Opportunity in Co-op Advertising: Digital Advertising

Co-op advertising funds amount to $50 billion annually in the United States. However, most of these funds are not utilized at all. Only 15% of local advertisers participate in co-op programs. One of the major reasons that companies and local partners are unable to tap into the full potential of co-op programs is due to the dynamic marketing and advertising landscape – that is now primarily digital. Described below are two major ways that agencies, brands, and local partners can fully utilize the potential of co-op programs.

Update the Program to Incorporate Digital

Co-op advertising is a local marketing technique that dates back to the pre-digital era and has failed to keep up with new and emerging trends in the market. The image below shows that co-op programs primarily focus on traditional marketing including newspapers, direct mail, and radio.

However, marketing has now majorly shifted towards the digital. The top eight categories for increased spending for small and medium-sized businesses all focused on digital marketing and the company’s website. The disconnect between what small and medium sized businesses consider significant in terms of advertising, and what co-op programs currently offer leads to billions of co-op funds being left unused.

Digital Tracking Metrics

Focusing on digital advertising in co-op programs may also prove to be beneficial when tracking which campaigns worked best. Tracking metrics include likes, comments, shares etc. Purchases made by consumers by clicking on local campaigns or sponsored ads on digital platforms can also be tracked. This helps determine which locality the ads work best in, what type of ads local customers respond to well, and which platforms work best for different localities. It can help both the brand and local partner develop a long term marketing plan to maximize the return on co-op funding.

By updating co-op programs to incorporate digital advertising, big brands and local partners can procure the full potential co-op funds currently left idle.