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Ian Cruickshank

Ian Cruickshank VP of Sales and Marketing

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Do you like free money? Here’s how to take advantage of your OEM’s Co-op program.

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Marketing vehicles (or anything for that matter) can be broken down into four parts: message, creative, distribution channels, and measurement. Of course, what is typically implied in all of this is execution and the money that fuels this execution.

You can have all the greatest plans and strategies in the world but without the funds to execute, that’s all they’ll ever be: plans. As we’ve all found out while growing up, money doesn’t grow on trees. Raise your hand if you’ve ever buried a dollar bill in hopes that a money tree will sprout. I even went so far as to buy a “Money Tree” – I call it Ben. (Yes, Franklin)This can especially be troublesome for smaller dealerships or groups that are starting out where advertising dollars are sparse.

Luckily, OEMs are there with co-op programs. These funds are available for your dealership to advertise the brand’s vehicles. Typically OEMs will reimburse you back with a percentage of the cost to run the advertising. In some cases, they will cover the entire cost of the program.

So, if you’re not taking advantage of your OEM’s co-op programs, you’re leaving money on the table. My guess is that 95% of you know that there are funds available, but it’s the co-op process that gets in the way. This time, raise your hand if you have a stack of co-op affidavits/tear-sheets that need to be submitted. I’ll bet that the total annual unused co-op funds are in the 10’s or 100’s of millions annually.

Here are some tips on how to take advantage of co-op programs for your brands:

Follow the guidelines
 
Sounds simple enough, that is until you start reading the 50+ paged guideline book. I was cleaning up my office just this past week and I found a stack of them: BMW, CDRJ, Ford, Mazda… all thicker than the last issue of the Strategy Mob magazine. However, you have to appreciate that OEMs (like you do… or should), need to maintain a consistent brand. As a result, OEMs have spelled out everything for you. The good news is that typically most of these requirements make sense and their “restrictions” are in line with the best practices you should have when designing an ad.

Pay attention to the specifics for each brand

While this may seem straightforward, in practice things can get tricky. For an automotive group that may represent multiple different brands the task can be fairly tedious. Heck, even if you have one brand, you may actually have 4: Chrysler, Ram, Dodge, and Jeep are all different brands. Some need a disclaimer (Toyota), some need the model code (Nissan), some require specifics on pricing (MSRP vs. list price). The point is, each brand is willing to provide you funds to advertise their cars, you just need to follow their rules.

Be aware of changes in guidelines

Brand standards will change from time to time and OEMs will typically send you new guidelines when this happens. It’s important to fully re-read the documentation as small details may change that will affect the approval of your ads. 

For example, in May of 2015, Volkswagen changed their corporate font from “VW Utopia” to “Volkswagen Text” and more recently, Volkswagen has decided to remove "Das Auto" from the logo completely. After a grace period, any ads with the old font and the tag line "Das Auto" will be rejected from co-op funding. 

Take the easy way out - Get your agency to do the legwork.

If you think this is a lot of work, you’d be right (They are giving you “free” money - after all). So why shouldn’t they want things done correctly. In many cases, each ad needs to be submitted to the OEMs for pre-approval and then resubmitted with a screenshot of the ad as it appeared “in the wild” before your dealership is reimbursed. Think for a second about the years and years that brands have spent developing their brand. Now imagine you and all your DP and GM buddies coming up with your own Chevy, Audi, and Kia ads. Do you think they would look better or worse than the guidelines?
 
Now as a result of the hurdles, we’ve found that only a fraction of dealerships are taking advantage of co-op funds from OEMs. Most cite the lack of capacity or resources to submit their ads properly. Others tell us that they can’t keep up with the changing guidelines. Many have submitted ads which were rejected and that left a bad taste in their mouths.
 
Typically advertising agencies that specialize in automotive dealerships will have a service that will handle this process. When selecting an agency that does this, try to find one with a motto similar to “We do the heavy lifting, so you don’t have to”. This likely means they have a turnkey solution and you won’t have to do much work. Some will charge a fee, however, the fee is usually nominal and by not taking advantage of co-op funds, you literally are leaving money on the table. In other cases you may be able to find Agency partners who are fully certified by the OEM such that all activities they manage for you are co-op approved. Many Auto Audience Network Certified Partners have taken the time to setup these relationships with your OEM and you should ask them for a list of “approved vendors”.


Remember, it’s in the OEM’s best interest that you sell more of their cars. Co-op is another tool that they provide you to do that. By taking advantage of this tool, you’re able to stretch your advertising dollars, reach more buyers and sell more cars.

What are some other interesting things you have learned about co-op funds? Or, challenges you’re facing. Share them in the comments.

Big Tom LaPointe
how many dealers are NOT using their co-op money? most i've been around pay closer attention to that wallet than their own kids...

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