Digital Co-op Advertising Funds May Seem Uneconomical for a Vendor, but the Results Tell another Story.
Small businesses have always thrived on the patronage of their local customers. As a member of a community, small business owners see their community more than a canvas for cultivating a marketing scheme. Smaller business owners know that in order to see any favorable and profitable results they need to immerse themselves in their community. As global and national bands make their way into smaller local niches, they are realizing the importance of generating and implementing local Co-op advertising funds and programs.
However, many stars have to align, proper and painstaking calculations have to be made before a large organization deploys a community-focused marketing program.
Sounds too cumbersome, doesn’t it?
According to a study by BIA/Kelsey and MediaMax Network, in 2017 national brands invested $63 billion in local Co-op Advertising Funds.
Don’t jump to conclusions yet. You’ll be surprised to see the results for brands that have taken the route of localized digital channel marketing by providing their partners local Co-op Advertising funds.
Current State of Channel Marketing Programs
According to a Manta and the LSA survey, 43% of U.S. small businesses sell national brands that potentially qualify for co-op funds.
The secret to profitable channel marketing is knowing when to dump or tweak the marketing programs that have stopped working or have never produced optimal results. At this point, a channel manager should consider adapting newer, more relevant, and proven effective .
Tactic-by-Tactic Imbalance of Co-op Spending and 2016 Effectiveness
In the graph above, events are one of the most effective forms of marketing for local businesses. Interacting on a face-to-face level with current and potential customers, although more expensive, continues to produce the best results.
However, marketing after an event plays a big role in the success of an event. This is a time where a brand needs to provide its partners’ local Co-op advertising funds to take advantage of:
- social media advertising and promotions
- geographical display advertising
- email marketing
- and other forms of digital marketing
It’s interesting to note; when businesses in the Brandmuscle survey were asked what media outlet they use for promoting their business; only 47% said they used print advertising and 83% said they use digital marketing.
Initially, national brands were reluctant to allocate any funds for . The inability to monitor digital campaigns outside their already employed systems and losing administrative power over their brand identity forced many brands to keep digital marketing at bay.
These days, search engines such as Google are consumers’ gateway to online shopping. Therefore, If your business does not have a strong online presence, you are losing out on this vast local cyber marketplace.
A survey by Infusionsoft and LeadPages reports that the goal of 51% of small businesses for using digital marketing is to drive sales and 43% for brand awareness. Strategies and platforms used for achieving these goals differ for each local business. Nevertheless, it appears that the use of websites, emails, and other forms of digital marketing are the top 3 most utilized forms of digital advertising.
Studies show that between 70-80% of people research a company online before visiting the small business or making a purchase with them.
Platforms Local Businesses Are Investing in for Digital Marketing
Digital Marketing Challenges
Changes in consumers’ media use and buying habits, combined with the boom in mobile local search queries, have made investment in digital and mobile marketing top priorities for marketing managers.
However, digital marketing tactics are still underutilized by local businesses and national brands. Businesses that are using digital marketing for running local campaigns don’t always fully comprehend the complexity and attentiveness such campaigns demand. With all the responsibilities associated with operating a business, local merchants have little to no time left for learning, properly executing, and monitoring digital campaigns. Executing a digital marketing campaign demands time and money two things small businesses usually lack.
Biggest Digital Marketing Challenges For Local Businesses
The digital landscape is constantly changing. A steady stream of digital platforms enters the world of consumer media every day. As a result, it’s become exasperating for small businesses to learn the tactics for running a campaign on the newest and most prominent platform.
As market trends change and consumers shift more towards a paperless lifestyle, brands need to consider new Co-op programs. At the same time, these brands need to recalculate their marketing budget in order to provide their partners with digital advertising funds. It’s time for a change in channel marketing program designs. In addition, to take advantage of digital channels, brands need to help local businesses by providing a more advanced form of digital marketing.
Time for Co-op Advertising Funds Campaigns to Meet Digital Campaigns
Never in the history of channel marketing adhering to local markets has been as important as it is right now. The increasing use of mobile technology has highlighted the importance of meeting consumers at a local level during decision-making. According to BIA Kelsey, local Co-op advertising funds saw a 5% increase from 2016 to 2017 and forecast an average of 5% increase each year for the next 4 years.
Brands are slowly seeing the effects of local and digital marketing and the importance of capitalizing on local marketing opportunities.
2017 U.S. Local Advertising Revenues – $148.8 Billion
Using Co-op Advertising Funds to Own the Local Digital Market
Nobody said change was easy. As it is, keeping a Co-op program running is a large task. On the other hand, adapting to a new style of Co-op advertising is a beast of its own. No one is expecting a brand to change its entire marketing program overnight. But, if you want to be in front of today’s consumers you need to get off the wagon and catch a ride on a new sports car!
Here are a few ways to use your Co-op advertising funds in order to support your local channel partners:
- Unless yellow pages, newspapers, and other forms of print advertisements are providing your brand with a great ROI, consider eliminating or reducing your Co-op funding for these marketing tactics.
- Provide continues education on digital trends and their value propositions affecting the local marketplace.
- Communicate with your partners on a regular basis to understand their pain points. As a result of communication, you can design Co-op programs that align with your partners’ local marketing needs.
- Pick a platform and tactics that suit your business model and channel partners.
- Define the marketplace where your partners do business. Pay attention to successful strategies your partners have used. Choose a digital platform that is suitable for that marketplace.
- Don’t jump in with both feet. Have a trial run by utilizing one digital marketing tactic at a time.
- Offer your partners co-branded marketing materials.
- Share the cost of local marketing campaigns with partners.
- Because Co-op by nature is a local form of advertising, brands need to find a local Co-op marketing expert to serve as a resource to local sales reps.
- Measure your co-op performance in real-time. CMR’s Co-op management solution offers real-time access to all your channel’s marketing activities and Co-op revenue performance.
- Invest in resources to help your partner market more effectively. Make sure the tool you provide your channel partners has the capabilities to:
- Track conversions
- Measure and analyze audiences
- Ad campaign reporting
- Ad effectiveness reporting
- Market intelligence
- Optimization
- Mix-media functionality.
CMR’s Co-op Management Application:
Computer Market Research’s Co-op/MDF application provides visibility into channel spending for improved ROI. Our Co-op Management module enables you to operate your Co-op programs on a global and local scale. Our Co-op solution is entirely configurable so that channel management teams can build and deploy their own marketing programs that support their unique program guidelines.
Features and Benefits of Computer Market Research’s Co-op Management Solution:
Benefits
- Easily configurable
- Expedites approval process
- Easily identifies new marketing opportunities based on partner performance
- Increases partner satisfaction
- Reduces program costs
- Optimizes fund allocation
- Improves tracking and monitoring of account usage by setting up annual or quarterly budgets
- Includes multiple security levels
Features
- Up-to-date information on balances, prior approvals, claims, and check requests.
- Closed-loop analytics
- A three-tier architecture provides connectivity to any ODBC compliant database.
- Supports accrual and flexible funding models
- Password security ensures confidentiality and controlled access.
- Tracks marketing funds by customer, territory, or fund type including shows, ads, and training.