an excellent opportunity to establish a long-term media promotional plan for the brand, but the dealers don’t always think that way with so many other products and priorities.
From the media sales side of the equation, it’s important to recognize when these budgets are allocated to target local dealers when their co-op dollars are available. Brand opportunities exist within many local small to mid-sized businesses and with a few questions and some follow-up can help build a solid base of advertising.
This information is provided by LSA Recas to help take the mystery out of co-op advertising. For more information on how Recas can help expand your brand advertising potential, please visit www.recas.com. Email Tim at firstname.lastname@example.org.