The Brand’s Guide to Cooperative Advertising

They say two heads are better than one. And in many cases, that’s tough to argue with. Just think of Venus and Serena playing doubles, Simon and Garfunkel making music, or Ben and Jerry dreaming up ice cream flavors.

But does the same apply to businesses and their advertising campaigns? Could partnering with one or more brands or retailers for your next campaign lead to greater success and more sales?

This type of strategy is called cooperative advertising, and it can be a cost-effective way to reach new customers, but it is oftentimes misunderstood or not properly executed. To do it right, each party involved needs a clear roadmap for success.

In this article, we’ll explain:

  • What cooperative advertising is
  • Pros of cooperative advertising
  • Cons of cooperative advertising
  • How to create a cooperative advertising campaign

What is cooperative advertising?

Cooperative advertising, also known as cooperative marketing, is when multiple brands and/or retailers partner to create a promotion that benefits all parties.

For example, Treasure Cave (who produces specialty cheeses) collaborated with Frank’s RedHot (who produces hot sauces) in order to do a marketing campaign of cross promotions and custom recipes featuring both brand’s products. Working together, they were able to expand their reach and make it easier for shoppers to find their products. The 12-week campaign resulted in an increase in both base and incremental sales.

By partnering with other brands or retailers, you can leverage shared resources, insights, and funding to pursue mutual goals. There are a few basic types of cooperative advertising campaigns:

  • Between two brands: You are not direct competitors, but offer compatible products that customers of each brand may appreciate using (and buying) together.
  • Between a brand and a retailer: Both the brand and the retailer share a motivation to sell the same products.
  • Between multiple brands and a retailer: Get the best of both worlds by having two or more brands partner with a retailer for a cooperative advertising campaign.

Cooperative advertising comes with both pros and cons, but it’s well worth every brand’s consideration.

Pros of cooperative advertising

There are plenty of good reasons to consider creating a cooperative advertising campaign. Partnering with another brand or retailer can reduce costs, increase production quality, broaden your reach, and more.

Reduced costs

One of the biggest benefits of cooperative advertising is the fact that it frequently splits marketing costs between the brands and/or retailers involved in the collaboration, making promotional campaigns more affordable for them all. That said, it probably won’t be an even split of the costs, and a number of factors go into determining which parties pay what.

While there are no hard-and-fast rules, it’s common practice for the brands (or manufacturers) to provide the greater portion of financial contributions in cases where brands and retailers partner together. This has to do with the fact that it’s typically the brands who take the lead in initiating and implementing these partnerships—and retailers with strong catalogs may not be as motivated to promote your particular brand. But exceptions certainly exist, and in some cases, brands may end up paying nothing at all.

Another major factor is the recognizability and popularity of each involved party. If, for example, a major national brand partners with a small regional brand, the former brings a lot more influence to the table and may expect the latter to contribute more financially to make up for the disparity.

The details get sorted out during negotiations, and when all is said and done, each party should come away feeling like they are gaining more than they’re losing.

Increased production quality

Cooperative advertising can increase asset quality in several ways. For one thing, if costs are shared, then each party may have more funds available that they’re able to contribute toward a high-quality production. And with multiple parties all signing off on the final product, you’ll have additional sets of eyes available to spot mistakes, suggest improvements, and ensure a promotion everyone can be proud of.

For smaller brands, the difference in quality can be even more pronounced. When partnering with a bigger (and better funded) brand, they benefit from the tools and expertise the other brand is able to contribute.

Additional insights

All good marketing relies heavily on gaining insights. The more data you have, the better you’re able to craft a marketing strategy that taps directly into what your customers need, where they see your advertising, and how they prefer to make their purchases.

For most of your marketing campaigns, you’ll rely on the internal data you’ve collected on your own, as well as from external data supplied by third-party tools. But when engaged in cooperative advertising, the partnering brands or retailers all have the chance to share their internal data (at least as much data as is relevant to the campaign), giving everyone a more complete picture. Such insights from the other parties often represent data you’d never have had access to if you weren’t partnering with them.

With additional data to rely on, you’ll be able to fine-tune your approach even further, ensuring optimal efficiency for your marketing efforts.

Broader reach

Every brand and retailer has a specific audience and a unique media mix that they’ve cultivated. So when multiple brands and/or retailers work together, they gain access to the combined audiences of all involved parties, giving everyone a broader reach.

The smaller parties benefit from potentially much larger marketing channels than they’re used to, getting their products out in front of far more people than they’re typically able to do. And the larger parties are able to tap into the more niche and sometimes more loyal followings of smaller entities.

Positive associations

Think of a brand you really love—one from which you’re willing to try pretty much anything they offer because their quality, customer service, and overall experience is just that good.

Now imagine that brand partnering with a compatible brand you haven’t tried before. Something you know from experience you’ll love, paired with something your favorite brand promises you’ll love. At the very least, it makes a compelling offer, right? And that’s without even getting into the specifics of what is being offered.

Brand loyalty is contagious. When you associate a brand customers love with a brand they’re not familiar with, it makes an immediately attractive introduction to that second brand. And this works both ways. Each of the partnering parties will have loyal customers who aren’t familiar with—but are willing to try—whatever the other party has to offer.

Cons of cooperative advertising

Despite all the benefits, there are also a few downsides to cooperative advertising you’ll have to consider. These include brand erosion, strategic differences, creative conflicts, and contractual restrictions.

Brand erosion

To the extent that partnering with a well-loved brand can create positive associations for your brand, the inverse is also unfortunately true. If you partner with a brand that has a poor reputation, your own brand integrity could take a hit as well. This is especially the case in today’s age of heightened consumer consciousness around environmental, social, and ethical concerns.

Be sure to research potential partners well before collaborating with them. If they don’t have a great track record for quality or customer service, or if they’re frequently in the news for the wrong reasons, then you might be better off looking for a partner that’s more aligned with your values. The last thing you want is your customers asking, “Why are you working with them?!” The partnership can easily turn their problems into yours.

Additionally, even if the other brand has a solid reputation that you don’t mind sharing, cooperative advertising does run the risk of allowing customers to conflate your brand and theirs. You’ll need to make sure your own brand identity remains clear and distinct from the brand you’re collaborating with.

Strategic differences

When different brands partner together, or when brands partner with retailers, each party is going to have their own goals they hope to achieve from the partnership. At the most basic level, Brand A wants to sell their products while Brand B wants to sell their products. And while the retailer is happy to make a profit from selling either brands’ products, they’ll also have other products from other brands they want to sell.

These goals need not be in conflict with one another, but they do mean that each party is ultimately seeking their own best interests in the partnership. And this can lead to differences in which strategies each party pursues. Ironing out these differences must be a part of your negotiations.

Creative conflicts

Each brand and retailer will bring with them their own creative team, their own carefully crafted voice and style, and their own branding guidelines. And each party will have their own ideas for how the collaboration should go and what the final product should look like.

When working together, you’ll need to figure out which party will take the lead in any given area of creative choices. Each of you must be willing to do some give and take, so that everyone gets some say in the creative process. Make sure your brand gets to stand out appropriately while giving your partner(s) room to shine as well.

Contractual restrictions

There’s no other way around it—cooperative advertising is likely to include a lot of red tape. Each brand and retailer will have firm guidelines about how they want to be represented and what the other parties will be permitted to say about them. Each party is also going to come to the table with their own ideas about who is responsible for which deliverables, who’s going to provide the funding, and other obligations some party will be accountable for.

These things don’t need to be a problem so long as all parties stay on the same page. But you’ll need to pay close attention to what you’re signing up for to make sure you’re aware of any and all restrictions and obligations. It’s a good idea to consult an attorney before finalizing a cooperative advertising agreement.

How to create a cooperative advertising campaign

We’re going to split the process of creating a cooperative advertising campaign into six steps. You’ll need to research, connect, negotiate, collaborate, execute, and evaluate.

1. Research

As with any marketing campaign, the first stage of cooperative advertising involves a lot of research and planning. Try to answer at least the following questions:

  • What goals do you hope to accomplish with a cooperative advertising campaign?
  • What key performance indicators (KPIs) will you track?
  • What do you plan to gain from a partnership, and what do you have to offer your partner(s)?
  • What insights and advertising channels do you already have to work with, and which ones would you hope to gain access to?
  • Who are the compatible players you might consider partnering with?
  • Do they have a solid reputation?
  • Are there any red flags you should be aware of?
  • Do they have an established cooperative advertising program already in place, or will you have to propose it from scratch?

Use questions like these to narrow down your potential partner(s), and then get ready to reach out to them.

2. Connect

How you propose a new collaboration will depend on what, if any, processes the other party already has in place. If they’ve already established a cooperative advertising program, then follow whatever protocols they’ve published for communicating your proposal to them.

If not, it’ll be up to you to identify the right person at their company to reach out to. Once you’ve determined the best contact, send them your pitch. Provide enough details about what you’ll bring to the table for them to have a reason to take your proposal seriously.

3. Negotiate

If your partner likes your concept, it’s time to hammer out the details. This will likely involve some back-and-forth as each side spells out exactly what they’re willing to provide, what they intend to get out of the partnership, who’s going to pay for what, and what requirements and/or restrictions they’d like to have in place.

Be thorough at this stage. You’ll save a lot of headache down the road if you ensure that everyone is aligned. The last thing you’d want is to realize after it’s too late that there were unspoken expectations or desires that aren’t being met.

Once everyone is happy with the agreement (and has preferably had their attorneys go over it), you can move on to the real work.

4. Collaborate

The collaboration stage may look very different depending on the terms of the agreement you negotiated. In some cases, all parties will work hand-in-hand on the deliverables, and you’ll each get a glimpse into the creative processes of the other. In other cases, one party may have relegated the creative work to the other, requiring only a review and approval of the final product.

Either way, you’ll make use of shared insights you have access to in order to plan the perfect strategy to reach the target markets of all involved parties.

5. Execute

At last you reach the payoff. After all your hard work, you get to send your cooperative advertising campaign out into the world to see how it performs. Hopefully, if you and your partner(s) have played your cards right, you should be looking at some healthy returns for everyone involved.

Be sure to carefully track the KPIs for your campaign for the final stage—evaluation.

6. Evaluate

As your cooperative advertising campaign wraps up, you won’t have just made sales, you’ll have also gained new insights. And you can use what you’ve learned for future campaigns—whether cooperative or solo.

Perform a post-mortem analysis of the campaign that addresses questions like:

  • Did you meet your campaign goals?
  • What were your KPIs?
  • Did your partner(s) live up to your expectations?
  • Did you live up to their expectations?
  • Did any problems arise?
  • If so, how did you and/or your partner(s) address them?
  • Which party came out of the campaign with the most new sales?
  • Are you satisfied with the results of the collaboration?
  • Would you consider another collaboration with the same partner(s)?
  • What could you or your partner(s) do differently next time?

Develop a winning ecommerce marketing strategy

Cooperative advertising is one of many strategies a successful brand can use for ecommerce marketing, but there’s a lot more to know.

In The Complete Guide to Ecommerce Marketing, we walk you through everything you need to know to develop a successful long-term strategy that earns new customers and retains them. You’ll learn:

  • What the digital shelf is
  • Consumer shopping behavior
  • Why you need to invest in the digital shelf
  • How to prepare your digital shelf

Want to learn more?

Download the free ebook.

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