Co-op marketing plays a huge part in modern retail. But the landscape is changing. Digital’s rise means the parties involved – both retailers and brands – can expect bigger advantages.
In our last blog, we focused on the former. If you’re a retailer, we argued, leveraging co-op dollars will boost your budget and drive more incremental revenue. You can also expect greater clarity in terms of cents spent.
But what if you’re a brand? After all – you are the one that supplies those co-op dollars. What is the relationship between the retail budget you subsidize, and your products’ performances?
Overall, co-op spending figures remain hazy. In the U.S., commentators put digital co-op spending at between $7.5 to $12.5 billion. However, because different brands have different agreements in place, the amounts received by retailers tend to vary.
The Amazon Impact
A full 83 percent of brands marketers believe co-op marketing affects their sales. Historically, however, the destination of those dollars felt something of a “black hole.” Without the right tools and a co-ordinated strategy, they lacked knowledge around how much effect their spending actually had.
With its advances in performance reports and distribution, Amazon in particular has led brands to expect - and scrutinize - more.
Taking this surge of self-worth into account, here are four ways that the wider world of digital co-op can benefit brands.
Spend Co-Op Dollars More Effectively
Better tools mean brands can stay on top of co-op marketing campaigns. They can pick up on any areas where retailers might redistribute ad spend, for instance on branded and non-branded terms.
More Transparency…More Control
Digital co-op has shaken up the status quo, in part because brands can now go directly to would-be shoppers. Already empowered, they can quickly view how their contributions drive sales – giving them further control over negotiations.
Brands can also negotiate that their co-op dollars be spent on tailored campaigns (including the type of customers they want to reach, and which type of content). Digital co-op facilitates more tailored customer engagement for brands - who can influence shoppers to buy their products over the competitions'.
This is an obvious one. By leveraging their products on retailers’ sites, brands enjoy a bigger potential customer base than they may have otherwise. Promoting indirect channels has a direct effect on a brand’s overall sales!
Meet them on Oct.10 for the New York Know Go: a private event on Co-op Marketing, Sponsored Product Ads and the future of Retail Media.
· Network with retailers, brands and technology vendors.
· Discover the best ways to spend and measure co-op funds.
· Learn how to compete with the industry giants.
Retailers and brands alike are missing out on the opportunity to co-ordinate media strategies and ROI. Learn more about executing a modern, digital retail co-op here.Read more
What is the relationship between brands' co-op dollars and ad performance?Read more