An easy way for a small business to expand its marketing budget is through collaborative advertising. Cooperative advertising, or sometimes abbreviated as co-operative advertising, is when a manufacturer of goods for use or resale by a service provider reimburses advertisers for some or all of the advertising costs of their products. These programs are popular simply because they save money for commodity manufacturers. The bottom line is that local ad rates available to ad businesses are at least 20% lower than national ad rates. So, the benefits for commodity manufacturers are increased brand awareness in that market, improved dealer relationships, and more, at lower local advertising prices.
However, the cooperative advertising program is an integral part of the manufacturer’s own strategic marketing plan and thus will vary not only from manufacturer to manufacturer, but also from product to product. Additionally, because these programs are part of a manufacturer’s strategic marketing plan, strict rules and regulations are often imposed on cooperative advertising dollars. These rules and regulations can cover selected media channels, product placement, ad placement and size, and more. Additionally, advertisers may have to follow a separate policy for financial reimbursement of ad spend.
Due to the perceived complexity of collaborative advertising; businesses may be intimidated by regulations and will not pursue collaborative advertising opportunities or ask for help. Business owners or managers should ask each supplier that supplies the company what collaboration programs are available to the company and how the company can take advantage of those programs. Once an advertising agency has established a cooperative advertising program with its suppliers, all necessary information should be shared with representatives of the chosen media channel to ensure that advertising is performed correctly in accordance with the producers’ rules and regulations.
Cooperative advertising is a win-win situation for both the producer and the advertising business. These programs allow manufacturers to increase brand awareness in the marketplace at much lower local advertising rates and allow advertisers to increase their marketing budgets without increasing business costs. All small businesses should actively pursue these valuable collaborative advertising opportunities.