Co-op Dollars Being Left On The Table By Digital Media Says Borrell Associates
May 16, 2012 at 3:53 AM (PT)
Are co-op dollars being wasted by those selling advertising in the digital marketplace? Yes, says BORRELL ASSOCIATES in a new survey. Writes BORRELL, "In the world of marketing, co-op programs are strange animals. They are responsible for the NIKE swoosh in the local shoe store's newspaper ad or the mention of YAMAHA in the local motorcycle dealer's radio spot. They aren’t paid for by money, but they are responsible for spurring billions of dollars of local advertising. And they could be responsible for as much as 9% of all expenditures, except for one small fact: retailers wind up leaving about one-fourth of it on the table -- to the tune of about $6 billion."
Radio sales departments have long worked the co-op angle for their clients. But more and more ad dollars are moving online, and those sales staffs are leaving dollars on the table, notes BORRELL.
"Of the estimated $22.4 billion in available co-op funding this year, we estimate that $1.7 billion is being waved around for online purchases," notes the report. "It's a recent phenomenon. Manufacturers have begun offering credit to local small and medium businesses (SMBs) for not only banner ads and search advertising, but also website development. Still, we estimate that $450 million will be left on the table this year by retailers who are either unaware of digital co-op programs or just don’t want to bother applying for the credit. As one digital seller told us, 'The amount out there is crazy'."
To get a clearer picture of the landscape, BORRELL surveyed 1,354 SMBs in MARCH and APRIL, and found that 30% of the businesses use some form of co-op -- or put a different way, 70% do not. Sixteen percent didn't even know what it was.
The full report can be purchased from BORRELL ASSOCIATES on their website.