Leslye Schumacher is a Founding Partner with Vici. Leslye’s background in media spans 25 years and includes working for both large and mid-size television, radio and newspaper companies. She has held positions in sales, management, marketing and NTR. Leslye has extensive experience in training salespeople and coaching managers. She is Google Analytics Advanced Certified, a Certified Radio Marketing Consultant and a Certified Sales Talent Analyst, having assessed over 10,000 media salespeople and managers. Leslye was the Vice President Of Talent Services for The Center For Sales Strategy before going on to start TalentQ Consulting and then Vici Media.
How does a small business access digital advertising Co-Op funds? The answer is, unfortunately, many don’t. Even though it is estimated that 43% of small businesses carry or represent products from national brands that offer Co-Op reimbursement for advertising, less than half those businesses use the funds they’ve earned.
Why? Over half (52%) of local retailers from a study said they did not receive adequate training on Co-Op processes. Additionally, 12% didn’t use funds because they said the approval process with the manufacturer/brand, was too complicated, and 15% said they don’t have enough time.
This is where a partnering with a local media seller or ad agency who has access and training on Co-Op plans, pays off for a small business. At Vici, we train our partners on how to walk a local small business through the Co-Op process to claim those advertising dollars!
Have Vici check our Co-Op database to see if any of the manufacturers/brands that the business purchases from, are offering any Co-Op plans. If there are available Co-Op plans, they will find out what types of advertising they include (i.e., digital, radio, TV, print, etc.).
To find out what a specific business has earned in Co-Op, they will have the business sign an authorization letter which allows them to access that information with the manufacturer’s Co-Op Administrator.
If the business decides to do a digital ad campaign utilizing Co-Op funds, they must obtain written prior approval from the manufacturer before running the campaign.
Discuss with the business how the manufacturer chooses to reimburse the business. Typically, it is a credit memo – where the manufacturer issues a credit to the business to use on future purchases of their products.
They will help the business submit a claim package to facilitate the Co-Op reimbursement.
It depends on the individual plan offered by the manufacturer. Most plans include using targeted display (Retargeting, Ad Networks, Keyword Targeting, Behavioral Targeting), Household IP Targeting, Mobile Conquesting, Video, and Google Ads (Pay-Per-Click). Many Co-Op plans will not approve campaigns using Native Ads or Search Engine Optimization. Facebook and Instagram can be tricky because if the Co-Op plan requires the use of a logo of a certain size, that could cause a Facebook or Instagram ad to get denied since they discourage logos and text in images.
Accrual
Accrualsare the money earned by a retailer/dealer to be used for advertising. They areearned in direct correlation to the products purchased from the manufacturerand are based on a percentage of sales with that product line. See also AccrualPercentage.
Accrual Percentage
Thepercentage applied to the net purchases by the retailer to determine amounts ofaccruals, and the accrual percentage varies by manufacturer and sometimesproduct. Accrual percentages vary widely, but the average is roughly 3% of sales.
Accrual Period
TheAccrual Period is the time-frame the manufacturer has set during which theretailer can earn advertising funds. Accrual periods will differ from plan toplan, ranging from previous year’s business to current year’s business to moreelaborate periods like seasonal or rolling six-month and quarterly periods.Performance periods are the time designated in which a dealer’s co-op moneymust be spent.
Authorization Letter
Athird-party consent form that allows the manufacturer to release informationsuch as accrual balances, online portal access and other advertising materialsto the media rep.
Claim Process
Theprocess used by the retailer to get reimbursement for co-op advertisingexpenditures from the manufacturer by providing a billing statement, media invoice,an advertising sample and any other item required by the manufacturer.
Credit Memo
Awritten approval or credit issued by the manufacturer or an outside auditingorganization (a Clearing House) for payment of the co-op claim. Mostmanufacturers will reimburse their retailer/dealer via a credit memo to theiraccount toward future purchases of that product line. Also see Reimbursement.
Current Year/Prior Year
Earnings based on this year’s purchases/last year’s purchases.
Participation
Thepart of the co-op program plan which defines the percentage of an ad cost thatthe manufacturer will reimburse.
Participation Percentage
Percentageof the advertising cost that can be reimbursed – normally 50-100%.
Performance Period
Thetime-frame designated in which a retailer or dealer’s co-op program money mustbe spent toward co-op advertising.
Performance Report
Examplesof Performance Reports and Proof of Advertising include but is not limited to:tear-sheet, affidavit, original direct-mail ad, photograph of billboard, copyof script, email proof, list of keywords, impression rate report and screenshotof advertisement.
Prior Approval
Manufacturersrequire advance approval of ads for content to ensure that the current logo,copy and artwork will appear in the ad. If a co-op ad is run without themanufacturer’s Prior Approval, the ad may not meet the company’s advertisingstandards and therefore, not be eligible for reimbursement.
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