With more than 4500 co-op programs available the US, digital co-op advertising presents a huge opportunity for local retailers that carry national brands.
The way co-op works is that manufacturers (e.g. Chrysler) are willing to reimburse retailers (e.g. a Chrysler dealership) for a portion of their advertising costs.
Co-op programs stipulate certain requirements for ads, such as having the right fonts, colors, and imagery, in order for them to qualify. But the ads can also have elements unique to the advertiser, such as a dealership location and testimonial quote.
For approved ads, the manufacturer then pays 30-70% of the cost of the campaign. This is essentially free money that local businesses can use to get way more bang for their buck. A 50% reimbursement effectively doubles the campaign budget.
But of the $1.7 billion available in co-op programs each year, about $450 million is left on the table, unclaimed by local businesses.
Not only is free money being left untapped, co-op participation in digital advertising lags further behind. Digital advertising will see tremendous growth over the next few years, growing from a $5.15 billion in spending in 2014, to an $8.54 billion annually by 2018. But adoption of digital channels for co-op ads is growing much more slowly.
However, digital can be one of the easiest channels to take advantage of these funds, on any budget. Whether your a local business, or someone who sells advertising to SMBs, you should learn more about this exciting opportunity.
Check out this brief webinar to learn more.