Business information written specifically for newspaper advertising departments

Cooperative Advertising

Help your local dealerships see the benefits of co-op advertising, and the complaint of not having enough advertising budget goes away.

Cooperative advertising, or co-op advertising, is a partnership between the manufacturer and a local dealership, where the manufacturer shares the cost of locally placed advertising with the dealership. Many manufacturers have an allocated budget for this type of advertising, which is available each year to dealerships that participate and comply with their specific marketing requirements. These requirements usually dictate the use of logos and messages. Help your local dealerships see the benefits of co-op advertising, and the complaint of not having enough advertising budget goes away.

Co-op advertising extends to all walks of advertising: from traditional print and online to email blasts and in-store promotional materials. People often overlook the digital avenue when allocating their co-op dollars, as Ralph Paglia, Courtesy Chevrolet’s CRM/eBusiness director, points out in his article “Take a Free Ride.” According to Paglia, manufacturers report that much of their co-op advertising budget goes unspent each year, relatively few dealerships take full advantage of these programs. “Many dealers are not aware that co-op advertising reimbursements are available not only for traditional media, but for digital marketing as well,” Paglia explained.

Many dealers are not aware that co-op advertising reimbursements are available not only for traditional media, but for digital marketing as well"

However, Paglia’s company utilizes an online cooperative advertising management strategy and has seen tremendous results, stating that they’ve generated higher closing ratios and a lower cost per sale. He also stated that the co-op reimbursement program increases the quantity and quality of their digital advertising, allowing them to spend less on design and production — the use of original equipment manufacturer (OEM) branding, images and messages ensures program compliance and more professional- looking ads.

Co-op plans are only available to authorized dealers. Encourage local dealers to contact their manufacturer and enroll in their co-op program. From there, any advertising that dealership places in your paper (be it in print or online) can be partially paid for by the manufacturer. This is a win- win situation for both involved. You can ensure more ads and dealers can reduce their advertising costs.

There are a few standard guidelines that dealers should be aware of before entering into a co-op partnership. Along with reviewing each OEM’s marketing requirements, be sure the dealer knows that it’s always a good idea to obtain pre-approval before placing an ad. This way, a dealership can ensure that the ad meets all required specifications, that they will get reimbursed, and that they get paid quickly. Simply email or fax the ad to the manufacturer, and they will respond with any necessary changes.

So how does advertising get paid for? While there are multiple types of co-op programs, in most cases it’s done through reimbursement. This means that the dealerships pays for the ad, issues a claim and then the manufacturer reimburses the claim. Dealerships will have to issue their claim by the end of the claim period, which is usually 60 or 90 days, depending on the co-op plan. There are different forms of reimbursement — either a check, a product or a credit memo. Remind dealers to find out what form of reimbursement their company offers, so they know what to expect.

Remember, dealerships and dealership service departments have separate co-op budgets. 

Remember, dealerships and dealership service departments have separate co-op budgets. While dealerships may be aware of exactly what their manufacturer offers per car, they may not be so savvy on the service end. Help them see both sides of the equation. Also, any independent repair shop or quick lube may also qualify co-op ad dollars when promoting brands, like Pennzoil, Quaker State, etc.

If your local dealerships aren’t using co-op advertising in either digital or print marketing, help them find out how to take advantage of it. Before meeting with them, research what co-op programs their manufacturers offer and how they can spend less on advertising, while you get more ads.


CO-OP GUIDELINES EXAMPLE: SUZUKI

CO-OP YEAR:The 2011 co-op year will end on September 30, 2011. Advertisers will have a 60-day grace period for submitting claims.

Fund generation:dealers will earn 1.5 percent of dealer net monthly for 2011 models invoiced to their dealership.

Reimbursement:Suzuki will reimburse 60 percent of approved advertising, up to the amount of available co-op funds. The reimbursement is applied to dealer’s Parts Account in the form of a credit. Suzuki encourages pre-approval to ensure reimbursement.

AD CONTENT & REQUIREMENTS:

  1. Only new and unsold Suzuki motorcycles, scooters and/or Quadrunner ATvs may be featured. Ads can not include or mention competitive brands, other products or used vehicles.
  2. Suzuki parts, accessories and service may be included in the ad.
  3. The ad must contain the current Suzuki logo, which must be larger than or equal to the dealer name and/or logo.
  4. All Quadrunner ATV or Motorcycle advertising that lists features, displays vehicles in action, or describes them with action words, must include proper safety messages.
  5. Ads must include a visual representation, in the form of line art or photography.   
  6. Ads should mention the brand name before the model.
  7. Advertised price must be the MSRP for the current model year products. Monthly payments are acceptable. you may not advertise the MSRP with a save or rebate offer next to it, but phrases like “discounts available” or “call dealer for lowest price” are acceptable. you may advertise a save or rebate offer separately, as long as the MSRP is not included. The MSRP is not required for non-current products.
  8. Ads that with phrasing that claims the dealer is the “largest,” “#1,” has the “highest volume,” is subject to verification.
  9. Only English-language advertising is eligible.
  10. Production costs (i.e., designers) are not eligible for co-op funds, unless otherwise noted or approved by Suzuki.

NEWSPAPER AD CONTENT NOTES:The ad must contain the current Suzuki logo equal to or larger than the dealership, with the appropriate safety message and image of the product. Exception: ads less than 1”x1” or 1/12 page do no require product illustration or use of current Suzuki logo.