- Language: English
- 162 Pages
- Published: May 2012
- Region: United States
Online Co-Op Advertising
- Published: May 2012
- Region: Global, United States
- 42 Pages
- Borrell Associates Inc
This 36-page report from Borrell Associates details the nuances of co-op advertising and includes the results of a survey in March and April 2012 of 1,354 SMBs regarding their participation in co-op programs. It examines how much is available through these programs – an estimated $22.4 billion – and the reasons that local merchants don’t snap up all of it.
The first chapter dissects how the programs work and who’s using them. The second chapter takes a deep dive into the $1.7 billion available in online co-op and the estimate that $450 million seems to be left on the table for lack of participation. There are seven charts, tables and graphics in the report, and Appendix A includes more than 20 additional charts complete results of our survey. Appendix B offers a detailed explanation of how co-op programs work, compliments of the Local Search Association (formerly the Yellow Pages Publishers Association). Appendix C is a list of 175 brands that offer co-op programs to local merchants.
CHAPTER I: A $22 Billion opportunity
Fig.1.1: How Co-op Advertising Works
Fig.1.2: Use of Co-op Advertising
Fig.1.3: Reasons Co-op Ad Program No Longer Used
Fig.1.4: Number of Co-op Ad Programs in Use
Fig.1.5: Co-op Use by Media Choice
CHAPTER II: Co-op Goes DiGitAl
Fig.2.1: Percent of Online Ad Budget Spent for Co-op Credit
Fig.2.2: Co-op Supported Online Ad Spending
APPENDIX A: Co-Op Advertising Survey: Full Results
APPENDIX B: Compliments of the Local Search Association
APPENDIX C: Partial List of Manufacturers Offering Co-Op to Local Retailers
In the world of marketing, co-op programs are strange animals. They are responsible for the Nike swoosh in the local shoe store’s newspaper ad or the mention of Yamaha in the local motorcycle dealer’s radio spot. They aren’t paid for by money, but they are responsible for spurring billions of dollars of local advertising.
And they could be responsible for as much as 9 percent of all expenditures, except for one small fact: retailers wind up leaving about one-fourth of it on the table – to the tune of about $6 billion. That represents a huge opportunity for ad agencies and media companies struggling to overcome retailers’ most nagging excuse for not advertising, “I can’t afford it.”
As with everything involving media these days, the word “digital” is oozing into the landscape. Of the estimated $22. 4 billion in available co-op funding this year, we estimate that $1.7 billion is being waved around for online purchases. It’s a recent phenomenon. Manufacturers have begun offering credit to local small and medium businesses (SMBs) for not only banner ads and search advertising, but also website development. Still, we estimate that $450 million will be left on the table this year by retailers who are either unaware of digital co-op programs or just don’t want to bother applying for the credit. As one digital seller told us, “The amount out there is crazy.” To get a clearer picture of the landscape, we surveyed 1,354 SMBs in March and April. We found that 30 percent of the businesses use some form of co-op – or put a different way, 70 percent do not. Sixteen percent didn’t even know what it was.
This report details what’s happening with co-op programs and takes a deep dive into that $1.7 billion available for digital marketing. With the emphasis on social programming and the need to drive national brands down into local word-of-mouth marketing, we expect the online portion of co-op to swell in the coming years.
It represents one of the more interesting – and generally untapped – gold mines in the digital space.