Cooperative advertising has become in the recent years a powerful tool for many marketers. Even so, not everybody has heard about it or knows how to use it. For this reason, today we will present you with a definition, examples and pros and cons of this type of advertising.
Cooperative Advertising Definition
This type of marketing refers to an agreement that is sealed between a manufacturer and a distributor/retailer or wholesaler. It can also be made between 2 or more marketers that have complementary products. In the first case, the manufacturer either contributes with a fixed sum or shares a percentage of the promotion costs of the other members. In the second case, the marketers sell or promote each other’s products together with their own. This procedure is also called co-marketing.
One of the examples of cooperative advertising is a manufacturer supplying the retailer with graphics (or photos) that they can use in an ad. They can even provide the ad itself, which can later be used for TV, radio or print. The manufacturer can contribute to the advertising campaign either with promo materials, money or point-of-purchase displays.
Another example would be the advertising that is sponsored by shopping centers or districts. There you will find an advertisement from each retailer found in the shopping center. The promos are often featured in newspapers on special occasions, such as Fourth of July, St. Valentine’s Day, Father’s Day, Mother’s Day etc.
Cooperative Advertising Pros
- Cutting Costs
Perhaps the biggest advantage this strategy has for small business owners is the fact that it dramatically cuts costs. Manufacturers usually offer 50 to 100% of the costs for placing ads locally or using flyer advertising, for instance. This enables them to create their brand and make themselves known to people much easier than it would normally be.
- Creative Guidance
Yet another good thing about co-marketing is the fact that small business owners have the chance of getting some creative guidance from large manufacturers. They can help with refining the message, as well as the look of the ads. Moreover, they know how to place the ad better so that they can both take advantage of this.
- Varied Demands
The demands for such an agreement differ from manufacturer to manufacturer. For a small business, it may turn out to be hard to adapt to certain requirements, such as a specific level of quality, a certain budget etc.
- Hidden Requirements
Besides being varied, manufacturers can also impose hidden requirements. As a beginner in business, you may not be aware of all the conditions under which you sign the cooperative advertising agreement. For this reason, you should always consult a lawyer before signing it.
Cooperative advertising is a great tool for small businesses to market themselves. Associating with a large manufacturer helps them build their brand and make people hear about them faster. Moreover, the reason why many of them choose this type of advertising is the fact that it helps them cut costs. Even so, you should pay attention to the clauses of the agreement. If you’re not sure, it’s always best to consult with a lawyer beforehand.
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