Episode Description:
If you are a business that sells a product or service that someone else produces or you create a product or service that other businesses sell on your behalf – than you SHOULD know all the ins and outs of co-op advertising.
In this episode I highlight the benefits of co-op advertising from both sides of the business relationship. Each side is served mutually to great benefit when a co-op campaign is done right! Save half your advertising spend or double your exposure at the same rate!
Action you can take right now:
- First, simply establish do you have any opportunity for cooperative advertising with any vendors? Or, do you provide products or services that resell your services that you could offer your customers co-op credit?
- To make an impact – what do you want to get out of the co-op campaign? Promoting a new product? Brand awareness? Filling TOFU? Creating demand?
- If creating the co-op opportunity – the next step is to build out the playbook your end-user will use for success. If you leveraging a manufacturers or vendor co-op opportunity – make sure their goals are aligned with yours, and ask if they have a detailed playbook available.
Episode After-Thoughts:
Cooperative advertising is something I believe is underused and under-supported for the companies that do use it. Marketing departments are usually overwhelmed in companies and co-op campaigns fall to the bottom of their list, so the end-users usually don’t get the support they should. Ad’s end up being way to broad because the marketing department doesn’t want to take the time to help the end user define targets, utilize dynamic remarketing, or other advanced strategies that end-users struggle to setup.
This puts a lot on the end-business utilizing the co-op dollars, however they usually don’t have the resources on hand to make the most of the campaign, which is why it’s so important the host provide a detailed playbook, assets, and strategies.
Episode 49 Transcript
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Imagine a win win advertising scenario where you can cut your costs in half or double your reach. OK, it’s not magic, it’s Co-op. Advertising that more coming up on the marketing and service.com podcast.
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Hey Justin Varuzzo here from marketingandservice.com podcast the podcast to help you build your business by creating incredible customer relationships.
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Or, if you want to do me a huge favor, leave a 5 star review.
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What marketing challenge you are having with your business and I’ll make an episode just for.
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You on today’s episode I want to talk a little bit about cooperative advertising.
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It might be called Co-op advertising.
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You might see Co-op marketing, but the idea here is that you can partner with another business to hopefully cut your advertising costs in half, and this is probably something that you’ve heard in your business, and maybe you’ve even tried it.
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You’ve done it before, or maybe you heard about it, but you didn’t take advantage of it because you just didn’t understand exactly what it meant.
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So on today’s episode I want to dive into this because it’s a great way for you to save money.
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And it’s a great way for the partners in your business to also save money.
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And by partners I don’t mean literal partners in your business.
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I mean the companies that you partner with on a day-to-day basis. So what I’m saying here is I’m going to look at this from two different perspectives.
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The first perspective that I really want to jump into, which is probably going to apply to most people listen.
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Into this is the end user and by the end user I mean that your business is a retailer or you’re a service provider or whatever it is that your business does.
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You have vendors, suppliers or manufacturers that you use to help deliver your product to the consumer or to another business to the real end user, right?
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So as a retailer or service provider, you are likely a company that partners with vendors, right?
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You’re taking some type of product or service.
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And maybe you’re an IT company and you are an authorized Microsoft engineer.
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So you partner with Microsoft on this and you promote the fact that your employees are certified Microsoft technicians.
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Maybe you are just a retailer and you sell a product that’s manufactured by a particular company.
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Chances are that the vendor that you use.
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Has some type of Co-op advertising program and here’s why this is really important to you.
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Most of these programs give you the opportunity to advertise your product.
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Or service use in conjunction with that vendor, and in doing so, the vendor will pay some, sometimes all of your marketing expenses involved with a particular campaign.
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So it’s really smart to reach out to all of your vendors and ask them first.
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Number one.
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Ask them, do you offer any type of Co-op?
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Advertising or marketing?
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Tunities and now this is not something they have to do.
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It’s not something they all do.
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Some have very fixed policies.
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Some vendors may offer it to certain customers or clients that they use if they think there’s a good opportunity there.
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Others don’t do it at all, and it’s not right or wrong, and I will get into why they should do it.
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But for you, at this point you just want to know who are the vendors.
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That you deal with that do offer Co-op advertising and then you want to jump on board and find out what do you have to do to.
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Move forward, and the reason that’s important is sometimes the commitments could be high higher than you’re comfortable with.
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They might say, hey, yeah, well we’ll partner with you.
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We’ll do a Co-op campaign, but you’re going to have to spend $10,000 a month for a minimum of six months.
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And you might say there’s no way I’m spending $60,000 in Facebook ads with no promise of any return. Even if they say, hey, we’ll give you 20,000.
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That back within a year you may not be comfortable with that.
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So you want to make sure that you know what the limits are and what the agreement is before you jump into it.
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But if you’re dealing with a company that is going to do this with you, then you’re going to hope for a few things.
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One they are going to help you reduce your advertising costs.
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If you’re really lucky, it’s a company that you already advertise on their behalf.
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And now you’re going to take your existing advertising and have the opportunity to just pay less for it, right?
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That’s kind of like the dream scenario where you can cut your advertising in half and you really don’t have to change anything.
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And then this vendor is just going to write you a check and say hey, thanks for doing this cooperative campaign.
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Another opportunity here is that you can get reimbursed for those expenditures, or a portion of them over time, and there’s nothing wrong with that either, because if the campaign is successful, you will continue to run it and then you will continue to get reimbursed a percentage, and that’s great for your business as well, and it’s really great.
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If you’ve never done that type of advertising before, maybe let’s say in this scenario we will use a Facebook campaign.
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If you’ve never done a Facebook campaign, this is a great opportunity to kind of tip your toes in the water without having to jump all in right.
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You’re going to have this extra money, and hopefully if you’re dealing with a good vendor who is going to listen to this episode, they’re going to give you a lot of support in this cooperative campaign as well.
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They’re going to give you a copy that you can use.
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They’re going to provide you with.
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Images they’re going to provide you with a playbook that will give you step by step instructions on how to do it, and they’re going to provide you with support.
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If you have questions along the way, again, that’s the dream scenario that doesn’t always exist, but it’s what the goal should be, and it’s what you hope that you’re going.
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To get but.
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Beggars can’t be choosers, so if there’s any Co-op opportunity whatsoever.
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You should really try to take advantage of it if it makes sense, and if it’s financially feasible, I can tell you that on the vendor.
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And most companies are doing this so they don’t have to pay for their advertising up front, which means you are going to have to usually pay for these opportunities up front and then you’ll get credits back later on, either through an invoice or a reimbursement check.
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Everyone can do this a different way, and there’s no rules for this.
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There’s just practices that I believe are.
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Best practices.
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Next, I want to jump into the other side of this and that is if you are a vendor or a manufacturer that wants to offer cooperative advertising to your clients or customers, and this gets a lot more interesting than the other way around.
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And mainly this is because.
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Of the scale of your ability to be able to do this and how you can potentially fund this makes for an exciting conversation.
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So, just like being a retailer for.
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Example, as a manufacturer or a vendor for your own product or your own service, you want to get your advertising costs to be as little as possible.
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So in this case, what you want to do is you want to enlist all of your customers to share in the advertising cost for this particular product or service.
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Or maybe it’s a promotion.
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Whatever the case, maybe you hope that you can take your dealers or your clients and allow them to absorb some of the cost of this.
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Marketing to allow you to reduce your costs.
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It also allows you to reach specific target markets where you know the dealer is going to be vested in finding the perfect target market and you don’t have to do this research in every geographical region that you might have clients or customers in, so there’s a few benefits to creating this type of Co-op.
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Marketing relationship, which is why a lot of companies do it the 1st as we just discussed is it’s going to reduce your advertising costs potentially in.
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Path one of the other reasons that we mentioned is getting the advertising into the local markets where your product or service serve people, right?
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The other thing this is incredibly important.
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You potentially can eliminate out of pocket expenses upfront when you go down this route, the reason?
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You’re able to do this is because the client or your customer or the dealer that is offering your product they’re actually going to front the entire price as we just discussed of their own marketing camp.
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You’re going to reimburse them so that reimbursements one is going to happen after the fact, so you’re going to see immediately.
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Results based, right?
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But you could take it a step further and you can say that you’re going to reimburse your customers over time, so maybe you give them an invoice credit every month for so many months until the allotted.
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Budget for that campaign has been exhausted.
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Now, think about this, you’re basically being able to take that one time advertising hit, and now you’re spreading it out and you’re not even necessarily paying for it.
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You’re just maybe reducing your margin a little bit on that particular product or service on that invoice.
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Going to your client, you can also do this.
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As a reimbursement from new orders right so if a customer is placing a new order.
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You can say additional orders that you place as part of this promotion or campaign.
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We will reduce the price from right.
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So if you have a particular product that you’re incredibly eager to get to market and part of your go to market strategy is a cooperative advertising campaign, you’re going to be able to take the opportunity to have your customer.
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Run the campaign.
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And then you are going to base your reimbursement on their new orders.
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So again, you are giving another layer of dedication and commitment to that dealer who is going to be the one ultimately responsible for the growth.
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So the hope is that they run their ad campaign and as a result of their effectiveness, they’re going to turn to you and say I need XY or Z.
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And I need X number of units beyond what I initially ordered because of the success of this promotion.
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From there, you’re going to say great, we’re going to discount this a certain purse.
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Manage to subsidize and to essentially repay you for your advertising campaign.
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Now keep in mind none of these things are rules.
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Again, this is flexible.
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This is a conversation you could add.
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Chances are if you serve a lot of customers and you’re looking to do this at a large scale, it’s going to be very difficult to come up with individual and special circumstances for each dealer.
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Where they have different rates or different discounts or different growth opportunities, it’s probably going to be easier to just have a universal system that will be easy to manage because what you don’t want to do is go down this road and then find out you need to put a ton of resources into simply managing the reimbursements and the success of the.
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Campaigns, so now that we got that part of it out of the way as a manufacturer or a vendor, this is where you are going to be able to make a huge impact on your ability to see success.
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What you want to do next, which not everybody does, is you want to create a step by step playbook.
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That your customers can follow.
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And what does that mean?
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That means you literally want to create a deck or a set of instructions that walk step by step exactly how your customer can set up their campaign.
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Because keep in mind, chances are you may have greater resources than they do.
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You may have greater experience than they do now.
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Maybe they have it down, in which case.
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That’s great, they’re going to be on their own, and they’re not going to bother you, but let’s be honest, a lot of small businesses are not experts when it comes to targeting, otherwise this podcast wouldn’t exist.
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So think about that you need to make sure that when you go into this that you are giving your customer the tools they need to succeed because their success is your success.
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Worst case scenario, they’re going to not get any growth, and they’re going to lose their half of the advertising money to 1 vendor.
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In your case, as the manufacturer.
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Or as that vendor, you’re dealing with hundreds of customers that may be taking you up on this cooperative advertising opportunity you are going.
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To be losing them.
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Money all across the board.
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Even though you can offset some of those initial expenses and really kick the can down the road in terms of paying for it, the problem is is that you want it to be successful and you need it to be successful because you want to increase your sales or revenue or increase the exposure and awareness of a new product.
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So this is really important.
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You really want to take.
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Time, the most amount of time.
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Work with your marketing specialists.
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Work with your staff if you need to enlist and hire so.
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One just for this one task that is a great idea.
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You can find a marketing coach and marketing consultant that can help create a step by step playbook on exactly how you want the ads now.
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What would that be?
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That could be suggestions for photos, video clips, product demonstrations.
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You could offer the copy for the ad titles.
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Copy for the ad text ideas and suggestions for landing pages.
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You could also do this in different structures, right?
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You can offer the customer options on how to approach this because.
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It’s not probably going to be a one-size-fits-all solution. Maybe some of your clients are looking to promote a new product or just get exposure for your service because they just started carrying it.
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While you may have a mature customer that’s been with you for a long time, that has much different needs.
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They may be trying to break into a new market, or maybe they want to promote a legacy product that’s a.
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Cornerstone of their offering, right?
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So all of your customers might have slightly different needs.
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You’re probably not going to account for every single one, but the bottom line is you want to make it easy.
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You want that playbook and you want to make it super easy, so if someone doesn’t know what they’re doing and they’ve never ran an ad campaign before, they’re going to get baby steps and step by step instructions with screenshots.
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Exactly what to do, and then a library of possible.
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Ads right, a library of titles.
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A library of descriptions.
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A library of images, a library of assets that they can use in this marketing effort.
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If you want to take this a step further and really provide an exceptional value, you can also create a playbook for more advanced users that we just talked about.
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So if you know you have a certain segment of clients that have in-house.
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Marketing mechanisms were already worked with marketing consultants.
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This could be a great strategy where you can dig into a little bit deeper.
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AB strategies.
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Advanced market segmentation.
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You can use look alike audiences using your existing customer data.
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You can create and find insights in your existing customer data on maybe to better target and find better demographics.
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Trying to reach attribution strategies, right?
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These are things that advanced people are going to want to know.
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They’re going to want to know where is the ad being clicked.
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Where is it landing?
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When’s the person coming back?
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What are the steps that the end user is taking after they see that ad to lead towards your goals, right?
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Brandon, product messaging and maybe you have to seek approval on this.
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Maybe you will want to approve.
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The ad set before you commit to reimbursing it.
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There’s nothing wrong.
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With that again, this is an open book. You get to design this Co-op system anyway. You really want to do it, but you want to make sure that it really adds a lot of value to your customers and you want to make sure at the end it’s adding value to the end user of your product or service, so keep that in mind that you’re going to have different people with different.
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Levels of.
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Knowledge, and at the very least if you do step by step instructions for a beginner, that means that that person will be able to walk through the process with no problems.
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And if someone has super advanced skills in this area, then your playbook is not going to offend them in any which way.
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They might just say, hey, I thanks for the advice, but I’m going to.
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I’m going to do these other things.
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You don’t.
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Do and maybe it’s something you want to agree with again and sign off on before you consider reimbursing it, but you should let them do that.
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Don’t hold those people back because they really know what they’re doing, and they’re probably overall using those advanced tools.
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Going to have much more of an impact than the beginner anyway, so I hope this episode has kind of given you an overview of what cooperative.
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Advertising is.
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And how cooperative advertising can help achieve your advertising goals and how it can help achieve your clients goals and how it can have a significant impact on end users and target markets that you get to define.
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And in the end, hopefully it will drive revenue growth and boost profits and make you a happy person.
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Make your clients happy because their businesses.
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Will grow and and users will be happy because they’re finding solutions to the problems that they’re experiencing that they didn’t know existed before the ad campaign.
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Things I know this is a fairly sophisticated process and it’s not an overnight thing that you’re going to be able to do very quickly, and I know this is a really broad overview, but if it’s something you don’t do, or if it’s something you’ve heard of and you haven’t taken advantage of, if you’re a retailer or you’re a small business and you work with vendors who provide cooperative advertising.
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And you don’t understand it.
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Hopefully this gives you kind of a broad overview of what it is, how it can help.
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Likewise, if you’re a manufacturer and you make a product again, keep in mind that cooperative advertising is a great way to get huge impact that mutually benefits your network of dealers and customer.
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And my hope is that you at the very least get some keywords here, that if you decide, hey, you know this sounds like something interesting that I might want to try.
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You can Google some of these words playbook.
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You can Google Cooperative advertising cooperative advertising policies, you know, do some search and try to find if you really want to do this and you really want to build it out and do it correctly, obviously.
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This is not a step by step tutorial on how to do it, but I really just wanted to present the idea.
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And give you the concepts that you would need to think about to see if this is something worth moving forward with.
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And for many businesses, it is absolutely worth it.
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For some businesses and some services depending on what it is, it may not work for you.
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It may not be worth it, and that’s something that you’ve got to decide on your own.
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But again, hopefully having these tools and having this.
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A little bit of knowledge now that we’ve learned over the last 20 minutes will be something that you can take with you and decide if this is something you want to move forward with.
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Hey thanks so much for listening, I super appreciate it as always.
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Is do me a big favor.
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Share this with a friend.
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If this episode helped.
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Share it with a friend.
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Share it with a business partner.
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Maybe you have a customer that might be interested in cooperative advertising.
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Share it there.
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Share it on social media.
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I don’t care where you share it.
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The more people who share with the happier I am.
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And if you don’t mind taking that moment to leave a review for the podcast, it always means the world to me.
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We have some great.
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Episodes coming up, so keep checking back for updates.
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We’ve got some great guests lined up and some great guest episodes already done that will be coming very, very soon.