Co-Op Advertising is Surging in Popularity — Here’s Why

Co-Op Advertising is Surging in Popularity — Here’s Why

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Shopping isn’t what it used to be. Social media has not only impacted shopping, but it also altered the trajectory of supporting infrastructure like co-op advertising.

Rather than visiting stores in-person, casually searching for products on Google, or sifting through email newsletters from their favorite retail brands, the majority of consumers today are using social media to find store hours, locations, and information about sales happening in real-time. 

According to industry estimates, as many as 83% of consumers use Instagram to find new products or services, and 72% base their purchasing decisions on the content they see on the platform.

The enticing market of social media has not only become one key to retailers’ success in recent years, but it’s also opened the door to new promotional opportunities. Chief among those new opportunities is co-op advertising, a collaborative approach that involves brands or manufacturers paying for a portion — or in some cases all — of a local retailer’s advertising on social media in exchange for strategic product placements or endorsements.

While the concept of co-op advertising has been around for decades on television and radio, it’s found new life in recent years, as more local businesses build their reputations on social platforms like Facebook, Instagram, TikTok, and Pinterest.

“It’s a win/win for everyone, because not only do consumers learn about sales and store information in real-time, but stores are able to put advertising dollars towards their social media efforts to build trust and reach those consumers who will be going to their brick and mortar stores,” explains Advertising Checking Bureau’s David McShane.

As the head of sales and marketing at ACB, McShane is tasked with leading new sales and spearheading the company’s marketing initiatives. He works closely with his team to develop ACB’s go-to-market strategies and build relationships with clients across a variety of industries, from apparel to home appliances. 

Based on his experience interacting with business leaders and marketing executives, McShane believes that the majority of brands today are actively looking at new ways to market their products and reach consumers in their target demographics. He says co-op advertising has become one of the most effective approaches for brands looking to tap into social media and reach more consumers, and it continues to surge as even more consumers follow local businesses across social channels.

“In this day and age, an Instagram story will reach them better than an email newsletter or physical mailer,” he says. “Retailers want to use the most effective marketing devices available to them at the local level, and clearly, social media is a trending, yet most-effective, way to reach consumers.”

When it’s done right, McShane says co-op advertising benefits local retailers just as much as brands. As part of the strategy, brands often provide local businesses with assets and professional marketing support, which business owners can take advantage of to learn more about maximizing their reach across digital channels. That’s in addition to the financial support, which some brands will offer in exchange for retailers notifying customers when their products are on sale or linking directly to their merchandise on their social media pages.

“Co-op advertising programs are an extremely valuable marketing strategy for manufacturers and partners, providing cost savings, increased exposure, target marketing, improved relationships, and increased sales,” McShane says. “It’s a win-win for all stakeholders.”

While exact figures are scarce when it comes to how much brands are spending on co-op advertising, McShane says it’s clear from talking to executives that co-op spending has been up in 2023.

“This type of advertising spend is not just trending, but it should be a place retailers continue to channel their money, and smart brands will do what they can to help drive consumers to retailers,” he says. “This type of co-op advertising is here to stay, and we see it as a leading media spending area in the majority of co-op programs.”

Stephanie Miles is a journalist who covers personal finance, technology, and real estate. As Street Fight’s senior editor, she is particularly interested in how local merchants and national brands are utilizing hyperlocal technology to reach consumers. She has written for FHM, the Daily News, Working World, Gawker, Cityfile, and Recessionwire.