CO-OP ADVERTISING – WHAT IS IT?

In general, Co-op advertising is a joint venture or “partnership” between a buyer and seller to promote sales to the consumer. Specifically, it is an agreement between a manufacturer and a retailer to share the cost of advertising at the local level.

 

DO YOU SELL THESE BRANDS?

You may be eligible for manufacturer advertising dollars.

Coop Manufacturers Logos

 

FIVE KEY ELEMENTS OF ALL CO-OP PLANS

Accrual – The amount of Co-op money available for advertising. This may be based on a percentage of purchase or it may be a fixed amount. Before initiating an advertising program, the Newsday Media Group Co-op Department will research the accrual. Types of plans:

  1. The 100% Plan – Manufacturer pays the total cost of the retailer’s ad.
  2. Shared Plan (50%) – Manufacturer and retailer each pay a portion of the ad cost.
  3. The Unlimited Plan – Manufacturer contributes a stated % of the cost in each ad
  4. The Fixed Plan – Manufacturer allocated a ‘set’ amount of Co-op funds per dealer not based on purchases.

Example of accrual and accrual percentage: A manufacturer sets aside a Co-op fund with an accrual percentage of 2%. A retailer purchases $100,000 of that manufacturer’s product. The retailer has an accrual balance of $2,000 to spend on advertising.

Participation or Performance – The manufacturer’s share of the cost of advertising. Depending on the plan, participation usually ranges from 50 to 100%.

Example of participation: A retailer that has an accrual balance of $2,000 runs a series of ads that total $1,800. If the manufacturer’s participation rate is 50%, the reimbursement that retailer would receive is $900.

Requirements – The rules set forth by the plan must be followed in order to qualify for Co-op reimbursement. If the rules are not followed precisely, a claim may be rejected. Amongst the most common requirements are:

  1. Illustration and product in ad
  2. Logo
  3. Prior approval
  4. Competing products

Accrual Period – The time period in which a Co-op plan is in effect. Adherence to the time period of the plan will prevent loss of Co-op funds, since funds are no longer available to the retailer after the expiration date of a plan.

Example of accrual and performance periods: A manufacturer offers a Co-op program of 2% of all previous calendar year’s purchases. The retailers earn their Co-op funds one year and spend them the next. Any purchases they made during the current year are set aside for the next year’s Co-op fund.

Claim – Each plan specifies information that must be submitted in order for a claim to be processed. Manufacturer claim #2 or customer claim #3. The claims are processed as follows:

  • Invoice showing date, size, and rate for the ad
  • Tearsheet
  • Claim form

Important Documents to Download –

To learn more, please contact Cookie Sheinin

631-843-3102 | esheinin@newsday.com

 
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