The strengths and limits of co-op advertising

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Adams Hudson in his book Contractor Marketing Secrets has caused me to rethink about how and when contractors use co-op advertising in their marketing initiatives.

Hudson says co-op programs, where manufacturers and vendors can contribute upwards of 50 per cent of the cost of your advertising, are usually false economy.  He says effectively your ads promote the manufacturers’ image not your own business (and they fail to distinguish you from your competitors).

Hudson says most contractors’ advertising is crappy and the technical/production quality of the co-op ads are much better but they don’t sell your unique benefits — they promote the manufacturers image.  And he cited a sobering example of the dangers of relying on these co-op programs for your advertising strategy.

Case Study:  A Manufacturer’s Co-op or a Custom Direct Response Piece at Full Price

A client was offered a direct mail piece that was slick, pretty and paid for by the manufacturer.  Hard to resist, until his results came in.

“We recently sent out a marketing piece from one of our manufacturers for which the distributor paid over $6,00 in co-op money,” Hudson quoted Steven J. Lang in South Carolina as saying.   “This promotion cost $18,430 and generated $18,047.  Without the co-op money, we wouldn’t have broken even.

“Yet  we ran one of your postcards promoting the same service to the same group.  Remarkably it generated over 250 leads and $15,3052 in revenue from a $13,071 investment.  The co-op didn’t matter, the results did.”

Hudson makes a good point, but I would like you to think a little further here.  If manufacturers and distributors consider co-op advertising programs important, can you see why other upstream marketing strategies especially within the business-to-business environment are also vital for your business success? In essence, if your clients’ clients can obtain business from your marketing support, you will enhance your relationships and make additional sales.

You may be a subcontractor or consultant to a project worthy of public attention.  Encouraging your client to seek media attention and helping with the funding of the publicity makes sense (especially if you can download some of the costs to your suppliers through their co-op advertising funds).

Note these principles apply in the business-to-business space more than in the business-to-consumer marketplace.  If you are selling direct to the public, you need to think 0f your own marketing and advertising strategies and come up with materials that build your brand not your suppliers.  You can work with consultants like Adams Hudson to develop these strategies and/or connect with the really successful marketers in other non-competitive places and research and emulate their ideas.

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