CO-OP ADVERTISING – WHAT IS IT?

In general, Co-op advertising is a joint venture or “partnership” between a buyer and seller to promote sales to the consumer. Specifically, it is an agreement between a manufacturer and a retailer to share the cost of advertising at the local level.

DO YOU SELL THESE BRANDS?

You may be eligible for manufacturer advertising dollars.

FIVE KEY ELEMENTS OF ALL CO-OP PLANS

Accrual – The amount of Co-op money available for advertising. This may be based on a percentage of purchase or it may be a fixed amount. Before initiating an advertising program, the Newsday Media Group Co-op Department will research the accrual. Types of plans:

1. The 100% Plan – Manufacturer pays the total cost of the retailer’s ad.
2. Shared Plan (50%) – Manufacturer and retailer each pay a portion of the ad cost.
3. The Unlimited Plan – Manufacturer contributes a stated % of the cost in each ad
4. The Fixed Plan – Manufacturer allocated a ‘set’ amount of Co-op funds per dealer not based on purchases.

Example of accrual and accrual percentage: A manufacturer sets aside a Co-op fund with an accrual percentage of 2%. A retailer purchases $100,000 of that manufacturer’s product. The retailer has an accrual balance of $2,000 to spend on advertising.

Participation or Performance – The manufacturer’s share of the cost of advertising. Depending on the plan, participation usually ranges from 50 to 100%.

Example of participation: A retailer that has an accrual balance of $2,000 runs a series of ads that total $1,800. If the manufacturer’s participation rate is 50%, the reimbursement that retailer would receive is $900.

Requirements – The rules set forth by the plan must be followed in order to qualify for Co-op reimbursement. If the rules are not followed precisely, a claim may be rejected. Amongst the most common requirements are:

1. Illustration and product in ad
2. Logo
3. Prior approval
4. Competing products

Accrual Period – The time period in which a Co-op plan is in effect. Adherence to the time period of the plan will prevent loss of Co-op funds, since funds are no longer available to the retailer after the expiration date of a plan.

Example of accrual and performance periods: A manufacturer offers a Co-op program of 2% of all previous calendar year’s purchases. The retailers earn their Co-op funds one year and spend them the next. Any purchases they made during the current year are set aside for the next year’s Co-op fund.

Claim – Each plan specifies information that must be submitted in order for a claim to be processed. Manufacturer claim #2 or customer claim #3. The claims are processed as follows:

• Invoice showing date, size, and rate for the ad
• Tearsheet
• Claim form

Important Documents to Download –

• Co-op Authorization Form
• Co-op Accrual Request Form
• Co-op 2014 Monthly Calendar

To learn more, please contact Cookie Sheinin

631-843-3102 | esheinin@newsday.com