Selling More With Coop Advertising What Is COOP

Selling More With Co-op Advertising

What Is CO-OP? Cooperative advertising (CO-OP advertising) is an arrangement between a manufacturer and a retailer to reimburse the retailer for local placement of manufacturer brand product advertising. With funding based on purchase volume, this advertising promotion focuses on the manufacturer’s brand-name product for sale in the marketplace and includes the retailer’s local information.

Brands have Dealer Marketing Options

Unused CO-OP: Money Down the Drain $100 Billion The approximate total of co-op dollars that are available to retailers like yours every year. $11 Billion The approximate amount of co-op funds that go unused each year. B & K Mueller offers up to 100% reimbursement on their plumbing equipment ads! How much money is YOUR market flushing away?

Steps to Succeeding with CO-OP 1. CO-OP Advertising Research Investigate retail brand name products for any available trade promotion arrangements and provide plan details.

Steps to Succeeding with CO-OP 2. Brand Advertising Opportunities Provide local dealers with media advertising promotions for the product lines they carry to capitalize on the manufacturer’s national programs, tailor any proposal documentation, and investigate available funding information*.

Steps to Succeeding with CO-OP 3. Advertising Approval Service Produce finished cost outlines and display advertising materials for approval under the brand guidelines by manufacturer CO-OP services to make certain of approved dealer promotion.

Steps to Succeeding with CO-OP 4. CO-OP Claim Documentation Supply local dealers with an invoice and documentation claim submission package as proof-of-performance to qualify under CO-OP guidelines and ensure their reimbursement.

CO-OP applies to everything you sell… Mobile On air Online

CO-OP is many things to many people Also known as channel marketing, sales promotion allocations, advertising allowances, market development funding, etc. Manufacturer/Distributor Media Retailer

CO-OP Accrual Money earned by a retailer for advertising; usually based on a percentage of purchases from a brand manufacturer. Manufacturer: 2% accrual Your Purchases: $100, 000 of sprockets Your Accrual Balance: $100, 000 x 2% = $2, 000

Participation/Reimbursement: Percentage of advertising that a manufacturer will reimburse, reimburse provided the retailer has sufficient accruals to cover that cost and ads meets manufacturer guidelines. Mfr Participation Rate: 50% Dealer Accrual Balance: $2, 000 Cost of Local Ads: $4, 000 Manufacturer Contribution: $4, 000 x 50% = $2, 000

CO-OP Timing Accrual Period: When CO-OP is Earned The period of time set by the manufacturer when purchases earn accruals. This could be current year, prior year, six-month periods, or rolling timeframes. Performance Period: When CO-OP Must Be Spent The period of time when a retailer must run co-op to qualify for reimbursement. This may vary from the accrual period.

Formal CO-OP Plan The Manufacturer has standard, pre-set: • Accrual & reimbursement structures • Specific creative media guidelines to locally promote the brand. Hickey Freeman has a “formal plan” for their Formal Suits. It’s 3% accrual and 50% reimbursement.

Specially Arranged CO-OP Plan • No pre-set accrual funds or guidelines and is arranged with local MFR sales rep. • Negotiated on the strength of the media proposal and sales potential. • Be able to show MFR how you can help push their product and move more inventory with the campaign. These are commission-based sales people. They make more when they sell more. They’ll sell more when stores promote more. Those stores will promote more when YOU make it easy for them.

No CO-OP Plan • The manufacturer simply has nothing established and can be deal based. • The right idea for the right retailer can find the right resources! • Create unique co-branding options with multiple media channels covering the local consumer product market. Think about partnerships businesses forge on a daily basis. Realtors and Mortgage lenders is a perfect example!

Typical Accrual CO-OP Workflow Start Research Co-op Guidelines Store Audit of Top Brands Identify Sales Volume Formal Co-op Plan No Co-Op Plan Yes Research available $$$ Contact MFR Sales Rep Directly Specially. Arranged Co -Op Plan Note Contacts & #’s Contact MFRs : Query co-op assistance Standard Ad Process Run Ad Campaign and pay for ads Tally Accruals for Ad Budget Provide MFR Co -op Claim Reimbursement Documentation Create Ads that Meet Guidelines Does volume warrant assistance? No Focus on the Money Yes Develop Brand Proposal Send ads to MFR for Approval End

Where to Find CO-OP Brand Dealer Locators Tell you which stores are important to the brand’s overall business.

Where to Find Co-Op • What Brands does this store do the most business with? • Where do they buy products? • Which MFR reps do they have the best relationship with? Nature’s Bounty Vitamins offers a specially arranged co-op plan through their MFR Sales Rep. It’s a good idea to keep Mfr sales reps informed of dealer ad campaigns. They might be able to find additional marketing funding and resources.

Where to Find CO-OP Signage & Displays Tell you which brands are important to the store’s overall business.

Intelligent CO-OP Strategy Start Review Co-op Guidelines Review Store’s Top Brands Guess at Sales Volume Focus on the Advertising Yes Contact MFR; Confirm Co-op $$$ Build Ad Options Build Specific Dealer Proposal Dealer Open to Brand Advertising Campaign? Dealer Contact MFR Sales Rep Standard Ad Process Tally Budget for Ad Campaign Confirm Ads Meet Co-op Guidelines Is Dealer Interested in Promotion? No Run Ad Campaign and Invoice Client Yes Confirm Schedule with Dealer Provide Complete Claim Documentation for Dealer Reimbursement End

Review CO-OP Plan Structure MFR Guidelines and Contacts… Accrual based on 2% of Purchases. Co-op Allocation based on previous year’s purchases. 50% Reimbursement for Print. 75% Reimbursement for MFR templated ads. Digital advertising must be approved by MFR contact. WE SORT THROUGH THE CLUTTER Prior approval always required. SO YOU DON’T HAVE TO! MFR will reimburse 50% for Newspaper Print, 65% for Direct Mail, and 75% for any Video Broadcast performance. MFR Offers a 12 -Month Rolling accrual based plan ensuring co-op opportunity at all stages of retail inventory availability. Co-op pays only for direct media placement costs. MFR offers a tiered co-op allocation program based on certain volume levels. No carry-over of expired co-op funding past the plan closing date. Dealer MUST supply a co-op claim for media activity within 90 days of ad performance beyond which claims will not be paid.

Sample Co-op Plan

Sort Through Ad Guidelines MFR Brand Compliance Rules… Product name must be included in ad. No competing products. Several lines of descriptive copy must be included. Ad may not be longer than 30 seconds. WE SORT THROUGH THE CLUTTER Prior approval always required. SO YOU DON’T HAVE TO! MFR products must be identified by their full name & properly trademarked. Size of space devoted to MFR offer must be equal to or greater than the space devoted to additional customer offers or competitive brand offers. No pay production, agency fees. Include one talking point or one MFR brand promotional message. Make no claims MFR does not make. MFR offers must be encapsulated with borders. MFR Mascot must be placed within a section of the ad which is dedicated only to MFR content. Primary MFR logo required.

Talk About CO-OP With Clients Mr. Dealer, About This Brand…? How much of this do you sell? Do you use your CO-OP Funding? Who handles the CO-OP details in your advertising? Have you had many problems with your CO-OP reimbursement? Does the Mfr Sales Rep explain the CO-OP availabilities? How much time is involved in sorting this out? WE HAVE PEOPLE TO HELP WITH THIS Who keeps track of CO-OP? SO YOU DON’T HAVE TO! Have you ever had any CO-OP claim denied? Is gathering the CO-OP Proof-Of. Performance an issue? How does the Mfr help you with advertising? Do they include your store in regional sales promotions? Have you ever let your co-op money expire at the end of the term? Do you promote this brand? Does the Mfr have an advertising portal to give you brand material support? Again…how much of this do you sell?

CO-OP Radio

CO-OP Mobile Co-Branded Display • Still in its infancy for mfr support to its local channel partners. • More so than online, options with mobile are handled on a case-bycase basis with a lot of scrutiny.

Present your CO-OP schedule Brand X Dealer Promotion Develop CO-OP Campaigns • Show the options to maximize visibility to your isteners/viewership. • Outline the investments along with the CO-OP support. + =?

CO-OP Compliance Services Prior Approval is KEY! Ad meets specifications Dealer will be reimbursed Payment expedited Pre-Approval Comes in Different Forms Once the client made all of their changes, reach out to the manufacturer contact for CO-OP approval. Send ad for manufacturer brand review. They will send it back with any necessary changes or a Prior Approval confirmation.

CO-OP Claim Documentation Mfr. claim address & contact info Retailer address & contact info Advertising date & cost information Retailer reimbursement

Provide Affidavit/Proof of Performance With Detailed Documentation

Find CO-OP Solutions thru RAB

CO-OP Advertising is NOT something else to sell. It’s a way to sell…more.