Marketing Automation Platforms, the Launchpad for Online Co-op Advertising Funds
In 2012, The Altimeter Group released a report titled “ Co-op Advertising: Digital’s Lost Opportunity .” The report is well-referenced within the co-op community and cites several eye-opening estimates regarding the underutilization of online co-op funds:
- In 2012, $22.4 billion in available co-op funding
- Online co-op market has roughly $1.7 billion available, but $450 million is left on the table for lack of participation
Therefore, of the $22.4 billion made available in the co-op funding, only $1.25 billion is spent online (5.5%). It’s also reported that overall, online advertising expenditures are on the rise and expected to continue growing. Bottom line is that there’s enormous potential for online co-op advertising. Towards the end of Altimeter’s report, three barriers to online co-op advertising are identified: complexity and multiplicity of digital channels, lack of infrastructure in co-op advertising industry, and lack of guidelines and requirements.
These are valid and formidable barriers. Later on, I’ll break down each barrier and introduce a new angle – why marketing automation platforms (MAPs) should be included in the online co-op conversation. First, here’s a simple definition of marketing automation from Techopedia:
Marketing automation is the use of software and Web-based services to execute, manage and automate marketing tasks and processes. It replaces manual and repetitive marketing processes with purpose-built software and applications geared toward performance. 4
I’ve outlined a broad 5-step process of how MAPs could be implemented into co-op programs.
- A vendor contracts a third-party business that develops a MAP.
- The vendor’s co-op program guidelines specify the MAP subscription as an eligible marketing activity.
- Channel partners spend their co-op funds on the subscription fee(s) for the specified MAP.
- If a channel partner chooses to subscribe to the MAP, the vendor is authorized to review “tear sheets,” (performance reports – verification of an activity) that are automatically sent on a predetermined basis.
- Partner confidentiality is guaranteed. Only partner performance metrics are reported (email opens, new followers, impressions, click-through rate, etc.) to the vendor as proof-of-performance. Customer contact information is never disclosed, nor is any information that reveals the identity of end-customers.
Now, let’s revisit those three barriers:
- Complexity and multiplicity of digital channels
MAPs can be user-friendly and don’t dive into the more complex marketing tactics like Keyword Bidding or Cost-Per-Click. MAPs are becoming increasingly intuitive and support the chief digital marketing channels (email, social media) through easy-to-use interfaces that don’t require extensive time, knowledge or resources to understand.
- Lack of infrastructure in co-op advertising industry
MAPs can quickly export partner performance reports directly to the vendor. Reports are easy to read, comprehensive, and helpful for auditing purposes. Also, subscription fees are fixed, so that both vendors and channel partners know exactly how much of their funds will be used, and what for. This also makes it so that there is no need to jump prior-approval hoops.
- Lack of guidelines and requirements
Within the MAP, branding requirements are defined for partners. Automated reports make proof-of-performance the least of concerns. Not only does the vendor get proof of performance, they receive insight into which marketing channels are most successful for their partners.
Spending co-op advertising dollars on MAPs is a viable option for jumpstarting digital marketing within the co-op industry. What do you think?
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