Co-op ad dollars can be a significant portion of a business’s budget. They empower these business owners to spend this money to drive local traffic and sales. The problem is that much of these dollars go unspent! As a local media seller, you have an opportunity here to expand your customers’ advertising reach without them incurring any more costs.

The Story of Co-Op Dollars

Brands make billions of dollars available for co-op advertising to retailers that sell their products. What a local company receives depends on its inventory value and can reimburse them for approved ad campaigns. Unfortunately, a big portion of it goes unused, and digital advertising is often the category that doesn’t capitalize on these funds. The Radio Advertising Bureau reported that in 2021, 43% of small businesses had access to these funds, but only half used them.

This ad budget can drive benefits for all parties. Manufacturers get their products in the spotlight. Local businesses can drive more traffic to their stores, and you get more advertising revenue. If you want to get more of these dollars, here are some great tips.

Find Out What Brands Distribute Co-Op Dollars

First, you have to know where the money is. You may already have information based on your industry expertise and past sales. However, the programs change each year, and the RAB has an excellent resource for members! Check out their Co-Op Directory if you’re a member.

There are other ways to track this, as well. A quick Google search for “co-op directory” will deliver options. Some of these are free, while others require a subscription.

Discuss Co-Op Spending with Applicable Retailers

Next, it’s time to have a co-op conversation. Talk to your clients about what’s available to them and any parameters regarding spending. Retailers do have to make the upfront purchase and then receive the reimbursement. You and your customer can go through all the policies and come up with questions and ideas.

After you have a complete picture of the opportunity, you can contact the manufacturer on behalf of your client. By offering to help them with this, you are removing some burdens from them (and likely a reason they don’t spend their co-op funds). It demonstrates your commitment to them and ensures they can maximize the opportunity.

Define Campaigns for Linear and Digital

Once you understand manufacturing programs and have the request and authorization forms in place, you’ll need to create a campaign strategy. Co-op dollars are good for radio and digital advertising, which complement each other nicely.

Your client likely won’t have much control over the creative, as the manufacturer wants to keep the brand consistent. So, that’s not where the strategy starts. Rather, you want to talk about tactics. What kinds of digital ads make sense for product-specific campaigns?

  • OTT/CTV: Video ads that play during streaming are a great option, especially for industries like auto and grocery. The manufacturers of cars and products are in these channels already, so it makes sense to place ads here. You can recommend specific targeting depending on the type of car and items.
  • Display with geofencing: Use geofenced display ads to target competitor locations. Going back to the car example, you can set up a campaign that illustrates the vehicle’s advantages and promotions to lure away a buyer.
  • Video advertising: Programmatically placing co-branded video ads (manufacturer + local business) can be impactful. Get the targeting right to make sure those who see it will be relevant. You can lift the awareness of your client in the market by associating them with a well-known brand.

More Tips for Capturing Co-Op Ad Dollars

  • Don’t lead a pitch to advertisers with co-op dollars. It’s part of their budget but only for specific products. If you focus only on this, the business may not contribute anything further once the money is gone. Start the conversation after you have the yes on ad spend that comes directly from their funds.
  • If the stringent requirements for co-op ads seem overwhelming, seek out support. Again, the RAB has a program for this. You can also look to other sellers and your managers who have been successful here.
  • Be sure you have enough time to execute because many manufacturers have to approve the ad, which could be a long process.
  • Don’t focus only on the auto industry. The vertical continues to rebound, with many expecting the second half of the year to see an increase in ad spending. Dealerships will always be an excellent co-op target, but there are more business categories to consider, including home improvement, grocery and specialty retailers.

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