coop advertising best practices

COOP Advertising Best Practices

  • October 13, 2016

COOP Advertising Best Practices

New media, ROI pressures and heightened customer demands have helped drive the transformation of today’s COOP Advertising programs.

The case for COOP Advertising

Many companies encourage their agents, brokers, dealers, franchisees and other distribution partners to promote their products and services with generous local marketing allowances. Ironically, these programs built around the notion of “cooperation” can often frustrate all parties involved. Delays complicated rules and out-of-date restrictions leave some partners discouraged with what should be a true “win-win” experience. At the same time, CMOs and CFOs are pressing their own COOP Ad program managers to put more controls in place to ensure brand integrity and compliance-proof reporting.

In recent years, a series of events have created an environment where the time-honored traditions of tear sheets, one-off reimbursements and Excel spreadsheets can no longer keep pace with market realities. The emergence of new media, in-house budgetary pressures and expectations for more personal, targeted customer communications have raise the bar on what it means to succeed across all phases of marketing funds management, including COOP Ad programs, MDF (market development funds) programs and BDF (business development funds) programs.

Today, many COOP marketing managers have begun to adopt Best Practices that answer the call for improved performance, while redefining the spirit of cooperation necessary for a successful program. This integration of technology and intelligent workflow is making it easier for manufacturers, technology companies, and service providers to:

  • Simplify COOP Ad programs to increase participation
  • Eliminate paper-based claims processing
  • Target how local marketing dollars are spent
  • Make it easier for partners to execute customized campaigns
  • Measure return on investment (ROI) on COOP Ad spending

Even those who manage successful COOP programs need to revisit existing processes in response to economic pressures, technological breakthroughs, new media opportunities and more stringent reporting requirements.

Best Practice example: “We have seen a 400% increase in local advertising spending by our dealers. And this is not a one-time thing: this has happened year after year. Our dealers are advertising more, which means more people are seeing and hearing our brand message”

– Industry Leading Manufacturer

Increased New Media Spending Adds to Complexity and Challenges

New media, including social, mobile and other online ads provide partners with new ways to promote products and services. While traditional media still dominates total spend, much of the growth in advertising and marketing comes from new media. Companies should encourage partners to leverage these targeted, economical media alternatives, while keeping the following points in mind:

  • These new communication channels should be employed as additions to effective elements of the existing media mix, such as direct mail or print advertising, so they must be managed on top of efforts already in place. As a result, systems to monitor, track and reconcile branded messaging and payments must be more robust and flexible than ever before.
  • The relatively lower cost of new media makes it easier for partners to spread their advertising allowances around, increasing the number of COOP Ad claim transactions – and the associated burden on corporate operations
  • Embracing new media can also lead to new rules and guidelines. For example, some companies have requirements on the percentage of spending associated with various marketing channels.

Incorporating these new media channels into COOP Ad programs can help companies reach customers where and when they are making buying decisions.

ROI Pressures Lead to Greater Scrutiny, Heightened Reporting

COOP program managers have always been held to high standards for reporting. Compliance with FTC regulations and specific laws (e.g., the Robinson-Patman Act) require exact tracking of how every dollar is spent. With the onus on the senior management to report on the adequacy of internal controls, most firms are investing a great deal of resources on Sarbanes-Oxley compliance.

Today, COOP program managers must deal with increased pressure that has come with more data-driven mentality in marketing in addition to new FTC anti-trust regulations. Many companies now demand detailed real-time reporting on the marketing spend, as well as the results from the investments. Managers who are still relying on spreadsheets or antiquated systems are spending an inordinate amount of time gathering data, instead of managing and improving marketing programming.

Expectations Rising for End-Consumers and Partners

While technology allows companies to do more with their marketing dollars, it has also raised consumer expectations for how they receive marketing messages. Consumers are inundated with 3,000 or more advertising messages each day, and desktop publishing and low-cost digital media make it possible for the smallest companies to present themselves as polished and professional. Given the new competitive landscape, partners need to be given the tools to create more targeted, relevant marketing campaigns that stand out for the crowd.

Best Practice example:”Providing our partners with the ability to customize coop advertising materials, has truly improved communications with our end customers. Our agents are now able to stay better connected to our corporate brand identity while leveraging their local market position.”

– Leading Telecom Provider

Consumers and business have become accustomed to technology making life easier, from online retail, to electronic tool collection systems, and interactive ATMs. They understand that transactions can be simple, seamless and intuitive – and they expect the same from COOP Ad programs. Complex forms, delayed reimbursements, and manual processes will likely deter participation.

Problems experienced by distribution partners:

  • Unsure of how to use COOP Ad funds
  • Unclear of how to submit claims
  • Frustrated by reimbursement delays
  • Dissatisfied by denied claims
  • Unable to use funds for multi-vendor campaigns
  • Unwilling to tie-up funds for long duration of time
  • Incapable of responding quickly to market opportunities

These problems can impede efforts to properly channel COOP Advertising dollars to the brokers, agents and distribution partners who can best impact sales, and can, instead, be consumed by those who have best “mastered the system.”

Even people who administer outdated COOP Ad programs are discouraged by their own approaches. Conversations with marketers across the country indicate that their concerns cover a broad range of issues:

Problems experienced by corporations and COOP AD program management

  • Low utilization and participation rates
  • Inability to consistently control brand identity
  • Administrative burdens associated with approval processes
  • Inability to properly communicate program value to partners
  • Slower speed to market than desired
  • Increased pressures of compliance
  • Questionable program effectiveness and ROI

Overall, an inherently long, paper-based process to approve requests, receive invoices, review placements and reimburse partners, creates unnecessary barriers to speed, flexibility and accountability – the very qualities that corporations are looking to improve upon.

Having an automated system by itself does not always help. Poorly designed alternatives provide no links between the creation of marketing materials, the processing of payments and the tracking of results, leaving program mangers to “connect the dots” and “fill in the blanks” where necessary. The net result is that these inefficiencies diminish program success while increasing the administrative burden for all parties involved.

Best Practice strategies have helped program managers create an effective, streamlined approach to COOP Advertising programs, stepping up to the need of partners, their department and senior management.

COOP Advertising Best Practice: More effective marketing funds management

Improving the flow of funds between companies and their partners is critical for COOP Ad program success. By employing a centralized portal as a key component, manufacturers, franchisors and service companies can implement a rules-based platform that integrates program guidelines, branded creative, claims management, approvals and validation, and payment reimbursement.

With a turnkey approach to marketing funds management, progress can occur across several fronts:

Simplify program participation

Integrating program guidelines, campaign approval and reimbursement in a single transaction can eliminate barriers to adoption, increasing overall participation. Most importantly, it can accelerate reimbursement to partners who are funding approved campaigns, giving them the ability to continue successful marketing programs without undue financial hardship.

Drive operational efficiency

By eliminating off-line claim submissions, allowances can be reconciled in real-time, which minimizes administrative burdens on companies and their partners.

Increase spend effectiveness

With instant access to tracking and reporting, plans can be more easily evaluated and refined. The ability to roll-up data on virtually any criteria can provide unique insights into what messages are driving results and which segments are out performing.

Ensure compliance

End-to-end reporting enables access to information needed for management inquiries and proposal validation. When reviewing solutions providers, companies should look for a company with SAS 70 Level II certification. This auditing standard is designed to enable an independent auditor to evaluate and issue an opinion on a service organizations’ controls. Such standards can help avoid the rigors of an audit when it comes to Sarbanes-Oxley compliance.

COOP Advertising Best Practice: Rules-based marketing automation

Rules-based automation – the ability to incorporate guidelines and automatically validate that dollars are being used appropriately – can help ensure that COOP Ad partners deliver the right message to the right prospect at precisely the right time.

Real-time media fulfillment

Best-in-class systems enable distribution partners to create, produce and place ads, digital media, and direct mail in real-time.

Brand integrity protection

Rules based systems provide control over how, when, and where branded messages can be customized in local markets. Protecting brand integrity is especially important when a large number of agents, brokers and distribution outlets are creating promotions.

Market response time

Real-time marketing material customization and fulfillment allow companies to respond quickly to changing market conditions by conveying messages that are more timely, relevant and proven in their effectiveness. This approach also helps to avoid problems of claim disputes when a partner runs an outdated ad.

COOP Advertising Best Practice: Sales incentives and targeted behavior

Another best practice employed by successful COOP Ad program managers involves new ways to increase control, improve program metrics and make better decisions.

Sales activity tracking

With a centralized web portal, customer purchase activity can be linked to marketing campaigns as well as to individual sales people. Response tracking can automate this process. Secure management dashboards allow users to measure results in real-time.

Rapid measurement, analysis and refinement

By coordinating channel programs and consumer programs, ROI can be measured more effectively. Analyses of both programs can then be applied to future program rules and funding guidelines. Results can also be used by distribution partners to plan future campaign activities.

Gain a competitive advantage

An effective COOP program can go far beyond campaign reimbursement to help train, recognize and reward top performers. Working closely with partners to create differentiated marketing programming, companies can create a sense of shared purpose and encourage sales reps to look for ways to promote their products and services (versus the competition’s) when meeting with prospects.

These COOP Advertising Best Practices all share a foundation of core principles that can help companies administering COOP Ad programs, and their partners, to respond to today’s market challenges quickly and effectively. By Incorporating sophisticated yet uncomplicated systems that offer turnkey technology; partner participation can increase in tandem with corporate control, compliance and visibility into spending and ROI. Most importantly, both parties can benefit by experiencing more effective spending and accelerated business growth.

Learn more about COOP Advertising Funds Management and associated Professional Services.

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