HOW TO ENHANCE PErfOrmANCE Of yOur NATIONAL brANd’s CO-OP AdvErTIsINg PrOgrAm

g T

5 Steps to Integrating

Digital into Your Co-op

Marketing Program

It’s also surprisingly complicated and as an ever-expanding channel can present problems for both marketing execs at leading national brands and local business owners. Complications aside, it’s clear that digital marketing is a channel that neither national brands nor local business owners can continue to ignore.

Given the current and growing impact of digital marketing it is now essential to both national brands and local resellers that digital marketing be part of a national brand’s co-op program. Facilitating effective digital marketing at the local level enables the local reseller to better communicate with their customer base thus strengthening the national brand’s presence at the local level.

This comprehensive how-to guide is for national brands wanting to integrate digital marketing into their pre-existing co-op marketing programs. (And for brands that are hesitant to include digital into a pre-existing co-op program, read on; the benefits FAR outweigh the challenges/concerns.)

DIGITAL MARKETING IS BO MING.

fACT:95% oF smARTphone useRs

hAve looked FoR loCAl

InFoRmATIon vIA mobIle

devICes And 88% oF These

useRs TAke ACTIon wIThIn

A dAy (google)

TAbLE Of C NTENTs

1: dIgITAL mArKETINg TOdAy The Role of digital marketing in Today’s environment

2: dIgITAL mArKETINg AT THE LOCAL LEvEL The Importance of digital marketing at the local level

The Co-op marketing program lag

3: CurrENT CO-OP PrOgrAms where Co-op dollars Are Going

The delayed Adoption of digital marketing

4: gOINg dIgITAL IN 5 sTEPs 5 steps for successful digital Integration

5: LOCAL WEbsITEs: THE PIvOTAL dIgITAL TACTIC why local websites are vital

6: WrAP uP 4 Reasons to Go digital now

7: fAsT fACTs Taking your Co-op program digital

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4

dIgITALmArKETINgTOdAy

5*Marketers Shifting Ad Spend Mix to Digital Media. RSW/US. MarketingCharts.com. June 2012.

THE rOLE Of dIgITAL mArKETINg IN T dAy’s ENvIrONmENTMobile phones, tablets, laptops, smartphones: the whole world has gone digital.

People are consuming more digital content than ever before and any company that has not yet included digital tactics into their marketing strategy is missing out on a huge opportunity.

Current research indicates that over a third of national marketers have already shifted at least 50% of their total marketing budget toward digital advertising. It’s apparent that national marketers at large have not only made note of the importance of the digital marketplace but are actively making changes to integrate digital tactics into their national marketing strategies.* When considering how your national brand’s co-op allocation plan could be readjusted to incorporate digital, compare 2010 advertising expenditures with those projected for 2014 (figure 1).

figure 1

(source: Zenithoptimedia)

$u

s m

ILLIO

N

PrOJECTEdsPENdINg IN

2014sPENdINg IN

2010

20

40

60

80

100

120

140

160

180

200

220

240

260

KEy TAKEAWAys:

» By 2014, Internet ad spend is projected to surpass that of newspapers.

» Projected growth is in store for both TV and Internet advertising.

» TV ad spending will increase 23% while Internet will skyrocket by 76%.

NATIONAL mArKETErs ArE sEEINg rEsuLTs frOm

ONLINE AdvErTIsINg ANd WILL AdJusT THEIr

budgETs ACCOrdINgLy.

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dIgITAL mArKETINgAT THE LOCALLEvEL

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THE ImPOrTANCE Of dIgITAL mArKETINg AT THE LOCAL LEvELAs a society, we spend more time online than ever before. Research shows that consumers are conducting more and more local searches and that 43% of those searches include local identifiers.*

THIs sTATIsTIC INdICATEs TWO THINgs:

1. Consumers would rather type in a few location-relevant keywords than dig out the phone book.

2. Purchase-ready customers are turning to the Internet to locate nearby reseller locations and stores.

THEsE fACTs ArE furTHEr suPPOrTEd by THE fOLLOWINg:

*Study: 43 Percent Of Total Google Search Queries Are Local. October, 2012. Search Engine Land.

By 2015, companies that focus on integrated processes for local marketing enablement will increase revenue by 15 to 20% (gartner).

follow up offline via an

in-store visit, phone call

or purchase.

(TmP/comscore)

have looked for local

information via mobile

devices and 88% of

these users take action

within a day.

(google)

now use the Internet

when shopping locally

for products and services.

(The Kelsey group) (rmA)

For more in-depth information about digital marketing at the

local level, view the LOCAL WEb WHITEPAPEr »

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LOCAL ONLINE Ad sPENdINg grOWTH

It’s not just national brands that recognize the power of digital marketing. Research shows local businesses are seeing increased digital opportunities. This shift is apparent when one examines past, present, and projected local ad spending (figure 2).

THE TAKEAWAy:

Growth rates of U.S. ad spending (depicted in figure 2) reflect double digit, year-over-year increase. This indicates that local businesses are reallocating their budgets to accommodate digital advertising.

(% change, source: Emarketer)

figure 2

*Includes search and display, excludes spending on traditional media websites such as TV, radio, newspaper, and internet yellow pages; ** Includes pure-play sites; TV, radio, cable, newspaper, magazine sites, and internet yellow pages; excludes national ad dollars spent on local placements; *** Includes local mass media sites (TV, newspaper and radio)

Co-op programs should be specifically designed to help facilitate effective local marketing efforts that mirror current trends.

2012 2013 20142011

NOV 2011 *

NOV 2011 **

OCT 2011 ***

COmPArATIvE EsTImATEs: us LOCAL ONLINE

Ad sPENdINg grOWTH, 2011-2014*

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THE CO- P mArKETINg PrOgrAm LAgRecent research from Borrell & Associates indicates that, while there is currently an estimated $22.4 billion in co-op funds being made available, only $1.7 billion of those funds (roughly 7.5%) are being made available for digital efforts.* This means that the co-op industry at large is offering less than a third of what research indicates they should be offering.

Meanwhile, national brands are wisely investing heavily in digital for three primary reasons:

1. dEmANd frOm CusTOmErs. Consumers are turning to the internet first.

2. HIgH TrACKAbILITy. Online marketing offers solid metrics, analytics, and ROI capabilities.

3. suCCEss rATE. Digital efforts are proving to be more successful than traditional efforts.

*Online Co-op Advertising: A $1.7 Billion Opportunity for SMBs. Borrell Associates. May 2012.

Due to the co-op marketing program lag, national brands that activate their resellers in the digital

space NOW greatly increase their chances for both immediate and long term success at the local level!

sO, WHy ArEN’T rEsELLErs

bEINg ENCOurAgEd TO

fOLLOW suIT?

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CurrENT CO-OPPrOgrAms

11

WHErE CO-OP dOLLArs ArE g INgTo understand how to best revamp your co-op program to include digital, it’s important to first consider where resellers are currently allocating their co-op funds (figure 3).

THE TAKEAWAy:

The findings in figure 3 greatly contrast with most professional marketers’ recommendations regarding an appropriate media mix. Taking into account the newspaper industry’s projected downfall, most national brands probably wouldn’t advise the vast majority of their resellers to spend 65% of their co-op funds on this form of media.

65.2%

37.7%36.0%

25.5%24.7%

20.6% 19.8%

15.0%

10.5%9.3%

0.8%

6.9%

OTHErfigure 3

(source: Co-op Adv. study April 2012; borrell Associates, Inc)

NEWsPAPEr dIrECT mAIL rAdIO ONLINE CAbLE TvbrOAdCAsT

TvmAgAZINE OuTdOOr CINEmA

OTHErPubLICATIONs

dIrECTOryyELLOW PAgEs

WHy ArE rEsELLErs CONTINuINg TO

ALLOCATE suCH A HugE PrOPOrTION Of

THEIr budgET TOWArd NEWsPAPEr?

ANd mOrE ImPOrTANTLy: WHy ArEN’T

rEsELLErs ALrEAdy CAPITALIZINg ON

THE OPPOrTuNITy dIgITAL PrEsENTs?

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THE dELAyEd AdOPTION Of dIgITAL mArKETINg

TOP fOur fACTOrs PLAyINg INTO dELAyEd AdOPTION Of dIgITAL:

1. rEsIsTANCE TO CHANgE. Fear of the unknown, and occasionally idleness both on the part of manufacturers and resellers, may deter them from venturing into unfamiliar digital territories. Manufacturers have historically viewed co-op as an expense whereas resellers, who are busy running their businesses, are often not trained marketers.

2. NATIONAL E-NITIATIvEs. National brands are often apprehensive about possibly competing with their own resellers in the online space. This is particularly true of national brands with e-commerce options. When it comes to auction-based elements like paid search the very nature of such programs may inadvertently create inner-brand competition when both the national and local efforts are centered around the same set of keywords–thereby boosting the cost for both.

3. COmPLEXITy. Due to its fluidity in both form and function, national brands face a significant challenge in keeping pace with current trends in the digital arena. Marketers must be both diligent and agile to maintain expertise.

4. LACK Of TECHNOLOgy. Enabling paid search for a brand’s entire base of resellers would be virtually impossible to do manually, as would managing 1000s of local microsites or social media pages. In order to accomplish such a feat, there is a definite need for technology that allows for planning, managing, and executing these efforts.

At the end of the day, it’s apparent that local resellers are currently unknowingly allocating their co-op budgets poorly. As the national brand it is your right and your responsibility to help guide your resellers in the right direction. To do that, you need to first take confidence in your ability to provide proper guidance and second reach out for available resources to help you plan, execute, and manage it all.

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gOINgdIgITAL IN5 sTEPs

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5 sTEPs fOr dIgITAL INTEgrATIONNow that we’ve gone through the importance and the benefits of integrating digital into your co-op program here are five steps to ensure your resellers thrive in the digital space.

sTEP 1: CONsIdEr THE vEHICLEs

There are a wide variety of digital options available that your resellers are often unable to execute effectively due to time and technological limitations. When selecting from the array of available digital mediums, consider the following:

1. NATIONAL EffOrTs. Determine what you are doing at the national level and why. If email is a key component of your national marketing strategy, it’s likely to also be effective at the local level.

2. dEmANd-gEN EffOrTs. Place an emphasis on demand-gen tactics over branding—and awareness—driven efforts.

3. THINK LONg TErm. Implement tactics that will result in long-term benefits for both local resellers and national brand. Consider the ongoing strategic impact of tactics, such as:

a) b) c) d)

sTEP 2: CONTrOL THE EXECuTION

When your national brand is able to draw from a large group of research and data, you’re able to make better marketing decisions.

Consider paid search. Chances are, many of your resellers are already running paid search ads for their business and there is a high likelihood that your brand is unknowingly directly competing with them, inevitably boosting both of your incurred costs. Taking control of both national and local efforts would ensure cooperation between you and your resellers.

THE dIgITAL sPACE Is fLuId IN bOTH fOrm ANd fuNCTION. As A mArKETEr,

IT’s ImPOrTANT TO EmbrACE THIs IdEA by rEmAININg CONsIsTENTLy

AWArE Of THE EvEr-CHANgINg ArrAy Of AvAILAbLE dIgITAL OPTIONs ANd

HELP yOur LOCAL rEsELLErs TO dO THE sAmE.

Controlling the execution is especially important with mediums that are auction-based, have legal

implications, or are especially technical: search, email, websites, mobile, local search registration, etc.

Local Search RegistrationSearch Engine OptimizationLocal WebsitesMobile Websites

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wARnInG: Don’t be fooled into thinking that online conversions are more popular than phone conversions when it comes to digital efforts. As surprising as it may seem, the average local consumer is still converting via the telephone (70%).* Note: At the national level, however, consumer behavior differs: People typically prefer to research, investigate, and purchase online.

*Social Statistics. Power Reviews.

It’s important to ensure your metrics cover both

digital and phone-based efforts and activities.

sTEP 3: INTEgrATE TrACKINg ANd ANALysIs

Measuring marketing ROI is fundamental for both the national brand and your local resellers. Here’s why:

» At the local level, metrics allow the reseller to see exactly what’s happening with their marketing spend by viewing detailed ROI (most local resellers don’t currently have access to this data).

» At the national level, analytics allow brands to view performance metrics in aggregate so as to gauge the success of the co-op program and monitor performance across the entire co-op program.

sTEP 4: mAKE IT EAsy

The best way to convince your resellers to implement your digital marketing plan is to make engagement straightforward and simple.

4 ways to keep the process simple:

» Integrate the creative and financial components of your co-op program. Most co-op programs conduct transactions separately, but this is rarely effective. Streamlining transactions simplifies the process for both the national brand and the reseller. By eliminating the rebate-like feel of the co-op program, the brand and reseller save substantial sales time, overall cost, and avoid unnecessary friction.

» Apply data. Simplify the process by using data-driven elements for content creation and limiting customizations. Limit the time required by the reseller to execute by aiming to have 90% of content entirely data-driven.

» Offer a single log-in location. One destination for all digital and, ideally, traditional marketing activities, will make resellers more inclined to engage.

» Emphasize subscription-based activities. Offering subscription-based advertising tactics provides the reseller with the ability to access the platform once, customize (or select) information, and then automate the process; saving time, energy, and marketing dollars.

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sTEP 5: drIvE AdOPTION

Integrating digital can and will transform your co-op program into an investment line item that promotes widespread reseller adoption.

6 Tips to drive Reseller Adoption:

» Engage prominent resellers. Execute the program early with a pilot group of influential local marketers. Then, develop testimonials based on their marketing success stories.

» Analyze and adjust reimbursements. Modify reimbursement percentages based on marketing results and adoption levels.

» Spread the word. Actively promote your revamped program in all of your national brand’s one-to-many reseller events (tradeshows, conferences, conventions, etc.).

» Engage your sales force. Your digital program’s foremost ambassadors are within your sales force. Engage them early and often for program support.

» Incentivize vendors. Drive adoption on your behalf by encouraging your vendors to reach out directly to your resellers.

» Sync your corporate vision. Executive-level buy-in is critical. Whether it is a national sales meeting or annual conference, your leaders should be dialed in and ready to help drive adoption.

drIvEAdOPTION

mAKE ITEAsy

CONTrOLTHE

EXECuTION

CONsIdEr THE

vEHICLEs

INTEgrATETrACKINg

ANd ANALysIs

For more information about automating co-op marketing, visit

THE CO-OP mArKETINg TOOL KIT »

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LOCAL WEbsITEs:THE PIvOTALdIgITAL TACTIC

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WHy LOCAL WEbsITEs ArE vITALIn today’s digital marketplace, national brands should be providing their resellers with local websites that are co-branded, search engine optimized and fully trackable.

Local websites give your resellers an easy to maintain, customizable, deeply branded, search engine optimized online presence - in turn giving your customers an easy to find avenue to your brand and the local reseller’s stores.

LOCAL WEbsITEs sHOuLd PrOvIdE:» Location and contact information.

» Unique tracking numbers for capturing results .

» One or more trackable lead capture forms that funnel directly to the local reseller.

» Professionally developed, corporate-approved brand content.

» Mobile-optimized websites to capitalize on the staggering growth in the mobile space.

Local websites serve as the centerpiece for all co-op funded local marketing activities. In addition, they:

» Provide sophisticated phone and web tracking to both the national brand and the local reseller.

• Allow national brand to report the value of their co-op dollars to resellers.

• Give national brand a view of aggregated performance across an entire network of resellers and deeper insight into the overall performance of a co-op program.

» Provide the local content necessary to dominate the Search Engine Results Page (SERP).

» Allow national brands to bring enterprise-class marketing strategy to your resellers at the local level.

mobile version

key local data

corporate approved content

unique tracking number

lead capture form

For in-depth information on local websites, download LOCAL WEbsITEs: drIvINg sALEs

fOr NATIONAL brANds »

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WrAP

uP

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4 rEAsONs TO gO dIgITAL NOWdIgITAL mArKETINg Is bOOmINg. Consumers increasingly use local online sources to make their local purchase decisions, digital is a rapidly growing space that national brands should not ignore.

LOCAL mArKETINg Is dIffICuLT. Given the means and resources available to you as a national brand marketer, it is your responsibility to lead your brand and resellers into the digital marketing space.

mAXImIZE rEsELLEr’s rOI. Co-op programs today are supporting marketing behavior that is dramatically out-of-alignment with current market trends. By supporting digital marketing you enable your resellers to make the most of their co-op funding while your brand reaps the benefits of claiming digital territory.

gOINg dIgITAL gIvEs brANds A COmPETITIvE AdvANTAgE. Integrating digital into your co-op program will not only set your resellers up to improve their online presence, it will also provide your brand with the research needed to ensure resellers continue to implement the best tactics possible.

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fAsTfACTs

TAKINg yOur CO-OP PrOgrAm dIgITALsTILL NOT CONvINCEd? If yOu NEEd AddITIONAL rEAsONs TO INTEgrATE dIgITAL INTO yOur NATIONAL brANd’s CO-OP PrOgrAm, CHECK OuT THE fOLLOWINg sTATIsTICs:

» While consumers search online, the majority (64%) expect the business location to be within 15 miles (TmP).

» 73% of online activity is related to local content (google).

» 74% of Internet users perform local search (The Kelsey group).

» 61% of searchers consider local search results to be more relevant than paid or general search results (comscore’s Localeze).

» 97% of Internet users use the Internet to shop (NPd group).

» Google has 50 million Places pages waiting to be claimed by business owners (google).

» 58% of searchers consider local search results to be more trustworthy than paid or general search results (comscore’s Localeze).

» Mobile web access will surpass traditional PC access by 2013 (gartner).

» 75% of users never scroll past the first page of search results (Hubspot).

» 51% [of local searchers] explicitly characterize their behavior as “Shop Online, Purchase Offline” (NPd group).

» 49% of local searches are conducted without a specific business in mind (comscore’s Localeze).

ReimbursementRates

Co-op Funding

LegalComplianc e

Reseller Performan ce

Proof Of Activit y

Creative Assets

Marketing Planning

Brand Guidelines

Customer Data

Best Practices

CrEATIvE AssETs mANAgEmENT

fINANCIAL

APPrOvALs

CO-OP mArKETINg

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