A Tale of 2 Marketers: Tackling the Mythical Beast of Successful Co-Op Marketing

December 3, 2014 Deb Griffith

co-op marketing funds management

“It was the best of times, it was the worst of times…” is a phrase that could be easily used to describe the ongoing struggle for anyone who has tried to implement a co-op marketing funds program.  

Whether you are a large brand or a small business that sells a brand’s product, chances are you have lamented the difficulties and challenges of successful co-marketing -- especially when it comes to reconciling the funding behind it.

So what ends up happening? Inertia. In fact, of an estimated US annual co-op budget of $22 billion dollars on small businesses, $6 billion of that goes unspent every year.1 That’s a lot of money left on the table.

Why Such Discord in Co-op Marketing?

The concept seems great -- partnering a product manufacturer with a local sales outlet to share resources and funds, streamlining the marketing process for everyone. But there can be a grim reality lurking beneath the surface:

Downside for the SMBs:

  • Complexity of participation in different program structures for different manufacturers
  • Cash out of pocket for long periods of time for the marketing campaigns until reimbursement is provided by the brand
  • The brand-provided messaging might be more aligned with brand needs than the SMB’s

Downside for the Brands:

  • Low participation from the channel partners (especially when the 3 issues listed above are present)
  • Inability to track engagement on different campaigns and their relationship to one another.
  • A feeling of being “forced” to offer co-op funds -- just because their competition does
  • Difficulty in influencing the SMB decision makers, who are strapped for time, money and lack expertise.

The result? Channel members are not engaged, and not using the tools brands have invested in for partners. Brands don’t understand how the money is performing. And the biggest tell-tale sign? Billions of dollars of co-op going unused each year.

The Magic Bullet

Believe it or not -- there is actually a way to eliminate nearly all of these issues -- for both brand level and local level marketers.

Transformative shifts in technology and marketing ecosystems over the past ten years have yielded an alternative approach to legacy co-op programs -- an automated, co-pay management platform.

Digitizing marketing assets, orders and funds management has all enabled technology to scale, increase speed to market and improve the co-op model by creating a single portal to apply and manage all these moving parts. From previewing creative designs, to automated customization and order fulfillment to (most importantly) application of shared funds at the point of order. The automated platform saves the day.

Upside for the SMBs:

  • Co-op funds applied at time of order, saving upfront costs and annoying reimbursement forms.
  • Creative assets can be easily reviewed and selected for participation
  • Easy-to-navigate portal replaces manuals and checklists system

Upside for the Brands:

  • Increased channel partner participation means more cost efficiencies and reach
  • Brands no longer need to hire several employees to manage fund processing and approvals
  • Brands now can avoid confrontations if they refuse to pay for unapproved marketing “after the fact”
  • Real time tracking to see spend and performance. Since the marketing execution is controlled in the platform, analytics can easily flow back to finally give brands visibility into performace
  • Brands have real time data regarding partner enrollment and applied spends

One More Thing

The best automated co-op marketing platforms can help brands transition from an existing reimbursement model so as not to upset the existing system abruptly.  This phased roll out can help keep existing programs in place while onboarding key channel partners who are eager to participate in the improved solution.

These blended platforms allow for phasing into a co-pay model over time as new programs are added and partners can be transitioned into the new system when they are ready.  And the brands don’t have to manage (and pay for) 2 separate and disjointed co-op fund management programs.

Isn’t it time to take your co-op marketing to a better place?  

1 -- Borrell Associates, 2012

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Advancements in marketing systems over the last decade have yielded an alternative to legacy co-op programs - an automated, co-pay management platform.

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