Activating co-op programs with digital marketing

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Shane Vaughan is CMO of Balihoo
Shane Vaughan is CMO of Balihoo

It's no secret that the Internet is the fastest growing advertising medium today. National marketers are seeing value from digital marketing, and they're shifting their spending from traditional channels, such as direct mail and print ads, to the Internet. 

The surprise comes when you learn that even though brands are investing in digital for national exposure, they're limiting their potential when it comes to using digital locally, where consumers most often buy.  Statistics show that national brands set aside a disproportionate amount of budget for digital advertising at a national level (25%) compared to the local level (7.5%), most notably via co-op programs that are specifically designed to facilitate effective local marketing. This is less than a third of what they should be spending where it matters most.

On the other hand, this also means there is a goldmine of opportunity for brands that want to dominate their local space from a digital perspective. Now is the time to start activating and building a digital expertise within your local resellers. Consumers are demanding digital interaction with your brand. They're performing local online searches for your product when they're ready to buy like never before. You need to be represented to remain competitive.

So how do you make digital work within your co-op programs, particularly when so many dollars are already being left on the table? Fundamentally, you need to look at co-op as a marketing investment instead of a marketing expense. Using digital will create a trackable, measurable advantage for you and your resellers in terms of effective marketing and use of co-op dollars, so make the funds available and accessible. Then follow these five keys to success:

Carefully consider the vehicles. Think hard about which digital tactics make the most strategic sense for your brand and resellers. Display and banner ads may be the easiest to integrate because they function most like traditional advertising, but don't limit yourself. Other tactics such as mobile, PPC, and social media may be better suited for capturing local demand. Make sure the tactics you offer as options reflect your national marketing. For example, if customers have come to expect email from the national brand, then you should enable your local resellers to send email, as well. Also, look at demand generation-based activities over branding and awareness tactics and select those that will drive value for years to come, like SEO-optimized local websites.

Control the execution. This concerns a lot of marketers, but is especially important in mediums that are auction-based, have legal implications, or are especially technical. For example, many national brands avoid including local paid search in their co-op programs because their terms could compete. Bringing the effort into your co-op program ensures that your local and national efforts are in alignment. In addition, with data from hundreds or thousands of local paid search campaigns aggregated into one national co-op program, both you and your resellers will have better  information from which to make campaign decisions.

Integrate tracking and analytics. While one of the key benefits of online marketing is the ability to track and measure results, you need to make sure it's enabled through all components of your co-op program from the start. Calls-to-action should link back to locally focused, co-branded, and fully trackable local websites or to local phone numbers with call tracking, since local consumers want to convert via phone most of the time. This will ensure that both you and your reseller can see exactly what's happening with the investment and how it's paying off.

Make it easy. As you start to push resellers into the digital space, there will be hesitancy. Typically, not trained marketers, they tend to do the same thing year after year because it's easiest. Since they're not experienced with online tactics, you need to make it easy for them to apply co-op dollars toward digital. Streamline and automate everything you can with data-driven elements to avoid having the reseller customize or spend time on administration, and so they can be reimbursed quickly. Also emphasize subscription-based activities like paid search and triggered email, so they can “set it and forget it.” 

Drive adoption. Develop some digital successes with a pilot group of early adopters, top resellers, or influential local marketers. They'll act as ambassadors and help you encourage others to engage in online tactics. Also, modify reimbursement percentages based on your marketing strategy and adoption levels. Try a temporary co-op promotion to strategically guide resellers to do the kinds of activities you want them to do. And have your executives and ambassadors actively promote digital tactics at your live events.

With these things in place, including local websites, paid search, and digital marketing, your co-op program can bring significant benefits and competitive advantages. Your resellers will dominate the search engine results pages when consumers are searching for your brand in their local area. You'll have visibility into co-op program performance like never before. And your national and local online campaigns will complement each other from a branding perspective and from a consistent consumer experience standpoint.

Shane Vaughan is CMO of Balihoo.

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