<img height="1" width="1" style="display:none;" alt="" src="https://px.ads.linkedin.com/collect/?pid=2736228&amp;fmt=gif">

Still Using Your Automotive Co-Op Plan to Market Your Dealership? Here's What You're Missing

Working with an advertising cooperative takes control of so much of your marketing plan. While they’re useful in developing brand awareness, co-ops are less effective with customer outreach and acquisition. Reaching a local audience requires strategy, and using an integrated marketing approach could improve your bottom line.  

Marketing co-ops help reduce marketing costs to create brand uniformity nationally but they’re not the best option for localized advertising. Solely relying on it means you'd miss out on a lot of potential local leads. 

Not meeting your revenue goals because of an ineffective marketing strategy can be frustrating. That's why we want to help you overcome this altogether. Partnering with a digital agency crucially helps you overcome this hurdle. Here, we’ll go over how a co-op works and explain why it’s a good strategy to expand beyond it.  

What Is A Marketing Co-Op? 

Co-op marketing is an advertising partnership between two businesses or companies that mutually agree to share the marketing and customer outreach cost. Many times, co-op advertising involves manufacturers, wholesalers, and retail traders. 

Co-op advertising has been around for decades using the traditional marketing approach. It relies on media like newspapers, radios, and television. Established big brands have set budgets for co-op marketing, so partners only need to apply for the program. It involves the use of pre-made graphics, messaging, and promotions. Once the manufacturer prepares all these materials, they distribute them to all other partners in the program. In this way, it creates economies of scale and reduces marketing costs for everyone.  

If you're looking into using co-op advertising, there are four plans that you could consider. These include: 

  • The 100% plan --The manufacturer pays for the entire advertising cost. This plan is risk-free and will appeal to those without a budget of their own for running ads. 
  • The shared plan --Both parties agree on a cost-sharing plan. It may appeal to those who want to reduce their risk advertising tolerance. 
  • The unlimited plan-- The manufacturer foots a predetermined percentage of the cost of the ads.  
  • The fixed plan-- The manufacturer sets a fixed annual ads budget.  

Whichever you choose, you can apply for the plan that appeals most to you. The end goal is to reach out to your audience at a lower or no cost to you.  

How Does An Automotive Co-Op Work? 

Automotive co-op advertising follows the same approach. For starters, automotive manufacturers use this tactic to help their local dealers promote their products through local ads. Some auto manufacturers with this program are Audi, BMW, Ford, and Jeep, amongst others. 

To qualify for a co-op advertising program, you have to comply with your manufacturer's terms, including what type of ads you can run, expected revenue goals, performance proof, and the ads' content. 

While automotive co-op advertising is cost-effective in reducing ad spend, the approach may never be adequate for local advertising. Effective marketing should be laser-focused. However, the co-op approach is general and doesn't factor in audiences in different regions. 

In the end, you may never realize your sales goals if you're solely relying on co-op advertising. Despite the money you'll be pumping into ads, if they're not specific to your local audience, they may never yield results. 

The good news is, you can counter this challenge by working together with a digital partner.  

How will a Digital Partner Help My Sales? 

Nearly half of businesses spend $500,000 on digital marketing annually. If digital marketing wasn’t effective, no company would be spending this much on digital customer acquisition. 

Partnering with a digital agency helps reach your local audience. Digital agencies are specialized in what they do and can help you out with marketing strategies, like search engine marketing (SEM), social media, and branding. 

SEM helps you be found on a local level when your best potential customers are searching the vehicles you have on your lot and bringing them back to your site rather than the manufacturers.  Applying strategies like display ads (branding) or pay-per-click advertising (PPC) helps target local customers. 

Customers spend more time online looking for vehicles to purchase before they ever visit a dealership since 59% of car buyers research online when looking for a car.  A Digital agency will help you to position yourself strategically so that potential buyers find you easily.  

A Digital Partner helps you reach out to your car customers online while they’re early in their buying process. The focused advertising approach helps you reach your local audience, increasing the likelihood they’ll come to your dealership to buy. It puts you one leg ahead of your competitors who're only relying on auto co-op advertising. 

As commerce transitions online, the automotive industry will likely transition to a digital-first approach. However, rather than wait, be proactive and try your hands-on digital partnerships instead of your ad co-op alone. 

[FDS] Subscribe to the Blog


Heather Riley

Written by Heather Riley

Heather Riley is Director of the Campaign Team for Federated Digital Solutions. She has been in the advertising industry for over 15 years and is fortunate enough to be able to leverage that experience into helping maximize the ROI for clients by implementing processes for campaign optimization and monitoring, as well as helping develop customized advertising strategies to help clients move forward in a way that aligns with their business goals.

Recent Posts