A tempting offer

A lot of small businesses have access to co-op advertising. If you sell any national brands, then you know what I’m talking about. Many of these brands have ads ready for use. All you have to do is put your logo, or your store name if you haven’t got a logo, into the space provided, and the manufacturer will pay a good portion of the cost to run the ad. Sounds great, doesn’t it?

Not so fast, though. There’s a catch. You see, if you take a look at that ad, you’ll find that it isn’t an advertisement for your store or business. It’s an advertisement for whatever product or brand you are co-operating with in your advertising. Typically, you get a slender portion of the bottom of the ad or the last five-seconds of the TV spot. The rest of the time or space is devoted solely to them. You get only a sliver.

As a small business owner, there are two questions you need to ask yourself when it comes to co-op advertising:

1. What am I getting for my money?

2. How much do I really benefit from this?

Let’s look at each of these questions, and see if co-op is really as good of a deal as you think.

What am I getting for my money?

When I first started out, I made a lot of TV spots. One of the things you run into with co-op ads is the taggable spot. For those who have no experience or knowledge of co-op advertising but are reading anyway, here’s a brief description: a taggable spot is usually a 30-second TV spot that has the last 5-seconds or so blank so you can add your store’s location and contact information. Sometimes you’ll here a narrator say, “Available at these fine locations” or something like that, but, thankfully, not always.

Anyway, often a furniture or jewelry store or perhaps an A/C & heating company will run one of these taggable ads. They reason they do is the same reason you might be tempted to do it: the manufacturer will pay for half of the airtime.

Let’s do the math.

In a 30-second TV spot, the manufacturer gets 25 seconds, you get 5 seconds. You get 1/6 of the airtime, the manufacturer gets 5/6 of it. And you get to pay for half of that airtime. Some deal, huh?

It works the same for a radio spot or a newspaper ad, only with a newspaper we’re talking about physical space instead of time.

Now if your manufacturer is paying for most or all of the airtime, then you might reconsider, but only after you’ve answered the second question.

How much do I really benefit from this?

While there are notable exceptions like Rolex, most manufacturers don’t give their partners an exclusive sales agreement. La-Z-Boy recliners can be found in a lot of furniture stores, even in the same area. The manufacturer will make money regardless of where their product is bought. Getting their name out there benefits them even if you never make a single sale.

You see, any ad your manufacturer runs also benefits any of your competitors that carries that same brand. Yeah, because you’re paying for it, you get your name attached to the ad, albeit ever so briefly. But what is more likely to be remembered about the ad, the vast majority of it concerning the manufacturer, or the sliver at the end about you? Who benefits the most?

If you have an exclusive arrangement, co-op advertising can help stretch your ad budget. But the bottom line is this: co-op does nothing to bolster your brand or identity in your marketplace. Even if you have that exclusive arrangement.

An apple for your thoughts

Learn a lesson from the big boys. Home Depot and Lowe’s both carry famous national brands, some of which are exclusively found only in one store or the other. Do they spend a lot of time talking about the brands they carry in their advertising, or do they concentrate on what makes them unique from their competitor?

Don’t think that you can’t do the same¬†because you don’t have the advertising budget of¬†Home Depot or Lowe’s. The money you would spend on a co-op advertising campaign could be spent on a campaign that would exclusively promote your company’s unique way of doing business. It’s simply a decision about how to best use your ad budget.

Don’t fall for co-op. It costs more than you think.

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