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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 the question “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!

by Keith Shetterly, Copyright 2012
www.keithshetterly.com  All Rights Reserved
keithshetterly@gmail.com 

Views: 1022

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Comment by Keith Shetterly on March 15, 2012 at 8:39am

AJ:  Yesterday was naturally "irrational", as 3.14 is National Pi Day.  :)

Comment by Keith Shetterly on March 15, 2012 at 8:05am

That's an excellent article, except for the crack at Saturn (near and dear to me).

Comment by Aj Maida on March 15, 2012 at 7:48am

OK so yesterday I was a little Cranky with my OEM. In todays Dealer Marketing Magazine Brett Stevenson talks about why we are cranky when they try to turn our Tier three advertising into Tier one advertising.

Comment by Tom Gorham on March 14, 2012 at 8:52pm

That woke me up! Thanks AJ!

Comment by Linn Boyd on March 14, 2012 at 10:12am

AJ:

I can fully understand your frustration, but actions like that are why the manufactures pinch down on the other dealers, if they want the key words ask them if they want it digitally at least. This may be a fun thing to do but sometimes this will hurt others.

Cheers,

Linn

Comment by Ralph Paglia on March 14, 2012 at 9:56am

AJ's comment is another illustration of one of the many reasons I LOVE THIS GUY!

Comment by Keith Shetterly on March 14, 2012 at 9:36am

AJ!!!  :)

Comment by Aj Maida on March 14, 2012 at 9:30am

So Chrysler wants a list of my keywords in order to reimburse us for SEM/PPC. So I am sending it to them. All 12,250 keywords and 245 pages. Hope they have fun!!

Comment by Matthew Smolik on March 9, 2012 at 7:51am

 Thanks Keith,

 I love the vendor who comes in and the first words out their mouth are "my product is IMR turnkey co-opable" boy sign me right up I don't care what it does how it can benefit me. Since it's co-opable it's like free money right.

Comment by Keith Shetterly on March 8, 2012 at 6:35pm

Thanks Brett!

Stan, you let it fly in that post about Internet Managers.  Truth in that, my friend, enough for fifty posts.

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