Making the Most of Co-Op Dollars

2. Making the Most of Co-Op Dollars • US manufacturers allocate approximately $36 billion to $70 billion, annually, as co-op funds for which many (if not most) local SMBs, dealers, retailers and advertisers qualify to add to their advertising budgets. • Approximately $14 billion to $35 billion in co-op funds are never used. It’s difficult to imagine why local advertisers disregard the stacks of cash manufacturers are pushing across the table at them, and not claim their fair share. • According to 2016 research from the Local Search Association (LSA), “43% of US small businesses sell national brands that potentially qualify for co-op funds,” but only 42% of them have actually used those dollars.

3. Millions of Potential Retail Co-op Users • In the latest data available (2013) from the US Small Business Administration, there were 28.77 million small firms (SMBs) in the US. Of those 28.77 million, 2.56 million were in retail trade. • In addition, there were approximately another 13.56 million SMBs in accommodation and food services; arts, entertainment and recreation; real estate; educational services; etc. that could potentially qualify for co-op dollars. • There are reasons why billions of co-op dollars remain on the table – and this Special Report from Media Group Online will explore those reasons and show you and your advertising clients how to grab your share.

4. The Media Disconnect • A major challenge to maximize the use of co-op dollars is the disconnect between the media channels SMBs use for marketing/advertising and the channels (especially digital) for which manufacturers’ co-op programs are eligible. • According to a 2016 LSA/Manta study, 83% of SMBs used the digital media channel for advertising, but just 36% used co-op dollars in that channel while the numbers for broadcast (TV, radio and cable) were 16% and 36%, respectively. • The good news for TV advertising sales teams is that TV and digital are the most complementary media mix for local advertisers. Today, approximately 90% of all co-op programs are eligible for use in digital media.

5. Addressing the Co-op Challenges • Understanding and allocating opportunities – Co-op dollars are only a small percentage of qualifying wholesale purchases; and larger local retailers may qualify for multiple, annual programs. • Inventory control – The sales department or team must order enough qualifying merchandise, and then display it prominently to maximize sales. • More work for marketing – Marketing must choose the “best/right” media and/or media mix to communicate the manufacturer/brand as well as the advertiser’s localized branding.

6. Addressing the Co-op Challenges, Continued • Documentation and submission – A co-op coordinator or financial personnel must obtain accurate media invoices, complete any program forms and submit the entire package correctly and on schedule. • Digital dilemma – It can take more time and effort to secure prior approval for digital advertising campaigns that may include multiple email blasts, Website pages and social media posts, and with content that changes quickly. • The cost/value analysis – Faced with all these requirements and tasks, many local SMBs, retailers and advertisers, especially the smallest, may decide that the cost in time and money doesn’t generate enough value to use co-op programs.

7. Targeting the Best Co-op Dollar Businesses • BIA/Kelsey’s July 2016 Local Commerce Monitor survey of SMBs found that 18.4% of those responding used co-op funds; however, 42.5% of them were franchisees or licensees of larger national companies and operating one to five locations. • LSA recommends local businesses in the automotive market, car dealers and auto parts stores, specifically, as major users of co-op funds. During 2015, car dealers used $6.5 billion in co-op funds. • LSA also suggests home improvement businesses, stores that sell power equipment brands and motor sports businesses as well as smaller “mom-and-pop” retailers that might not be aware that they qualify for funds.

8. 10 Steps to Benefit from Co-Op Advertising • Make co-op more integral to your station’s advertising sales process – Include a co-op funds search as part of any prospecting and preparation of sales presentations. • Be the local co-op advertising expert – You can help other team members find opportunities for their prospects and clients and prepare presentations. • Sales managers are the catalyst for co-op advertising – It’s the sales manager who must make co-op advertising a part of every sales meeting, and promote it as a value proposition with each AE to boost sales.

9. 10 Steps to Benefit from Co-Op Advertising, Continued • Track co-op program proposals and the use of funds – Track the sales team’s co-op proposals and which clients use co-op and when and how much. Research shows that a CRM system is the best tracking tool. • Make it simple – Manufacturers and brands create co-op programs with many details and auditing steps. The ad team’s co-op expert can help make navigation of the process easier for fellow AEs and their prospects and clients. • Prioritize co-op advertisers – Many retailers and advertisers have prime selling seasons, so they and their seasons should be identified and matched with the appropriate co-op programs.

10. 10 Steps to Benefit from Co-Op Advertising, Continued • A co-op report – Prepare a weekly or monthly co-op report distributed via email to the sales team. The report features the latest co-op programs and suggested retailers and advertisers who could benefit from them. • Make co-op advertising a sales training topic – Dedicate one monthly meeting to train and discuss co-op with the team. Assign one AE to report on his or her online research about co-op programs during each meeting.

11. 10 Steps to Benefit from Co-Op Advertising, Continued • Integrate co-op into sales contests and promotions – Add a bonus opportunity to monthly or quarterly sales contests, awarding additional points to the AE that closes contracts with the most co-op dollars utilized. • Help AEs with co-op program research – The co-op expert can perform co-op program research for AEs’ prospecting targets, so AEs’ presentations are focused on those programs and the potential co-op funds available.

12. Media Group Online and LSA • Use the first section of the dashboard for a quick search by a manufacturer’s name and/or its products or brands. • Use the first box of the second section to search by numerous criteria. • The second box is your portal to many co-op program details. • The third box is where you can find co-op programs that match a specific industry or product category.

13. Ad Material Warehouse Tab • Click on the Ad Material Warehouse tab at the top of the page to access and download ads, scripts, logos and other materials for a client’s co-op advertising; and you can also search by category.

14. Co-Op Sales Leads Tab • The Co-op Sales Leads tab lists the most recent co-op programs in descending order, so you can immediately target a lead with a fresh program.

15. Tutorial Tab • On the Tutorial tab, you’ll find instructional guides and forms and templates to complete and submit, so your clients will receive co-op funds credits quickly.

16. A “Co-operative” Opportunity • LSA is THE premier co-op database and includes guidelines for all media types, including digital. • 8,043 brand records • 1,998 formal co-op programs • 1,722 specially arranged programs • 1,200 TV eligible programs • 934 digital eligible programs • 1,541 brand records with sample artwork • Everyone at Media Group Online invites you to call our office with any questions, comments and suggestions about the Local Search Association co-op directory.