Want to stretch your advertising dollar? Consider cooperative (co–op) advertising. Co–op advertising is a cost–sharing arrangement between a manufacturer and a retailer. The retailer places an ad that is partially paid for by the manufacturer in exchange for the manufacturer's product being mentioned in the ad.
For example, my father had an expensive, prominent billboard on the San Diego Freeway in Los Angeles that said in a large font "Carpet World...Elegance Underfoot." At the bottom of the billboard, in much smaller print, it said "Featuring Ban–Lon Carpets." Ban–Lon paid for most of that ad. That is co–op advertising. Similarly, when a convenience store advertises a certain product, you can bet that that company helped pay for the ad.
Collectively, manufacturers earmark approximately $30 billion annually to help small businesses stretch their advertising budgets according to the Yellow Pages Publishers Association (YPPA). Yet surprisingly, according to the YPPA, much of that money goes unused. Co–op opportunities are available in every medium, from yellow page listings to print ads to radio and TV spots.
For example, "A Cut Above", a hair salon in Portland, Oregon, has used co–op advertising to simultaneously reach more people and funnel its profits into growth activities instead of advertising. A Cut Above sells the Aveda™ product line and joined its co–op program five years ago. The salon has used Aveda's co–op money to advertise on movie theater screens, in the phone book, and in the newspaper. The subsequent increase in revenues has allowed the shop owners to expand and remodel the salon.
To start using co–op advertising, ask your suppliers what co–op programs they offer. Follow their rules carefully to be sure you get reimbursed. Some suppliers require that ads feature only their products, not any other supplier's. Others simply ask that no competing products be included.
Normally, you will need to pay for the ad up front, and for reimbursement, present proof to the supplier that you mentioned their products. For print ads, just a copy of the ad exactly as it was printed will work. If you buy TV or radio ads, you'll need a copy of the script with station affidavits of dates and times aired. You will also need to document the cost of the advertising, usually with copies of invoices from the publication or station where you ran the ad. Finally, you will need to submit a claim and your documentation. The supplier should detail their individual procedures.
Here are a few additional ideas to make the most of co–op advertising: