What Is Co-op Marketing, and How Can It Increase Sales?

Co-op marketing, or cooperative marketing, can be a win-win for two or more partnering organizations. 

Cooperative marketing is a partnership between two or more brands that collaborate on a marketing campaign, or it can be a cooperative arrangement between a primary brand and its franchisees, dealers, local branches or distributors. The entities that are involved share costs, resources and ideas with the goal of gaining mutual benefits. This type of marketing strategy is commonly used by brands that have complementary products or services and want to reach a broader audience while minimizing expenses.

The collaboration creates an opportunity for the organizations to grow their brands, increase sales and launch products simultaneously — all while gaining strength from each other’s reputations and the traction they have already established with their respective audiences. Trust is a fundamental factor in marketing; when audiences see that a business they trust is promoting a brand that they might not know as well, the unknown business gains clout and reliability with that audience.

What Co-op Marketing Is and How It Works

Co-op marketing can take multiple forms. For one, it can take the form of two or more comparably sized businesses that work together toward a common goal. In another scenario, co-op marketing can refer to a franchisor-franchisee relationship or other down-channel partnership that is based on eCommerce resources, digital marketing, direct marketing and/or warehousing and fulfillment via Through Channel Marketing Automation, or distributed marketing.

For any co-op marketing relationship, each partner should agree to a set of basic rules, which should include budgetary considerations and an overview of branding and messaging. Cooperative marketing programs are typically supported by an OEM, and the partners are provided a certain allocation of marketing support. The OEM may also approve different allotment amounts based on the success of the partner.

Pooling resources allows for larger campaigns with a broader impact, maximizing advertising dollars. While splitting the costs for advertising, promotions and events, each organization involved in the collaborative effort can gain exposure to the other’s audience, build trust with the audiences, enhance their credibility and increase their ROI. This reduced financial burden for marketing and advertising can be especially helpful for small franchises that must lean into the brand name of the parent company. 

At the same time, this co-op marketing solution enables all entities — whether they are the same size or hold a franchisor-franchisee relationship — to grow recognition of their brands. A parent company’s name will build interest in a small franchisee’s products or services, but the franchisee may also attract local customers who had not heard of the brand in the past. Larger OEMs can also gain access to the local partners’ audiences, creating more direct interactions as opposed to relying on broadcast advertising.

Another benefit is access to high-quality marketing materials with consistent branding for all parties involved, such as in the case of a shared digital storefront or e-commerce site. All groups benefit from similarly designed and branded ads, social media content and campaigns, but they can also personalize communications to local audiences. Additionally, organizations that work together to promote their brands can benefit from producing larger quantities of marketing materials, which reduces the cost of each item due to economies of scale. 

Overall, all parties involved in the partnership can gain a higher ROI, particularly because they likely spent less on the marketing campaign than they would have if they did it alone. 

In a cooperative marketing relationship, organizations can set their own policies regarding the technical processes and details of a particular campaign. Because of the policies that the parties should establish, communication is essential to success, and it’s important for all who are involved to understand the rules that have been set in place. For instance, a marketing postcard may be required to have a certain percentage of space dedicated to promoting one company and another percentage for the other, and it may require logos and addresses for each organization.

To further ensure a positive partnership, contributions to and time spent on the project should be equitable as well, especially based on how much money each company is investing into the project. The messaging, artwork and calls to action should be aligned based on a smooth, clever, cohesively designed campaign — all while reflecting each company’s brand via their respective values, key artwork and messaging.

Having multiple companies involved in a campaign also means more stakeholders are involved. In some ways, this is positive, as marketing teams can tap into their creative pool and deliver stronger messaging to audiences. However, it’s important to keep the process moving along by setting clear roles and responsibilities. Having strategic plans and written agreements in place before the start of the project can enhance efficiency and the effectiveness of the campaign, as well as ensure a fair partnership financially and in terms of creativity and workload.

In Action: How Various Industries Could Use Cooperative Advertising Solutions

Cooperative marketing endeavors often are based on collaborations between retailers and manufacturers, joint advertising campaigns and content partnerships for such things as webinars and eBooks. 

For example, Phoenix Innovate recently developed a print and digital product catalog for a client, a drainage solutions distributor, that showcased products from one of its suppliers. The catalog featured logos, artwork and messaging that blended the goals of each organization seamlessly. Both organizations shared the cost of this effort. As a preferred vendor of the supplier, the client benefited with a 50% co-op agreement for digital marketing efforts, while the supplier gained additional brand recognition with the local audience.

Following are several hypothetical or real-life examples of co-op marketing in various industries:

• Retail Stores + Consumer Goods: A clothing brand partners with a shoe company to promote a seasonal collection.
• Travel + Hospitality: An airline partners with hotels and car rental companies for vacation packages.
• Technology + Electronics: A smartphone manufacturer collaborates with a carrier to launch a new phone model.
• Automobiles + Automotive Parts and Service: An OEM partners with a tire manufacturer for a promotional campaign, or dealers partner with the manufacturer to sell services like oil changes or tire rotations.

• Food + Beverage: A soda brand partners with a pizza company for the Super Bowl, or a business that sells milk partners with a cereal company prior to the start of the school year.
• Health + Wellness: A fitness clothing maker partners with a nutritional supplement manufacturer to increase sales, or a gym partners with a wellness app developer to enhance the experience of gym members.
• Nonprofit Organizations + Supporting Businesses: A hospital promotes a blood drive organized through a nonprofit organization, or a pet food company promotes an animal shelter’s mission while reflecting its own brand.
• Down-Channel Partners/Franchisees + Their Brands: An automotive company creates an e-commerce platform that serves as a hub for sales and marketing, or the company uses direct mail personalized with dealership data points.

Phoenix Innovate has provided numerous direct and digital marketing solutions for cooperative partnerships. Our strategic solutions and innovative technologies, including our proprietary CenterPoint digital storefront platform, create positive opportunities for businesses in a variety of industries. 

For more information about tailored co-op marketing solutions for automotive businesses, OEMs, schools, nonprofit groups and other organizations, email us through our website or call us today.

See our case studies to learn more about how these collaborations can result in transformative and sustainable solutions for your organization.