Advertising assistance from the OEMs, commonly referred to across various manufacturers as “co-op” when it is refunded by the OEM, can be a great help to dealers to offset advertising costs and achieve market share. I won't say that what the OEMs deem as "co-op-able" is always the best choice for a dealer: However, in many dealers it seems that “is this advertising co-op-able?” has become a standard bar to measure advertising—instead of measuring sales results!!—and that is extremely dangerous. And stupid, really. Especially when this sales year of 2012 is shaping up to be the first really good one in quite a while!
So, how does co-op make us stupid? For example, let’s say an OEM-approved website vendor has a co-op-able pay-per-click (PPC) program. Let’s do it! Can’t be bad, right?
Except it can be and likely is.
Because if the OEM-approved website vendor is using the same PPC terms across all the dealers with the same lines in the same area, not only is this ineffective it also just burns through a PPC budget in a hurry. And produces little, if any, sales.
And this happens every day. I’ve seen it.
Another example of “co-op making us stupid” is limiting our advertising to only those things that are co-op-able. Let’s say some co-op money is available for direct mail, but it’s only possible to do it twice a year and co-op the money. So all we do is direct mail twice a year and we ignore that our market actually reacts well to direct mail quarterly or more! And we lose sales because we forgot that advertising is about “investing money to make sales”—and not about “investing money to get co-op dollars back from the OEM.”
I will reiterate that co-op, when used correctly, can be a great help to a dealer's advertising and a great competitive advantage. However, we need to use co-op to smartly add to our business and not to just buy inept programs because they are co-op-able and/or limit our advertising to only the advertising—good or bad—that is co-op-able.
Remember, advertising is done to gain sales, not to gain co-op money. If we make advertising (digital and non-digital) decisions based solely, or even in larger part, on whether the advertising is co-op-able, we are dangerously letting co-op make us stupid.
Which, in a rebound year like 2012, will still put us “back-of-the-pack” in sales. Do we want to be “#1 in co-op”? Or “#1 in sales”? Easy decision when put that way.
So go be smart and sell!