Local co-op marketing represents approximately $70 billion per year in manufacturer advertising dollars, yet according to a white paper released by The Local Search Association, over half of that funding goes unclaimed.

Co-op marketing program is when a brand offers to subsidize the cost of an advertisement placed by a retail channel partner in order to increase their presence in local markets. With the brand covering all or most of the cost, it seems odd for retailers to leave these funds on the table, but the reason boils down to complexity. 57% of retailers don’t participate because the process is too difficult, despite the fact that according to Gleanster Research, 80% say the programs add value to their business.

In order to increase local brand equity and strengthen retail relationships, manufacturers must establish processes that make co-op program participation simple, eliminating the inconsistent procedures, excessive paperwork and confusing reimbursement rules. Below are three ways manufacturers can transform their co-op marketing for maximum participation.

 1. Reduce the Creative Burden 

A retailers primary job in executing a co-op program should be coordinating the media placement and ensuring compliant execution. Asking them to develop the creative in accordance with brand guidelines is a tough ask for a business that doesn’t have the in-house designers and marketing support brands possess. Retailers not only lack the creative development resource though, but the time to engage in a series of lengthy creative review rounds. In fact, 25% of marketers indicate that their local affiliates don’t follow brand their guidelines.

To reduce the creative burden and automate artwork development, brands should provide an online partner portal of pre-configured programs that retailers can view and opt into. Each program should offer a unique catalog of omnichannel tactics, and each one of these tactics should be tied to a customizable ad template. In using templates pre-configured with brand compliant options, there is no need for a compliance verification process. For the retailer, this means that they can gain pre-approval on expenses rather than waiting for reimbursement, while for the brand, this means less time spent on administrative tasks. The time and operating cost efficiencies are only part of the benefit though. In streamlining co-op marketing into a cloud environment, brands can digitally recommend programs and customization options based on product inventory, shopper insights or program performance.

Providing turnkey marketing packages that require minimal effort for your retailers to execute will allow them to place more of your brand equity in their channels while maintaining brand consistency.

2. Automate Fund Distribution 

Another obstacle to retailer co-op participation is the payment process. Co-op funds are typically granted as a reward for increased product sales, yet retailers must foot the cost of the program, submit a claim, and wait anywhere from six to ten weeks for reimbursement. This limits cash flow to the retailer and requires that they email or fax a claim in accordance with manufacturer regulation for each tactic execution. But why create all this red tape when there’s a way to provide program subsidizes upfront?

The reason for post-execution reimbursement is so that the brand can verify that the program was run in accordance with brand standards, but in having retailers use pre-approved tactic templates, the need for compliance review is eliminated, as the artwork and assets are already configured in accordance with brand guidelines. With this compliance control in place, brands could automatically apply the co-op funds upon approval of the submitted program order within the partner portal. For example, brand managers could simply receive an email notification upon  order submission, login to review the order details (run time, cost, distribution list, etc.), and hit approve to release the funds and route the artwork. To ensure retailers understand how their co-funds are being applied, tactic pricing should be made transparent, including total cost and the percentage that is co-funded, and purchases should be tracked in real-time co-op budget reports that are virtualized within the portal.

By migrating to an online platform that releases the funds upon order approval, retailers will have more purchase power and in turn, be able to execute more co-op marketing.

3. Integrate into Account Strategy

Many retailers don’t utilize co-op funds simply because they aren’t aware that they’re available or they don’t understand the value. In fact, lack of knowledge is cited as one of the key barriers to co-op marketing participation. For this reason, account managers and field representatives must be trained in how to sell-in the value and integrate co-op program planning into their sales processes.

Before going into a meeting with a retail customer, sales should know which brands have co-op funds available and of those brands, which offer the greatest value to the retailer in terms of category growth and alignment with current occasions, promotions, and events. The rep should plan the co-op programs as part of the customer’s holistic shopper marketing plan, layering co-op programs over planned brand promotions to maximize results. In the meeting, the rep should explain how the retailer can maximize their involvement in the co-program and the benefits that it will deliver, but the conversation shouldn’t be one-sided. It’s important to facilitate two-way communication to build trust and encourage the retailer to share customer insights that can be incorporated into program design. Communication throughout the life of your partnership will help position your brand as less of a competitor and more of consultative partner, there to help them to make sense of data to achieve common goals.

With everybody having a voice within the co-op campaign, the connection between manufacturer and retailer is stronger, and the two are able to understand how to align programs around shared insights and objectives.

More Local Equity—More Often

Simplifying the co-op participation process can be the difference between low and high levels of retailer participation. With a unified system in place that brings all elements of local marketing execution into a collaborative environment, partners are provided with a better use experience that makes participation easier and the results more transparent.

To learn how you can put your co-op dollars to work with a Partner Marketing Portal that makes tactics, pricing and reporting available at the local level, please call 203-731-3555 or email inquiries@cierant.com.