What is Co-Op Advertising?

By: Lavon Simpson

Co-op is a term that gets thrown around a lot in dealerships. Unfortunately, there usually aren’t that many people directly involved with the process and a lot of them have pre-conceived notions about what it is and how it works. Some people say it is “free money.” Some people think of it as simply a way to be reimbursed for your advertising by the manufacturer of the vehicles you sell. However, co-op is much more than that. Approaching it in any other way would do a disservice to your dealership and negatively impact your marketing efforts.


The main point of co-op, that most people miss, is that it is a joint advertising venture between the manufacturer and the individual dealers. The idea being that through cohesive marketing campaigns that lend themselves to legitimacy and consistency between the OEM and the individual dealer, they will have a higher conversion rate of potential customers into buyers.


Instead of having a totally different message, independent of the OEM, which makes you seem like a separate entity, use your co-op funds to create a similar piece that puts your dealership at the center of your OEM’s current campaign. If you sell Chrysler’s and they are pushing the 300 under the “Imported from Detroit” tag line, use that in your marketing but with your dealership’s information to let customers know that you are part of that campaign and to visit your dealership to see/purchase the vehicle.


Use your co-op funds to create a similar piece that puts your dealership at the center of your OEM’s current campaign.


Many dealerships say they don’t have money to advertise, but in working through a co-op program they could have their marketing reimbursed up to 100%. Each year, there is an estimated $7-8 billion in co-op funds available in the automotive industry. It is estimated that only half of this money is ever claimed.


So, what can you do? Be aware of your OEM’s co-op program. Learn about the advertising guidelines so that you can ensure that you will be compliant and reimbursable. Work with a vendor (like PERQ) who has a staff of people who know your OEM’s co-op guidelines and can secure those funds for you.


Sometimes, the rules of co-op can seem tedious or overwhelming, but remember that the OEM is just trying it’s best to promote consistency and protect the brand identity that they have spent years building and promoting.


Following these guidelines will help you advertise for your store in a way that will lend credence to your message and business. It will aid in helping to convert more potential customers into buyers. Lastly, it will establish to the customer that you are an arm of the OEM and can be trusted.


If you have any questions about co-op, feel free to leave them in the comments below or visit www.perq.com/co-op. We’re more than happy to help!