There’s a way for advertisers to often cut their advertising costs by 50% or more on your billboard. It’s an incredibly powerful program that too few advertisers take advantage of. In this Billboard Mastery podcast we’re going to review the concept of “cooperative” (also known as “co-op”) advertising, where the manufacturers of goods cover a portion of the ad cost. This tool can make your sign more affordable and renewal more compelling.
Episode 33: The Timeless Power of Old-Fashioned Co-op Programs Transcript
They say that everything old is new again. But that's not always true because things don't always go in cycles. This is Frank Rolfe, the Billboard Mastery Podcast. We're going to talk about something that really is timeless, but it's never gone out of fashion. And that's the idea of Co op advertising.
So what is Co op advertising? Well, it's a slang term for the word cooperative advertising, and what cooperative advertising is when you have someone who manufactures a product, who is willing to offset the price of advertising a business that sells that product so they share the cost of the ad. How much they share? Often 50%, sometimes as much as even 75%. If you have a billboard that rents for $1,000 a month, it will lower the advertising cost to your advertiser all the way down to somewhere between $500 a month and maybe as low as $250 a month. And as we know, that will lead to a much happier advertiser, and a much more compelling case for them to rent your sign.
So how does Co op advertising actually work? Let's look at two of the main cooperative advertising products just to demonstrate how these are put together. Let's assume that you have a Western wear store, and in western wear stores to sell lots of products, hats and boots and belts, but they're often from roughly the same manufacturer. One large manufacturer is Justin Boots. Justin has been making cowboy boots for around 100 years, Justin has a very large following, they have a very memorable logo. And if you feature Justin Boots, a Justin boot and the logo on a billboard, they will typically under their cooperative programs pay roughly 50% of the cost of that ad. Why would they do that? Well, because not only are they advertising for the store, but they're advertising their boot. So there's kind of a tie in there. Someone sees the sign for the western wear store. Let's assume it's called Fincher's Western Wear, and they see the Justin logo. So when they go to Fincher's, they're already thinking about Justin Boots.
Another one are automotive parts. Automotive parts, Fram oil filters, different brands of oil. They also are well known brands with well known logos. So if you're a Fram oil filters, and you sell Fram oil filters at your local auto part store, let's just say it's Larry's Auto Parts. And if Larry's puts in their billboard a picture of your Fram oil filter, and the logo for Fram, then Fram could possibly pay half of that billboard. So it's really just tying together businesses and certain products.
So what does that mean? If an advertiser is going to have any chance at cooperative advertising, they have to be selling well known branded products. So there's no chance to be able to get cooperative advertising, for example, from Tom's Hamburger Shop. There's no way that the meat producer of the hamburger patties or the pickles or the buns are going to be able to do a cooperative on that hamburger establishment. But if you look at most of the other advertisers out there, there's a whole wide variety that do sell products. So the key is to find out what cooperative programs there are for the potential advertiser.
So when you're looking at the most logical advertisers for assign, which typically are ones that are at the next exit, so it can say "Exit Now" or maybe a couple exits down, or the dominant advertisers in that market are the ones off other signs you may go to. The key question is, what products do you really sell? And number two, have you ever explored what the cooperative opportunities are? Often advertisers you would think would know better will say, "No, I didn't know there are these Co op programs. What an interesting idea." So often, the billboard owner has to become the catalyst for those programs. Other advertisers will say, "Yeah, I am aware of a cooperative program, I did one of those at one time, haven't done one in a while." If you start having to think about the possibility, the fact that they will save a lot of money on their ad, then suddenly they become more intrigued.
Now working with those product manufacturers under cooperative arrangement, it's not as simple as it sounds. You have to find out not only who those folks are and what they'll pay, but additionally, they're going to have requirements on the ad itself. Their logo will have to be a certain percent of the ad, they're product will have to be a certain percent of that. There's also some complications in filing to get reimbursement. The way the ads typically work is the advertiser pays the cost, and then the product manufacturer reimburses back to the advertiser. There may also be some tricks to it, because they may only pay the larger percentages based on how much of that product the advertiser sells. It only make sense. You're not going to have somebody who's got a product, and that person sells it very rarely, think that that's a valuable enough advertiser for them to devote that much money to that one product.
Now, have I ever seen a co op go wrong? I really have not. Every Co op advertiser we've ever done has always been very successful, and everyone's very happy with it. Now it would be horrible, a crisis, if you did not follow the directions of the co op advertiser of the product, and you made the sign wrong. You'd print the vinyl, you'd install it, and they wouldn't get reimbursed, it would be a gigantic mess. So you really have to make sure that you really understand from a detail perspective, that everything has been done appropriately. But as long as you do pay attention to all the requirements and do a good job with the ad and get it installed, typically those programs work wonderfully well. I once had an advertiser named Midway Auto Supply. Midway was on a billboard of mine for over a decade under a cooperative arrangement. And I've had many Western wear stores that have followed suit. So it is, in fact, a very, very successful program. And one that too many billboard owners simply overlook.
The bottom line to it all is if you really, really want to find ways to help advertisers out to pay less for their signs, to have the signs to have more compelling messages, then you really should explore the world of cooperative advertising, or also known as co op advertising. It is literally a win-win. The advertiser is happy, the producer of the product is happy. And you as the site owner are happy because you have somebody on that sign, who has paid a reduced rent, who knows they're getting value for the dollar. And those are the kind of advertisers that will renew year after year. It makes your life so much easier. This is Frank Rolfe, the Billboard Mastery Podcast. Hope you enjoyed this. See you again soon.