NFIB

Stretch Your Dollars With Co-op Advertising
11/ 21/ 2003

by Steve Strauss

Q: I would like to advertise more than I do, but there never seems to be enough money. Do you have any suggestions?

Allen, Des Moines, Iowa

A: Here is an amazing option that you may not know about: It's called cooperative (co-op) advertising. Co-op advertising is a cost-sharing arrangement between a manufacturer or supplier and a retailer whereby the manufacturer pays for a retailer's ad. Why? Because the retailer agrees to mention the manufacturer's product in the ad.

Here's an example: My father had an expensive, prominent billboard for years along the San Diego Freeway in Los Angeles that said in big type: "Carpet World . . . Elegance Underfoot." And then, at the bottom of the billboard, in much smaller print, it said "Featuring Ban-Lon Carpets." Hundreds of thousands of people drove by and saw that billboard every day, and guess what? Ban-Lon paid for most of that ad. That is co-op advertising.

When a liquor store advertises a certain vodka, you can bet that the vodka manufacturer likely helped pay for the ad. When a tire store features an ad with, say, Dunlop tires, there's a good chance that Dunlop helped pay for that ad. That is co-op advertising.

Is there money available for you? You bet. It is estimated that manufacturers allot approximately $30 billion annually to help small businesses stretch their advertising dollars. The amazing thing is that, according to the Yellow Pages Publishers Association (YPPA), a significant amount of this money goes unused.

Another advantage of co-op funds is that co-op money can be used in any medium, from TV to radio to print to Yellow Pages.

Here's another example: Shear Elegance is a hair salon that has successfully used co-op advertising dollars to grow its business. By tapping into the co-op funds available from one of its major suppliers (a prominent hair care manufacturer), the shop has been able to cut its advertising costs and instead use its profits for other growth opportunities. While Shear Elegance now primarily uses co-op funds to advertise in the paper and in the phone book, the money it has saved was recently used to remodel the shop to accommodate more customers.

If you want to use co-op advertising, the first thing to do is speak with your major suppliers and ask whether they have any co-op funds available. If so, get a copy of their guidelines and be sure you understand them. Some co-op advertisers require that any ads feature only their products, while other suppliers are more flexible.

Usually, you will need to pay for the ad up front, and then, afterwards, present proof to the manufacturer that you used their products in your ad. In most circumstances, a copy of the ad as it was printed will work, but you will need a copy of the script as well as the dates and times the ads aired for radio and TV.

Here are a few other ways to get the most out of co-op advertising:

* Be sure to work with an advertising professional (either your own or from the station/paper.) The image you present is one that needs to appeal both to your customers as well as to the manufacturers who will be paying for the ad.

* You want to be sure that the name of your business is prominent in the ad. Yes, you need to mention the manufacturer's product, but after all, the ad is for your business.

* If your manufacturers or distributors do not have a co-op program, you can always try to get them to create one. The fact is, co-op advertising can help build their brand and increase their sales, so expect them to be interested.

A great resource for more information about co-op opportunities is the Co-op Source Directory (National Register Publishing, 800.521.8110).

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