Are Your SMB Clients Getting Their Share of Co-op Funds?

Thu Aug 4, 2016

Kathy Crosett

Small and medium-sized business owners are missing out on free ad money. That’s the message from the smallbusinessapparelrecent BIA/Kelsey Strategies for Selling to Co-op Advertisers webinar. If you’re selling media space to SMBs, especially franchisees, remind them that many of their competitors are buying more advertising by leveraging the value of co-op advertising funds from their brand partners. With your help, they can tap these funds, too.

In their latest Local Commerce Monitor, BIA/Kelsey analysts reported that 18.4% of SMBs are currently using co-op ad funds to supplement their marketing budgets. Based on these numbers, BIA/Kelsey estimates that nearly 1 million SMBs are working with brand partners to secure co-op support. Nearly half of the co-op ad fund users, 45.2%, are also franchisees. Business owners who have been around for a while, average ownership period of 4+ years, are also the ones savvy enough to go after co-op funds.

The co-op ad funds make up a significant portion of the media spend for SMBs. BIA/Kelsey divides this market into 2 parts. Smaller SMBs spend about $4,184 on advertising annually. Of that amount, 37.2% or $1,573, comes from co-op advertising partners.  Larger SMBs use co-op funds for 39.2% of their ad budgets. These businesses have an overall ad spend of $82,610 per year.

SMB co-op ad fund users also tend to be concentrated in specific business-to-consumer segments. As a media sales rep, you’ll find them in the construction/contracting field, the accounting field or the retail store sector.

These SMBs understand that increased advertising generates increased sales. They also understand the secret of using ‘other people’s money.’ About 70% of these businesses know they need help to create and purchase great advertising, and they’re using outside agencies. The top four marketing formats these businesses plan to invest in this year are:

  • Email Marketing
  • SEM/SEO
  • Social Media Advertising
  • Print Advertising

Regardless of the format you’re selling, cross-channel opportunities exist to help your SMB clients boost advertising spend to generate more revenue. SMBs who use co-op funds show willingness to go the extra mile and work to get the money their brand partners are making available. You can also help them if your media company has access to AdMall, a business intelligence platform which provides, among other services, in-depth research on thousands of co-op advertising plans.

Remind your SMB clients and prospects that failing to use co-op ad funds is the same as leaving money on the table.

 

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About Kathy Crosett

Kathy is the Research Director for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel.

View all posts by Kathy Crosett
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