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BizReport : Advertising : August 13, 2015

Study: Brands missing out on co-op options

Local businesses are missing out on billions in marketing options - many because of a disconnect between the bigger brand and the local business. According to a new Netsertive/Borrell Associates study about $14 billion in co-op branded marketing dollars are going unused each year.

by Kristina Knight

Most large brands offer co-op options to their local businesses in which the cost of an ad is split - or co-oped - between the local 'branch' of Brand A and the main branch hub. In the case of car dealerships, for example, GM would pay for part of an ad for Local City GM Dealership. And, while more than half of brands (53%) and local businesses (65%) participated in co-ops in 2014 both report challenges. Those challenges include:

• Brands report local businesses have a 'lack of digital marketing knowledge'
• Local businesses say there is too much paperwork involved in co-opting ads

The study also found about 61% of local businesses prioritize digital ads over print (56%) and direct mail (53%) while big brands prioritize traditional ads like newspaper (85%) and radio (71%) over digital (69%).

Gordon Borrell, CEO, Borrell Associates said, "This is because co-op programs are out of sync with local advertisers' changing needs, particularly in the digital realm. With a few adjustments and the help of new technologies to grease the skids, brands have a big opportunity to tweak these co-op programs in a way that transforms local business partners into an incredibly sophisticated and powerful sales force."

"Up to 40 percent of co-op marketing funds earmarked by brand managers for local advertising remain unused each year," said Brendan Morrissey, CEO and co-founder, Netsertive. "It's time to revitalize co-op marketing programs with a focus on digital marketing channels, and to reinvent the broken relationship between brands and their local business partners."

Other interesting findings include:

• 62% of brands and 67% of locals rely on search/display, 46% rely on email marketing
• 73% aren't looking at mobile initiatives for their co-op dollars
• 83% of brands don't offer co-op dollars for video advertising

Image via Shutterstock

Tags: advertising, advertising trends, Borrell Associates, co-op advertising, email marketing, mobile marketing, Netsertive, search marketing

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