Local Digital Co-op Marketing 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 marketing funds and programs. However, many stars have to align and proper and painstaking calculations have to be made before a large organization deploys a community-focused marketing program.
According to a study by BIA/Kelsey and MediaMax Network, in 2017 national brands invested $63 billion in local Co-op marketing Funds.
Sounds too cumbersome, doesn’t it?
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 marketing 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 to newer, more relevant, and proven effective marketing strategies.
Tactic-by-Tactic Imbalance of Co-op Spending and 2016 Effectiveness
As you can see in the graph above, events are one of the most effective forms of marketing by 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 where a brand needs to provide their partners local Co-op marketing funds to take advantage of the powers 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 digital marketing. 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. 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 based on their geographical location. Nevertheless, it appears that 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
Local 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 who 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 business usually lack.
Biggest Digital Marketing Challenges For Local Businesses
The digital landscape is constantly changing. With a steady stream of digital platforms entering the world of consumer media, 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 as well as recalculate their marketing budget in order to provide digital local Co-op marketing 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 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 marketing funds saw a 5% increase from 2016 to 2017 and forecasts 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
Owning the Local Digital Market
Nobody said change was easy. As it is, keeping a Co-op program running is a monumental task, on the other hand, adapting to a new style of Co-op marketing is a beast of its own. No one is expecting a brand to change their 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 improve your Co-op marketing tactics in order to support your local channel partners in today’s ever-evolving marketing space:
- 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. This way 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 easy 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
- Mix-media functionality.
CMR’s Co-op Management Application:
Computer Market Research’s Co-op/MDF application provides unmatched visibility on channel spending for improved ROI. Our Co-op Management tool enables you to operate your Co-op programs on a global and local scale. Co-op solutions are entirely configurable so that channel management teams can build and deploy their own marketing programs that support their unique program guidelines.