co-op advertising in highly regulated industries

Co-op Advertising in Highly Regulated Industries

  • May 24, 2017

Co-op Advertising in Highly Regulated Industries

Managing co-op advertising with all its forms, rules and processes can be challenging for any business. This is even harder when a company participates in a highly regulated industry. Today, we offer some advice on how to effectively manage co-op advertising in a highly regulated industry. Even if you’re not highly regulated you’ll find advice useful in most programs, so please read-on.


The foundation of a good co-op advertising program starts with clear and consistent guidelines.  Eliminate as much “grey” area as possible – to reduce the opportunity for those who want to find the loophole. Exceptions will occur – be prepared for it.

Make co-op advertising program guideline changes at a set time each year; it’s okay to publish clarifications but try to eliminate mid-year changes.

When changes are required, share them with your channel partners in advance. Make sure the date they go into effect is clear and ample warning time is provided.

Think through how you will address those cases where a more lenient policy is coming soon, but channel partners need the change now. Determine in advance if there will be a grace period for the change – some channel partners plan their materials in advance and may not be able to reasonably institute the change.

Involve all areas of the business (i.e., legal, product management, purchasing, finance and accounting, etc.) in developing co-op advertising program guidelines, not just sales and marketing.

Co-op Advertising Programs Arbitrations/Appeals

Have a clear process for appeals/arbitrations, escalations, and a clearly defined process on who makes the final decision – where the buck stops, and the timing for those decisions.

Make sure your processes are compliant and if you work with a third party make sure their processes are audited and achieve SSAE16 / SOCI compliance.

Separation of Duties

It’s important to make sure all parties are responsible for their own actions to avoid any appearance of collusion between the brand and channel partner. To do this effectively you need to make sure roles and responsibilities are clear. A third party auditor might be required, but even if they aren’t, it is still a good idea to have someone objective overseeing your co-op advertising program.

Here are some other thoughts on separating duties:

  • Require the channel partner to enter their own claims – take the sales team out of claim entry process on behalf of the channel partner to remove any possibility of collusion.
  • Consider adding internal approval levels for activities, dollar values, etc. Is it appropriate for a sales person to approve a dealer’s claim and then authorize the check?
  • Consider “auditing the auditor” – take a handful of claims each reimbursement period and perform a secondary review – your internal audit team will be impressed.
  • Let the third party be the “bad guy” when a claim is rejected. This makes it easier to maintain a relationship with your channel partners.


In highly regulated industries it will be important to show consistency. To do this you’ll need to remove favoritism and bias from your business processes. Make sure you have procedures for appeals and exceptions and can demonstrate neutrality in how those processes are conducted across your co-op advertising program – not by partner, region, VP, etc.


Provide transparency into the business process both internally and externally.  For example, deadlines, reimbursement dates, reimbursement method, date of reimbursement, confirmation of reimbursement, status of claim, etc.

Before reimbursements are issued, perform a double check – review or spot check claims and/or the suggested reimbursement/payment register – your internal audit team will be impressed.


Define a process so only those that should have access to your program … have access. If you don’t use Single Sign-On (SSO) to control logins, institute a policy where your provider:

  • Automatically inactivates users who have not accessed the co-op advertising program site in the last (X) days or months;
  • Perform a review of users who have access to business processes. Look for role changes or inactive users who should be removed.

Provide education on a quarterly basis including process changes, tool changes, lessons learned.  Track completion of education – inactivate users who do not complete education by a specific deadline.

Business units and regional leads need to ensure team members complete training or disable their ability to support co-op advertising processes (i.e., set-up funds, allocate funds, approve PA’s, approve claims).


Implement multiple levels of co-op claim review.  First level is auditing team – specialists in compliance.  Second level is channel marketing team – confirm auditors finding, monitor activity of assigned partners, review leads compliance.

Complete business control audits on a regular basis on a business unit and regional level.  Do a random sampling of records and audit processes end-to-end.  In addition, conduct spot audits on a quarterly basis focused solely on activities involving events.  These are the activities with highest risk due to attendance of Government Owned Entity (GOE) employees and provisions of amenities (meals and refreshments, entertainment, gifts, transportation, speaker fees).


Make sure participants are required to read and agree to the program terms and conditions. A good best practice is to do this directly within the system supporting co-op claims.  Don’t enable channel partner access without first agreeing to the program terms and conditions.

Repeat the terms and condition sign-off at regular intervals (program launch and significant changes). Channel partners should be signing off on terms on a program by program basis. Also, make sure terms and conditions can be accessed from multiple locations in the delivery of your program.

Operational Considerations

Implement different rules based on market type (i.e., emerging versus mature or low risk versus high risk). Build those rules into your business processes. For example, high risk market events can only take place in business venues and alcohol cannot be provided. Make sure these rules are also in your co-op advertising program guidelines (terms and conditions).

Fund Configuration

Create processes that ensure funds are set up in accordance with requirements for both the business unit and geographic regions. For example, have unique regional approvers and administrators.

Integrate controls into your business processes. For example, when setting up a fund require countries and business units supported be specified. Integrate accounting information – accounting codes or PO information – into fund setup.

Require approval of fund setup by your Finance department to ensure compliance with internal budget controls.  Conduct an annual review of options and parameters available in the funding program. For example, brands, activity types, and business units.

Integrate program rules into business processes

Instead of users uploading spreadsheets and other documents to support claims, integrate online forms to capture the information. Responses can then be programmatically validated to ensure consistency and the input can be used to enable better reporting on metrics and compliance.

Configure forms supporting business processes to request relevant information based on fund, business unit, geography and activity type. For example:

  • Proof of Performance (PoP): Communicate to channel partners throughout process the specific PoP required at claim submission. This should be based on the type of activity. For example, a copy of a call script or guide for telemarketing, or a copy of an agenda for a customer conference.
  • For events, have channel partners complete an event certification stating compliance with certain rules. Provide information on venue location, country in which event is taking place (if not country in which funds were allocated), how event passes were distributed and to whom they were provided.
  • For amenities (tied to country, reimbursement % and activity type) require channel partners explicitly state expenses incurred for certain categories (i.e., meals and refreshments, entertainment, gifts, transportation, speaker fees). Have per-person and per-activity amenities limits, which are stated in Terms and Conditions of your co-op advertising program.
  • For Government Owned Entity (GOE) Employee Certification (tied to activity type selected), require channel partners complete annual education regarding rules for selling and interacting with GOE employees.

We hope we’ve provided some good food for thought into the needs of businesses processes related to co-op advertising. To learn more about 360insights’ market development funds management platform or related professional services visit our solution page or request a walk-through and Q&A session.

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