By Gary Ritkes
Total U.S. ad spending per year ranges between $140 billion and $170 billion depending on which statistics firm you believe. The amount of co-op ad dollars — promotional allowances made available to channel partners by national brands to subsidize the cost of local marketing — is around $50 billion according to National Registry Publishing. In other words, a sizeable chunk all U.S. ad spend is financed through co-op marketing programs that are specifically dedicated to regional and local marketing.
It’s clear that national brands are willing to spend a ton of money on advertising with and through their local channel partners to reach local consumers and drive channel sales. The concept is easy, but the reality of local marketing alignment between a national brand and its hundreds or thousands of channel partners is something much more difficult.
Brand and channel partner alignment is the eternal battle that every brand manager must face. With intelligent strategy, constant vigilance and an insatiable appetite for testing and measuring local marketing, brands can realize greater marketing alignment with channel partners. What’s the result? Channel marketing that works for the brand and channel partner, and wins more customers in local markets, increasing channel sales.
Let’s look at the three areas of focus when crafting a balanced marketing plan.
1. Defining the Stakeholders. The three primary stakeholders are the corporate marketing department, channel reps (when applicable) and channel partners. All three parties are responsible for structured communications that will inform project plans and subsequently determine the day-to-day activities of others. Not all channel structures have the intermediary layer of channel reps. In such cases, it is even more important for the brand and their network partners to systemize the back and forth of communications, assets, reporting, etc.
Getting back to the brand/channel rep/partner structure, corporate is responsible for digesting consumer insight aggregated at the channel rep level and developing the ad creative and content based on it, while at the same time researching burgeoning marketing mediums to reach consumers. Corporate beta tests new creative, new content / messaging and unproven (yet promising) local marketing techs in limited markets, then it makes available to partners what works.
Channel reps are the information consolidators and bridge between channel partners and corporate. They serve to make sure correct and concise, actionable local market insight is flowing up to corporate. Channel reps secondary function is making sure channel partners are motivated and see the value proposition in every marketing program offered by corporate.
Channel partners are obviously the customer-facing sales force that must ensure the correct implementation of local marketing programs.
With channel sales lots of things are happening simultaneously – that’s why alignment is so tough. Use the mantra “strategy before tactics.” Actionable tactics derived from strategy are executed with software tools that glean analytic data to further inform strategy, which breeds new tactics, thus maturing and aligning the whole marketing apparatus – you get it. Below is a checklist of ongoing processes you must have in place to mature and align your marketing.
On the corporate level:
On the rep level:
On the channel level:
2. Identifying the Technology Requirements. Very succinctly, the technology platform will touch four essential areas: (1) provide the operational tools to manage, house, and customize ad creative, (2) manage the disbursement of co-op funds (3) coordinate marketing in terms of approvals, campaign launch and fulfillment, and (4) offer turnkey online and offline marketing programs that run automatically on behalf of channel partners like triggered email/direct mail, local search, local ppc, landing pages and mobile sites, etc.
The technology checklist is:
3. Identifying Responsibilities of Third-Party Vendors. The days of brands building proprietary systems to handle channel marketing logistics and co-op fund management have long passed. Brands are dropping legacy technologies like bad habits — which they are. No one company can do everything a national brand would need to carry out joint local marketing with its network so how vendors are positioned in the brand/channel partner/end customer sequence is critical and delicate.
The vendor checklist is:
Some $5 billion to $7 billion in co-op funds are left on the table each year by channel partners according to a study by Borrell Associates. Poor alignment between brand and channel breeds partner ambivalence to the co-op programs that drive local marketing. That money is not spent locally and thus channel sales are weakened. Be sure to use the checklists above as a starting point to better align your channel and boost partner participation.
Gary Ritkes oversees all sales and account management at SproutLoud. He is an industry leader and innovator with more than 20 years of experience in graphic communications and marketing strategy. Ritkes has been involved with SproutLoud since the inception of the company. He was previously vice president of marketing for Rex Three Inc., SproutLoud’s first and largest vendor.