Co-Op Ad Programs Should Audit All Pre-Approvals
As a best practice, we recommend 100% of pre-approvals be audited across all Co-Op ad programs. Co-Op pre-approvals are usually conducted by brand management, consume time, and are costly. It’s natural to want to avoid them, but you do so at your own peril. No set of online forms will offset the benefits of auditing pre-approval claims in your Co-Op ad programs.
Co-Op pre-approvals emerged in Co-Op ad programs as a method to ensure partners did not get significantly out-of-pocket and then get the unpleasant surprise of a rejected claim. Having the partner describe their Co-Op proposal prior to investment eliminates the majority of this concern. This approach addressed the partner’s biggest concern, but the brand assumes 100% of the cost of Co-Op audits. Why are audits in the brand’s interest?
Co-Op Ad Pre-Approvals Protect Brand Identity
As a brand manager your job is to build brand presence in the marketplace. You take great care in making sure every ad and collateral is on message and images portray the brand in the best light. If you are going to get partners to assist with building brand you need to ensure they are on message and using the latest imaging.
Partners don’t share the same concerns as brand managers. They want to associate their company with the brand to boost their market credibility and increase revenue. They pay little thought to the brand’s message or imaging. They’ll likely read co-op ad program guidelines and do the minimum possible to comply.
The Co-Op pre-approval audit ensures nothing slips through the cracks. Even the best guidelines will have some holes. Partners may also think they are complying only to find out later they used out of date logos, images, or messaging. Protecting your brand identity with pre-approval audits just makes sense to ensure brand integrity in all CO-OP ad programs.
Audits in Co-Op Ad Programs are an Opportunity to Engage Partners & Encourage Participation
Industry analysts cite getting funds used by partners as the biggest challenge to overcome with Co-Op ad programs. The last thing you want is for your partners to see the pre-approval audit as a burrier. Partners won’t willingly engage in the pre-approval process if they see it as the “brand police.” If they feel that’s the role of a Co-Op audit, expect to have a significant challenge getting engagement in the program.
As a brand manager, you need to make sure your Co-Op ad programs pre-approval process is easy, and ideally seen as value-add for the partner. You want to make sure you’re communicating that it protects the partner from a reimbursement decline and reduces cycle time.
You also want to use the pre-approval audit as an opportunity to educate partners on how to do more effective marketing. You might want to build into the process the ability to deny with comments or approve with recommendations. Both methods provide the brand manager an opportunity to suggest improvements to the partner. If you’re helping partners market more effectively they will see the audit as a value-add.
CO-OP Ad Pre-Approval Audits Reduce Compliance Risk
Transactions that move money from one company to another come under the most scrutiny when it comes to regulatory compliance. This is especially true when transactions are non-traditional (not an invoice for goods or service rendered). Creating an audit trail showing both sides agreed upon the transaction prior to its commencement reduces compliance risk.
Transactions conducted in your Co-Op ad programs are like any other financial transaction. Two parties agree upon the terms of a transaction (program guidelines and creative approval) where one party offers good or services (in this case co-branded marketing) creating value for the other party in return for compensation (Co-Op reimbursement). The pre-approval audit ensures the transaction meets all of these requirements prior to commencement. The claim audit ensure the transaction followed the agreement. If both are met there is no compliance risk in moving the money.
Pre-Approvals reduce non-compliant activities and confusion when other participating partners have line of site to non-compliance situations in the marketplace. They significantly reduce claim denials, offer an opportunity to engage and educate partners, and minimize compliance risk. This is why we recommend every Co-Op advertising transaction have a pre-approval audit.
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