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Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 1
Brandeis C. Hall VP/Training [email protected]
Understanding Co-op Funding
1. How much money is available
2. The 4 key benefits of using co-op.
3. How co-op works.
4. How to use RAB’s co-op tools.
Here’s What We’ll Cover
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 2
Calculating The Co-op
Some $50 billion of media advertising
is financed through co-op programs.
Calculating the Co-op In your Market
$30 per capita x Market Population
Two-thirds is usually spent in local media
One-third goes unused
50,000 people x $30 = $1.5 million.
$1 million is used – $500,000 wasted.*
*Revenue Development Systems
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 3
15,730,000 people x $30 = $471,900,000
$ 314,600,000 is used in local media
$157,300,000 is UNUSED.
Calculating the Co-op In Your Market
Market # 1: New York, NY
Population: 15,730,000
2,648,300 people x $30 = $79,449,000
$52,966,000 is used in local media
$26,483,000 is UNUSED.
Calculating the Co-op In Your Market
Market # 17: San Diego, CA
Population: 2,648,300
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 4
Market # 26: Riverside-San Bernardino
Population: 1,975,600
Calculating the Co-op In Your Market
1,975,600 people x $30 = $59,268,000
$39,512,000 is used in local media
$19,756,000 is UNUSED.
Calculating the Co-op In Your Market
Basically, $10 per person
in your market goes unused…
Every year.
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 5
Four Key Benefits of Co-op
• A lucrative source of new revenue.
• Stretches a retailer’s ad budget.
• Local retailers can tie into national manufacturer’s programs.
• Rarely CPP or ratings driven.
9
Co-op Overview
Heaviest Media Co-op Users:
• Newspaper
• Yellow Pages
• Magazines
• Other Print
• Broadcast TV
• Cable
• Radio
• And now…Internet
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 6
Present Using Co-op As Means for Expansion
Co-op should always be positioned as a means of
expanding, and not reducing an ad program.
Co-op Overview
Companies are highly interested in
integrated marketing campaigns.
Bundle co-op resources for a retailer!
• On-Air
• Online
• Signage
• Events
• Promotions
Co-op is available for…
Co-op Overview
And more things you haven’t even thought of…
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 7
Co-op Overview: The Essential Triad
The
Co-op
Triangle
Manufacturer
Retailer Radio
Co-op Overview
Local retailer runs advertising featuring a manufacturer’s or supplier’s product or service
The manufacturer or supplier reimburses the retailer for (all or a
portion of) the advertising based on the retailer’s previous purchases.
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 8
Three Ways to Use Co-op Effectively
•Retail Programs
•Dealer Group Programs
•Distributor Programs
16
Three Ways to Use Co-op Effectively
Work with a single retailer
to use accruals from one or more vendors to advertise one or more
products/services
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 9
17
Three Ways to Use Co-op Effectively
You work with one
manufacturer to combine
the accruals from several
retailers to advertise
selected products/services
18
Three Ways to Use Co-op Effectively
You work with one
wholesaler or distributor to
combine their own accruals
to advertise selected
products/services on
behalf of their retailers
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 10
Retail-Driven Co-op
Retail Programs
Work with a single retailer to use accruals from one or more vendors to advertise multiple
products/services
RAB 7 Steps to Successful Selling
20
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 11
• Paint
• Lawn / Garden
• HVAC
• Flooring
• Hardware
• Sporting Goods
Prospecting for Co-op
• Boats
• Shoes
• Swimming Pools
• Auto Dealers
• Fireplaces
• Office Supplies
By Season:
Prospecting Indicator reports
Prospecting for Co-op
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 12
Top 40 Business Survey
Prospecting for Co-op
Top 40 Business Survey
Prospecting for Co-op
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 13
Other Media:
Prospecting for Co-op
5 Basic Co-op Terms You Need To Know
1. Accrual: Co-op funds earned - based on a percentage of purchases from Manufacturer. (Actual $ banked)
2. Accrual Period: Time frame for accruals (set by Manufacturer).
3. Accrual Rate: Percentage of purchases to be reimbursed to the Retailer as co-op funds. (Usually 1%-5%)
4. Allowance: Percent of advertising invoice to be reimbursed to the Retailer up to the amount accrued (i.e. 100%, 50%)
5. Expiration Date: The date when the retailer no longer is eligible for reimbursement and the accruals revert back to the Manufacturer.
26
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 14
RAB Co-op Directory
• Plan Examples…
RAB Co-op Directory
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 15
RAB Co-op Directory
RAB Co-op Directory
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 16
RAB Co-op Directory
RAB Co-op Directory
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 17
1. Yes.
2. No.
3. With Prior Approval.
4. On a Case-by-Case Basis.
RAB Co-op Directory: Internet Co-op Options
33
• Banner sponsorship
• Audio commercial
• Video commercial
• Pre-rolls
• Player banner ads
• Player sponsorships
RAB Co-op Directory
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 18
RAB Co-op Directory
RAB Co-op Directory
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 19
RAB Co-op Directory
RAB Co-op Directory
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 20
RAB Co-op Directory
RAB Co-op Directory
Cancellations and Changes To Existing Co-op Programs.
It is the manufacturer’s prerogative to change the marketing or
program any time they desire.
Many manufacturers have put their programs on moratorium during
the recent economic downturn but will re-activate them as the
economy improves.
The RAB is adding programs almost daily. Your leads help.
When you find a program or change to a plan not in the directory,
send in the lead!
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 21
1. Do your homework
7 Steps to Co-op Success
2. Meet with the Retailer
• Conduct a CNA
• Walk the store
• Ask what brands offer co-op
7 Steps to Co-op Success
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 22
3. Contact Manufacturer
• Use RAB Request Letter
• Manufacturer web site
• Get co-op program details
• Pre-approval of program
• Written approval of script
7 Steps to Co-op Success
4. Create a schedule / program
• Include more than on-air
• Adhere to budget guidelines
• Alert Traffic Department
• Detail everything
7 Steps to Co-op Success
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 23
5. Run Campaign
7 Steps to Co-op Success
6. Billing
• Fill out the affidavits / Tear sheets
• Collect paid invoice from retailer
• Other required documentation
• Send to manufacturer
• Copy for retailer / yourself
7 Steps to Co-op Success
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 24
7. Follow-Up
• Check retailer for feedback on
program results
• Inquire about reimbursement
from manufacturer
• Expedite reimbursement if
necessary
• Plan next program
7 Steps to Co-op Success
RAB Co-op Tools
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 25
RAB Co-op Tools
• Sample Co-op Scripts
RAB Co-op Tools
• Sample Co-op Scripts
• Retailer Introductory Letter
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 26
RAB Co-op Tools
• Sample Co-op Scripts
• Retailer Introductory Letter
• Manufacturer Intro Letter
RAB Co-op Tools
• Sample Co-op Scripts
• Retailer Introductory Letter
• Manufacturer Intro Letter
• ANA/RAB Tear Sheets
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 27
RAB Co-op Tools
• Sample Co-op Scripts
• Retailer Introductory Letter
• Manufacturer Intro Letter
• ANA/RAB Tear Sheets
• Glossary of Terms
RAB Co-op Tools
• Sample Co-op Scripts
• Retailer Introductory Letter
• Manufacturer Intro Letter
• ANA/RAB Tear Sheets
• Glossary of Terms
• Helpful Articles
Understanding Co-op
RAB Webinar May 2012
Radio Advertising Bureau
www.rab.com
Copyright 2012
Page 28
• Work 60-90 days out
• Be diligent and organized
• Follow-up on paperwork and reimbursement
• Use RAB’s Tools & Resources
• Ask for help
Wrap-Up
55
Brandeis C. Hall VP/Training [email protected]
Understanding Co-op Funding
