Dictionary of Business Terms: cooperative advertising
cooperative advertising
- in retailing, an arrangement between a manufacturer and a retailer whereby the manufacturer will reimburse the retailer in part or in full for advertising expenditures; also called co-op advertising. Ads and commercials are usually produced by the manufacturer and placed by the local retailer, using the store's name.
- individual advertisement sponsored by two or more manufacturers or retailers where the sponsors cooperate in the copy as well as the budget.
Dictionary of Marketing Terms: cooperative advertising
cooperative advertising
- in retailing, an arrangement between a manufacturer and a retailer whereby the manufacturer will reimburse the retailer in part or full for advertising expenditures; also called co-op advertising. Ads and commercials are usually produced by the manufacturer and placed by the local retailer, using the store's name. Cooperative advertising is an important part of retailing and amounts to more than a billion dollars a year. It enables the manufacturer to advertise at the local rate for media, since all advertising is placed by the local retailer. This is usually cheaper than the national rate, and thus the manufacturer can buy more time and space for less money. Cooperative allowances are typically geared to sales, and the greater the sales, the greater the allowance given by the manufacturer to the retailer. Inevitably, co-op advertising means more advertising for everyone concerned, because more retailers will advertise if cooperative money is available. It is estimated that 75% of all cooperative money is spent on newspaper advertising, while 12% is spent on broadcast (8% on radio and 4% on television).
- individual advertisement sponsored by two or more manufacturers or retailers where the sponsors cooperate in the copy as well as the budget.
