FOR NATIONAL BRANDS WHITEPAPER WHO SELL THROUGH LOCAL CHANNELS

INTEGRATED CO-OP MARKETING

PAPER INTENDED FOR:

BUYING STAGE: Education AUDIENCE: Responsible for Co-op Marketing or Channel Marketing FOCUS: Components of Integrated Co-op Marketing Benefits of Integrated Co-op Marketing Solutions ROLE: Decision Maker Influencer

Local Marketing. Automated.

ENABLING EFFECTIVE CO-OP MARKETING

As a product manufacturer reaching your customers through a reseller network, you know its critical to coordinate and leverage marketing activities with them. More than ever your marketing budgets are under scrutiny, while at the same time theres ever-growing pressure to achieve sales goals. One of your major expense line items is likely your reseller co-op marketing budget.

ASK YOURSELF THE FOLLOWING QUESTIONS:

Do you really believe your co-op budget is being well spent? Is the management overhead required for your co-op budget and planning process out of balance, in itself limiting the co-op marketing you can accomplish? Can you execute reseller marketing programs within the short timeframes demanded by todays dynamic and hyper-competitive markets? Can you guarantee coordination of timing and messages for product launches?

Are your resellers spending more time complaining about delayed reimbursements than working to achieve results in your upcoming key selling season? Are resellers receiving co-op payments for activities they cant even remember doing? Are the compliance and auditability challenges of your co-op program leading to undue administrative attention, and less focus on selling? Have competitors started to outflank you with more effective co-op programs, even though they offer an inferior product? Are you concerned about how your resellers represent your brand in their local markets?

IMPROVING YOUR CO-OP MARKETING PROGRAM LIKELY REPRESENTS YOUR SINGLE LARGEST REVENUE OPPORTUNITY
Marketing at the manufacturers level has become notably more sophisticated in the past decade with cascading closed-loop planning processes, Return On Marketing Investment (ROMI) metrics, and near-realtime program tracking facilitated by the Internet. However, the tools and controls available for managing co-op marketing have generally lagged behind. And this is true despite the fact that the reseller marketing activities supported by your co-op funds are typically closest to the customer and are critically important to brand communications and demand generation. One of the major challenges facing manufacturers marketing teams in their efforts to make reseller co-op marketing more effective is at the very heart of what defines the century-old co-op marketing concept -- the coordination and execution of programs and financial transactions across two separate organizations. Today, when the manufacturer is working with hundreds if not thousands of different resellers, the scale and breadth of the effort can be overwhelming. However breakthroughs are not only possible today, but quite achievable by applying specialized and fully integrated technology solutions, bringing co-op marketing management into the modern age.

INTEGRATED CO-OP MARKETING - FOR NATIONAL BRANDS WHO SELL THROUGH LOCAL CHANNELS

Short of applying integrated technology solutions, manufacturers often fall into a mix of these following traditional methods and practices: Develop and distribute Co-op Kits Often due to the challenge of supporting a large reseller network, manufacturers resort to this classic spray and pray model. Resellers receive a package containing a situation brief and creative assets (either in the package or via a link to a web site containing static, centrally prepared content). Resellers customize from there, finding their own vendors, developing their own marketing plans, negotiating media rates, etc. Skills which smaller resellers often lack. Additionally, these steps consume a major portion of total co-op funding and actual execution that reaches the consumer may represent a shockingly low percentage of the total money spent. Manufacturers are often frustrated when they see their carefully researched messages, graphic designs, and even basic selling points lost in the process, and execution is often weeks or months later than desired. Resellers know they will be at least partially reimbursed for their expenses but this process is often unpredictable in amount and timing. Worst case? They may not get reimbursed at all because the activity was off message or not in brand compliance. Multiple Creative Platforms The second common approach for co-op marketing programs sees the product manufacturer contracting with multiple media vendors to deliver marketing solutions to their resellers. Often represented as a series of medium-specific web portals, this requires that resellers work with multiple fulfillment-specific vendors for each medium (direct mail, pay-per-click, online, TV, etc.). Although a step in the right direction, this approach places the burden of executing a true integrated marketing campaign on the reseller while also tying them to specific fulfillment vendors. When new media vehicles are added to the mix, it requires the manufacturer to create an additional portal and the reseller to establish yet another vendor relationship. Finally, this method does not address the critical financial component of giving both the manufacturer and reseller clear visibility into the co-op reimbursement process, requirements and system. Centralized program development, planning, and execution Another approach sees the manufacturer managing the marketing material development, strategic media/marketing planning, and local-level marketing implementation. The challenge here is that it largely removes the input, expertise, and involvement of the reseller to affect their local demand generation efforts. The burden is on the manufacturer organization, requiring adequate staff numbers with appropriate competencies to develop these pre-packaged programs for the reseller network something not typically within marketing head count and expense budgets. On the positive side, this approach can lead to timely execution on strategy with well characterized expenses, and with predictable reseller reimbursement models. Each of these three approaches has their own strengths and weaknesses, however none completely meet the needs of both the manufacturer and reseller. The ultimate challenge and goal is to integrate the Co-op funding process with the management and distribution of creative assets, media and marketing planning and program execution activities to create a seamless Integrated Co-op Marketing Platform.

INTEGRATED CO-OP MARKETING - FOR NATIONAL BRANDS WHO SELL THROUGH LOCAL CHANNELS

WHAT IS INTEGRATED CO-OP MARKETING?

Integrated Co-op Marketing is a software-plus-services solution that functions across all mediums to allow manufacturers to translate their national marketing strategies into reseller execution.

INTEGRATED CO-OP MARKETING MODEL

Integrating these two worlds together with technology and automation: Shortens marketing planning and execution timelines with better use of creative integrated across all media Reduces burden on manufacturer in managing the co-op funding and reimbursement process Improves reseller satisfaction and execution by increasing predictability of co-op reimbursement process.

INTEGRATED CO-OP MARKETING - FOR NATIONAL BRANDS WHO SELL THROUGH LOCAL CHANNELS

IMPROVING THE CO-OP REIMBURSEMENT CYCLE

THE TRADITIONAL WAY

[Like a Mail in Rebate]

Reseller

THE INTEGRATED CO OP MARKETING WAY

This takes days or weeks

[Like an Instant Rebate]

Reseller

Manufacturer Initiates Co-op Marketing Program Creates and distributes Co-op Kit

Manufacturer

This takes months

Validates Brand Compliance Reviews Proof of Activities Approves or Denies Claim

Plans and executes marketing program Submits proof of program and reimbursement claim Receives reimbursement payment Compares to what they claimed. If less then initiate complaint

Initiates Co-op Marketing Program Populates Integrated Co-op marketing system Integrated Co-op Marketing System (No manual reviews required.)

Plans marketing program Integrated Co-op Marketing System instantly validates Brand Compliance and Proof of Activity and calculates Reimbursement amount Executes Marketing Program Receives reimbursement payment as calculated when program was designed.

Built from key elements of an enterprise class closed loop marketing process, Integrated Co-op Marketing adds and integrates financial functionality that characterizes, structures, and manages funding planning, approval, and reimbursement with the reseller. Integrating the creative and the financial worlds is the breakthrough in driving effective co-op marketing and is made possible by technology and automation. This financial component is integral to all forms of co-op marketing, and its automation moves the world of manufacturers and resellers into the instant rebate era, compared to the mail-in rebate traditions of the past. Execution is greatly accelerated and easily coordinated across all media at a lower cost meaning more of the total co-op spending shows up in front of consumers. In an Integrated Co-op Marketing model, the manufacturer provides all required tools for local marketing success including: brand guidelines, creative assets, marketing planning, best practices, and customer data. They also provide reseller co-op financial guidelines around funding levels and reimbursement rates. The Integrated Co-op Marketing platform provides the mechanism where the reseller can access the creative, customize it, cost out different campaign executions, see their available co-op marketing fund pool and reimbursement rates, and receive instant approval from the manufacturer on a program.

Breakthroughs yield incredible benefits for the national marketing team. They see their creative and marketing plans being executed by their resellers and have complete visibility to timing and media execution. The resellers can more easily assemble integrated programs at lower cost with less burden on their marketing and sales teams, and they now have a totally predictable co-op reimbursement system. And, all of this results in more profitable sales.

INTEGRATED CO-OP MARKETING - FOR NATIONAL BRANDS WHO SELL THROUGH LOCAL CHANNELS

COMPONENTS OF INTEGRATED CO-OP MARKETING

When considering implementing an Integrated Co-op Marketing solution, there are five primary components to address:

DISTRIBUTION & CUSTOMIZATION OF ASSETS

Distributing creative assets to resellers should be quick and cost effective for the national brand. Local customization of these creative assets should be simple and inexpensive for the resellers across all mediums. Placing the burden of local media and marketing planning on resellers results in marketing campaigns that are often non-strategic and ineffective. Providing enterprise-class media and marketing planning at the local level can increase reseller ROI by 30% or more. Engaging with multiple fulfillment and media vendors across mediums is a daunting and time-consuming task for resellers. An effective Integrated Co-op Marketing solution will manage all vendor negotiation and interaction to ensure resellers are receiving the best quality at the lowest price. Tracking marketing performance at the local level is imperative to driving positive local marketing ROI. Aggregation and reporting of all marketing activity and platform adoption provides business-critical information to the manufacturer. Imagine having total and real time visibility to reseller activities around a product launch! A manufacturer will know all is well or we need to re-energize our plans as the launch approaches, not weeks or months after. Real time tracking and presentation to the resellers of their available co-op funds, reimbursement rates on planned activities, payment status, along with integrated and instant program approval functionality. This gives the resellers a certainty and predictability to their finances and reduces their internal overhead in tracking expenses and payments. Applying technology to integrate the financial and creative aspects of co-op marketing is a long needed breakthrough in improving effectiveness.

LOCAL MEDIA & MARKETING PLANNING

LOCAL MEDIA & MARKETING EXECUTION

MEASUREMENT & REPORTING

CO-OP FUNDING

Built on a base of existing brand stature and CRM/Customer data, these components work together to provide a comprehensive Integrated Co-op Marketing solution that brings world-class media and marketing to resellers.

BENEFITS OF INTEGRATED CO-OP MARKETING SOLUTION

Organizations that implement an Integrated Co-op Marketing Solution realize numerous benefits: More affiliates engaging in a more effective co-op program at a lower total cost (ROI/optimization) Significantly reduced marketing production costs for affiliates Easy to both access and customize marketing materials across all mediums End-to-end fulfillment at the best prices Strategic marketing guidance at a local level improves ROI of local demand generation efforts Streamlined process takes significant time and effort out of approval/reimbursement processes Leverage national buying power for local marketing execution Affiliate marketing efforts are always in concert with the national brand and perfectly timed Customizable templates lock-down branded elements Ensure reseller marketing activities align with key national initiatives Clearly see WHO is doing WHAT and WHEN across your entire reseller network Share best-practices across the entire network Integrated local campaigns Greater share-of-voice with customer Lower admin and media costs puts more of your co-op dollars to work driving local demand gen Apply marketing expertise locally for best-performing programs Access to aggregated local marketing reports Timely aggregated local marketing reports eliminate one-off results reporting from partners Use local analytics to identify in-market trends and improve campaigns

INTEGRATED CO-OP MARKETING - FOR NATIONAL BRANDS WHO SELL THROUGH LOCAL CHANNELS

CLOSING
Integrated Co-op Marketing is a solution whose time has come. Until now, even with the complexity added by an increasing number of co-op marketing options, managing the co-op marketing process has not progressed at the same rate that technology has enabled improvements in other marketing management functions. Applying technology and automation to this function delivers the key benefits of dramatically simplifying the process for both manufacturer and reseller while at the same time making co-op marketing efforts more effective at the local level.

ABOUT BALIHOO
Balihoo is the premier provider of Local Marketing technology and services to national brands with local marketing needs. Balihoo brings enterprise-class marketing to the local level and gives national brands full visibility into all local marketing activities and results. For more information on Balihoos Integrated Co-op Marketing solution please visit us at www.balihoo.com

Local Marketing. Automated.

866-466-9914 sales@balihoo.com Balihoo.com @Balihoo

2011 Balihoo, Inc. All rights reserved.

INTEGRATED CO-OP MARKETING - FOR NATIONAL BRANDS WHO SELL THROUGH LOCAL CHANNELS