For many businesspeople, marketing is one of the scariest parts of actually running things on their own. A lot of people become entrepreneurs or rise in a larger business due to their dedication to the niche or type of work, not marketing itself. As a result, there are a lot of unknowns, and as we can see, there are many high-profileΒ marketing blundersΒ that can not only drain yourΒ wallet,Β but cut into your customer base.
But what if there was a way to try and minimize this risk, and find a way to pool resources for advertising that can stand up against the larger names in your niche? What if there was a way to potentially use the audience and name of one of those larger niches to increase your own chances of success? This is the basic principle behind co-op marketing, something that may help get your business to the next level.
The Basics on Co-op Marketing
In essence, the idea behind co-op marketing is a smaller company putting money into an advertising budget, and having that money matched by a corporate partner. One of the biggest examples of this is car dealerships. If a car specializes in a certain carmakerβs offerings, they may get some advertising money from the carmaker themselves. The reasoning from the carmaker is that they have someone out there supporting their brand, so it makes sense to try and put some money their way.
Think of it this way: itβs been proven statistically that there is a growing interest inΒ local advertisingΒ as opposed to massive corporate advertising. This is for a number of reasons, from cynicism on the part of the consumers to a basic interest in supporting local businesses. From the larger advertising partnerβs perspective, it makes sense to try and financially support a smaller companyβs advertising efforts. They still get the sale theyΒ want,Β but target a consumer who may tune out their commercials or radio ads.
There are other common examples ofΒ co-op marketingΒ you may see every day without thinking. For example, in a shopping center or mall, youβre likely to see advertisements for each retailer inΒ saidΒ center. In addition, they may also put out advertisements in the local newspaper for popular holidays or other times where thereβs a significant spike in shopping. Again, this works to the benefit of the larger company. Itβs a lot easier to advertise your product to certain groups in certain regions if you have first-hand knowledge of what they like. No one knows this better than local retailers.
Why Bother With Co-op Marketing?
Co-op marketing is a very versatile option, but at this point, weβve only covered the benefit to the larger companies working with smaller ones. However, the smaller company also sees a variety of differentΒ benefitsΒ from entering a co-op marketing partnership.
The major benefit, especially for small businesses, is how co-op marketing can drastically reduce the potential money you need to set aside for marketing endeavors. On average, a manufacturer will pay anywhere from 50% to 100% of the cost of placing a local ad. Not only does this allow you to reap the benefits of exposure to a larger audience, but also not have to worry about affecting your cash flow to do so.
Speaking of exposure, this tends to work in two different positive ways for the smaller company. For one, thereβs the sheer matter of volume and reach, the fact that more advertising dollars mean that you can put together a more extensive and effective campaign. However, working with a larger brand and having your name associated with theirs also lends an air of legitimacy to your business. The sight of your businessβs name next to an internationally known manufacturer is a clear sign of success.
Another way that the smaller businesses benefit is from knowledge and osmosis. Large, global companies pour massive amounts of money into studying advertising and their consumer base in order to get an idea of what they respond to most. This allows the smaller companies a chance to learn some effective strategies for a fraction of the cost.
As a final add-on point, while these are the most common co-op marketing relationships you see, itβs also possible for multiple small businesses to try and band together to do something similar. For example, two non-competitive businesses with a history of working together may pool together advertising money for a campaign which highlights both. The trade is that you donβt have the benefits of the resources of a larger company, but there is more freedom in what you can do, which we will get to in a moment.
The Key To Effective Co-op Marketing
When it comes to co-op marketing, what many people describe as a drawback is the fact that youβve committed to theΒ advertising standardsΒ of whatever entity you choose to work with. This can play out in terms of:
- Having a certain standard of advertising quality
- Utilizing only a specific type of advertising
- Hidden requirements
- Limits on what the advertising money provided by the larger entity can be used for
This isnβt always a bad thing. Remember, larger companies make a lot of investment in understanding what works in advertising, so it may behoove you to try and follow their lead. However, no one wants to be caught off-guard, so the first thing you want to do in co-op advertisingΒ is gettingΒ a clear understanding of the rules with an attorney.
The other important piece of this is making sure that your companyβsΒ internal structureΒ is ready to take on the added workload of a proper advertising campaign. Many smaller companies may have a small ad here or there, but itβs a big step up to regularly produce print or web advertising, even if you have the money. Make sure you have the marketing personnel either on staff or hired to do the bulk of the actual planning and formulation.
Another important key is making sure that you have open lines of communication with all the members of your co-op. This is going to be essential for a variety of reasons. For one, you need to be able to understand quickly whether or not your partner approves or does not approve of any advertising material before you send it out. In addition, communication makes it easier for them to give you general advice as needed. However, donβt think that youβre bound to whatever they say. For example, digital marketing is essential for advertising success. If you read or learn about a concept that you think makes sense to use, bring it up. Remember, larger companies want to use the up-close experience their smaller partners have as well.
Because there are several different companies or entities putting their money together for co-op advertising, itβs that much more important that you put together a proper formal strategy that allows everyone to benefit. This means not just recruiting professional help for putting together branding materials, but also at the thought stage. This is whereΒ Glint AdvertisingΒ is so helpful. We understand how advertising has evolved, as well as the mechanisms that drive consumer response. Whether youβre ready to start a campaign or just want a consultation, we are here to help guide you down a path of successful marketing and advertising strategies.
