Co-op Marketing Software

Product Launch Marketing - Integrating Co-op and MDF

Friday, March 5, 2010 by Shane Vaughan

One of the products Balihoo delivers to our customers is a complete Co-op marketing solution.

As we've discussed this offering with multiple product manufacturers and how it fits into their overall trade promotion marketing efforts, one of the surprising things we've discovered is how often it's not integrated with their product launch marketing efforts.

The objectives are simple - when you launch a new product into the market, it's critically important that your dealer network is informed and prepared to effectively market that product at the local level. Many manufacturers do a great job of this from a product availability, training and sales perspective. However, we're discovering that this is often not the case when looking at their co-op marketing program.

Enabling your dealer network to effectively market your new product at the time of launch is one of the most overlooked areas we've discovered. Combining your national efforts with strong local efforts creates a product launch marketing effect that is highly effective.

The advice is simple: when launching a new product, integration with your co-op marketing solution should be near the top of your list. Effective co-op marketing can be the key differentiator between a lackluster product launch and a highly-successful one.

In fact, we believe so strongly in this that we've been offering our co-op marketing software to some manufacturers as a point-solution to support a single product launch. It's a great way for them to try it out while at the same time supporting their product launch marketing effort.

Interested? Check out our Integrated Co-op Marketing whitepaper or contact us to find out how we can help.

Head Skis. Ever heard of them?

Wednesday, February 24, 2010 by Jason Hausske

Like many consumers around the world, I've been watching the Olympics on a daily basis.

My routine for the last week has been to relax in my family room, with my dog at my feet, the fire burning in the background, multi-tasking between my work on a small laptop perched against my knees and maneuvering through a day’s worth of DVR captured Olympic coverage.

Given my full schedule, I've had to be selective in my Olympic viewing. Have I had time to watch cross country skiing? No. Do I pause to catch the latest curling match? No.

And, of course… with four quick clicks of the yellow, "skip ahead" button on my remote, I bypass the commercials.

That being said, there are two brands that have jumped out at me…. Fischer Skis and Head Skis. I've never Nordic skied, so I can't comment much on Fischer other than to assume they have a big market share in Nordic skiing, evidenced by the big yellow Fischer Ski logos prominently displayed in every possible slow motion angle on Ski Jumping.

I do know Alpine skiing however. Head Skis has me puzzled. They've received some great coverage in these Olympics. Lindsey Vonn and Bode Miller both ski on Head skis, which is evident to us consumers during slow motion replays, end-of-race interviews, and reporter commentary on ski equipment.

Now, I've been a consumer of ski equipment for a long time (I ski weekly, I used to ski instruct, etc.)… and I'm now a consumer of ski equipment for my two daughters as well (and will be for another ten years)…. If you asked me to name fifteen ski brands, Head would not have made the list.

Why is that? I did a search on Bing (and on Google) for "Head Skis Boise" to see where in Boise one might be able to go check out a pair of Head skis. Based on the lack of search results, it's logical to infer that buying Head skis in Boise is not an option. Upon further laborious research on the Head website, I finally determine there are two retailers of Head Skis in Boise. One of which is Greenwood's Ski Haus. (I happen to coach soccer for one of the owner's daughters).

So, my questions are:

How is Head leveraging this week's Olympic coverage?
Why doesn't Head have more consumer share of voice?
How is Head going to convert consumers like me into revenues and raving fans?

Head is apparently banking on establishing a relationship directly with the consumer, through their website, social media, etc. They seem to lack interest in marketing to individuals on a local basis via their specialty retail channels (they aren't alone).

I'm a fan of direct brand-to-consumer relationships, but I believe there is a massive opportunity for brands like Head to build market share and to more effectively market locally via their specialty retailers. Most brands just struggle with the complexities of making that a reality.

Here is a very basic, simple example of a local marketing idea that could be utilized by a brand like Head.

Head produces a professional direct mail marketing template that features Head products/brand messaging on 50% of the piece. The other half of the ad can be branded by the local retailer. The message of the piece leverages the recent success of the Olympic athletes.
The direct mail is mailed to a highly targeted demographic list of local consumers, and has a call to action to drive the consumer into the store.
Head agrees to pay 75% of the marketing costs of the direct mail, which means the retailer is getting 300% more marketing exposure for their marketing dollar than if they'd tried to market without the help of Head.
Head sells more skis, Head builds market share, the retailer captures more customers and revenues, the consumer is excited because they have the same brand of skis that the Olympic skiers use.

Based on my experience of talking to many new brands each month about their marketing, brands have many (historically legitimate) reasons why local marketing is a challenge. These reasons happen to be the same with every brand I talk to.

Local retailers lack marketing expertise and are overwhelmed with the myriad of marketing media available.
Brands have offered to do this for their retailers in the past, and the retailers only use 40% of the money available to them.
Administering this "co-operative advertising" process is a real challenge for the brand and a deterrent to the retailer
The brand's CFO is putting tremendous pressure on the marketing organization to reduce their co-op/mdf marketing spend. Obviously because there is no ability to measure a positive ROI (otherwise, they'd want to invest more, correct?)

Suffice it to say, these reasons are no longer valid (at least, not for Balihoo's clients).

There should be a race by brands to harness the local marketing capabilities of their specialty retail channels to build customer market share on a very intimate/local basis…. Head, K2, Atomic, Rossignol, Salomon, Blizzard, Nordica… the first one to figure this out will have a unique competitive advantage.

Will Head's revenues increase as a result of the success of their Olympic Athletes? Probably…. Will it be exponential and will they become a market share leader for years to come? Potentially, if they crack the code on how to leverage their specialty retail channels to drive local marketing.

Want to learn how? Check out our Local Marketing whitepaper or our Co-op Marketing whitepaper, they can get you started.

Kewords: trade promotion marketing, local advertising, local marketing ideas, local marketing software, co-op marketing software.

Co-op Advertising the Product Placement Way!

Friday, February 5, 2010 by Alex Fascilla

Perhaps the least hackneyed, most unforced example of product placement advertising I've ever seen appeared in the movie that made the phrase "that's what she said," famous. "They made a 'The Office' movie?!" You wonder excitedly, if not a little clumsily because of the whole "a The" part. No, there is no 'The Office' movie... But there will be, relax. The movie I'm referring to is the impeccable 1992 comedy--yes kids, 'that's what she said' is 18 years old and still alarmingly funny--Wayne's World. In one particular scene, we find Wayne quickly cycling through the product-placement agreements the movie was committed to feature as he damns those that--very similarly--"sell-out" to big business. Note Garth's Reebok get-up. I'd pay hundreds for it if I could find it on eBay.

So what's new in the product placement arena these days? Well, shucks, if you have a feeling it's become a new form of co-op advertising, you'd be correct. See, whereas Pepsi, Pizza Hut, and Doritos probably plunked down hundreds of thousands of dollars for each of those blatantly--but remember, that's why they were effective--shameless plugs that were so "seamlessly" integrated into Wayne's World, advertisers lately have pulled off product placement at virtually no cost to them. How? Well, as MediaBuyerPlanner recently reported, via a co-operative structuring.

Oscar bait and recent Clooney showcase, Up In The Air features American Airlines and Hilton Hotels placements almost as much as it does Clooney's muse (and Best Supporting Actress nominee) Vera Farmiga. The deal? Well, as the article outlines, hotel stays for the cast and crew and plane rentals for in-plane scenes were on the house--paid for by none other than Hilton and AA, respectively. In return, of course, they'll enjoy all the benefit those product placements produce--on that note, I assume they'll accrue more benefit as the movie continues to grow in popularity given the recent Best Picture nod. Although, as a media planner, I wonder how you measure ROI on product placements... hmmm... *stroking chin* Interesting medium...

Is this the typical sort of thing we'd be able facilitate in Balihoo's co-op marketing software platform? Perhaps. We currently facilitate co-op advertising for more traditional mediums like TV, radio, magazines, etc. But why not add product placements? I'd love a crack at negotiating a client's request to product place in the next Nicolas Cage bomb. Daydreams aside, it's an exciting time for the co-op model--and startups like Balihoo that foster collective ad spending--as firms discover increasingly inventive ways to band together in their marketing efforts to the benefit of all involved!

So as I calmly slip into daydreams once again as Paparazzi by Lady Gaga blares in my ear buds, I imagine calling Gaga's producer, urging him to change the chorus to "Pe-Pa, Pe-Pa-Roniiiiii" in exchange for a lifetime of stuffed-crust pizzas to the satisfaction of recent client Pizza Hut and of course a very stuffed-crust-loving Lady Gaga. Now that's co-op advertising!

Hope for the Rebate

Thursday, January 14, 2010 by Kelly Mason

I don't know about you all, but if I find something I want that's a great price, but then upon a closer look I see that the great price requires the dreaded "mail-in rebate", I will set it right back down. Think about that. I've already evaluated the product enough to know that A) I want it and B) I'm willing to pay the price, and after a couple seconds of evaluation, I can put it right back down, walk away and never look back. (Well, maybe look back, but only once).

One word: Experience. I know, from experience, that I will pay what I deem to be too much for that product, and then I'll go home with big plans to get the cash that is rightfully mine back into my pocket where it will burn a hole until the next can't-beat-it deal comes along. But what will actually happen is that I'll get home and start playing with my new purchase. I'll remember my rebate a while later, and attempt to cut out the UPC code, and then I'll soon realize that my kitchen scissors won't be able to handle the job. So I'll put the box in a 'safe' place and continue playing, with a plan to dig the box cutter out of the garage in the very near future. What happens next is always a little fuzzy. I clean out my purse and ditch what appears to be a worthless receipt. My 'safe' place to store the box will turn out to be a 'hiding' place - from myself. And as a fairly frugal consumer, I'll remember 6 months later and get a pain in my stomach when I realize my money is burning a hole in someone else's pocket and there's nothing I can do about it.

Now, imagine you're a small business owner and the purchase is a year's worth of local advertising. You have a shoebox full of receipts, and instead of one UPC codes, you're cutting ads out of newspapers, magazines, and radio tapes as your proof of performance. Balihoo has designed a co-op advertising solution that redesigns the rebate experience.

Through Balihoo's co-op marketing software program, franchise owners can do it all in one place - select and customize the creative, place their ad in various publications, pay the total costs and yes, receive their rebate RIGHT AWAY. No box cutters necessary. No need to clip ads. Because all the required information needed to get that refund is housed right inside the ad builder software. The system calculates the total, reduces it by the subsidized amount, and then only charges the affiliate - get this - what they OWE! But you know what else happens? People make the purchase! It's what they call a win-win.

As a product specialist, I feel proud to see a co-op advertising solution that works the right way for our users. And as a rebate-repelled consumer, I feel hopeful that the current way isn't the only way.

Balihoo Partners with Trade Promotion Management Association (TPMA)

Thursday, January 7, 2010 by Shane Vaughan

Here's a press release we sent out earlier today:

Balihoo Partners with Trade Promotion Management Association (TPMA)

Leading co-op marketing software provider joins the premier membership organization dedicated specifically to the practice of trade promotion marketing

Boise, ID (Jan. 7, 2010) — Balihoo, the premier provider of Local Marketing Automation technology and services to national brands, announced today that they have joined the Trade Promotion Management Association (TPMA).

“With the launch of our Integrated Co-op Marketing Solution, it simply makes sense to partner with the leading industry organization in the market,” said Pete Gombert, Balihoo’s CEO.

Balihoo’s solution combines creative customization, local media execution and co-op funding into a single Integrated Co-op Marketing platform to give product manufacturers and their resellers a single location to manage all co-op marketing activities. Embedded in Balihoo’s Local Marketing Automation platform, this represents the industry’s first closed-loop co-op marketing solution that functions across all advertising and marketing mediums.

“TPMA is very pleased that Balihoo has chosen to join. Our members include many of the most innovative and highly-regarded service providers in the trade promotion space, as well as leading retailers and their suppliers. Balihoo will fit right in,” said Bob Houk, TPMA Executive Director.

In addition, Balihoo has announced the availability of a white paper: Integrated Co-op Marketing White Paper; Translating National Strategies into Local Execution.

Outdoor Adventures in Co-op Advertising

Tuesday, December 22, 2009 by Brian King

Like most people in Boise, I’m an outdoor enthusiast. It’s a big part of why I chose to live here. With a love for outdoor activities comes the insatiable thirst for top of the line gear. Sure, call me a gear-head. Self admitted.

When it comes to purchasing the latest and greatest outdoor gear, I automatically gravitate to REI for two simple reasons. One, their customer service is second to none. And two, I’m a member of the REI co-op program. REI was established as a co-op providing members with an annual dividend check formulated from the member’s total purchases throughout the fiscal year. The use of co-op for retail stores is a simple concept that has worked incredibly well and is best seen by REI’s history of steady growth in a crowded retail sector.

So if it is so simple, why aren’t more brands using co-op for their retail distributors the way retail distributors use co-op for their customers? Easy answer. It’s too damn complicated. The paperwork and filing process associated with co-op reimbursement for distributors has been so cumbersome that, oftentimes, retailers will leave eligible dollars on the table at yearend simply because the co-op marketing program wreaks havoc on the retailer’s cash flow by the time they are finally reimbursed. The concept of co-op advertising works so long as it is easy to use and straight-forward.

Enter Balihoo’s new Integrated Co-op Marketing Solution: An easy solution to enable effective co-op marketing at a local level. For fun, let’s play out a brief scenario to show just how powerful co-op marketing can be.

Brand X releases a new lightweight soft-shell jacket with state of the art fabric technology and happens to offer a 75% co-op for all advertising dollars spent by retailers promoting the product. Brand X does this via Balihoo’s new solution. Retailer, REI in this scenario, decides to run a strategic local advertising campaign at their Boise location that features a co-branded advertisement with Brand X’s new product and REI’s logo. And for the sake of this story, the ad happens to be localized via Balihoo’s local marketing automation tool (yep, all located in the same online portal). Brand X loves this because their product is being marketed at the local level. REI loves this because it is simple and Brand X is helping pay for the ad real-time, meaning that there is no waiting or messy paper work associated with receiving reimbursement. Co-op is applied at the time an order is placed and full transparency is seen by all parties involved.

…Along comes a gear-head such as myself. I see the ad, and go to REI to check it out because I trust the retailer and the products they sell. Oh, and did I forget to mention that I go to REI because I love the REI member co-op program? I purchase the product, and go figure, I use my REI Visa to purchase the coat because it increases my eligible co-op amount on the product and thus results in a larger yearend dividend. I then receive my dividend check and the whole process starts over when I see another co-branded REI ad promoting a new Brand Y cycling shoe that REI just started selling. And guess what? Brand Y is offering a 90% co-op.

To sum it up, much like retail stores can drive consumer behavior via co-op, brand’s can drive retailer behavior using the same simple concept.

Co-op advertising. It’s a beautiful thing.

Tags: Channel Marketing Software, Co-op Advertising, Co-op Marketing Software, Co-op Marketing Solution, CRM Marketing Automation, Retail Marketing, Sales Promotion Marketing, Trade Promotion Marketing

Integrated Co-op Marketing Whitepaper

Monday, December 21, 2009 by Shane Vaughan

For those of you involved in Co-op advertising or co-op marketing programs, I wanted to make you aware of a new whitepaper we have entitled, "Integrated Co-op Marketing."

You can access the whitepaper here: Integrated Co-op Marketing

The overall concept of the whitepaper is that organizations who integrate the creative and financial components of their co-op marketing solution see significantly increased results from their channel marketing program. We believe that by deploying sophisticated co-op marketing software an organization can dramatically increase reseller participation and success in their co-op marketing solution.

Marketing software tools, specifically co-op marketing software, have made significant strides in recent years and this whitepaper will help you understand how to identify and deploy the most effective co-op marketing solution.

Would love to hear any feedback!

The Evolution of Sales Promotion Marketing

Monday, December 14, 2009 by Shane Vaughan

Sales promotion marketing, using co-op advertising funds, has typically been a very promotional-based type activity. The brand builds the ad, in which the retailer plays a minor role, then a print ad builder is used to customize it for the retailer.

However, as suggested by this Ad Age article, Walmart is taking a unique spin on these ads. They're focused more on the product itself, with the retailer taking the back seat in terms of visibility. It suggests that because Walmart has established a positioning of low-price leader, they're able to run these more brand-based (or product based) ads without the need for a heave dose of sales promotion marketing messaging.

While interesting in and of itself as a general trend, I think it's important for product manufacturers to consider how this could play out in their co-op advertising programs. Specifically, manufacturers need to consider the role their creative and creative templates play given this information.

Our recommendation to clients of our co-op marketing solution is that they need to develop creative templates that allow for a spectrum. At a very basic level you can create two versions of your product ad - one where the retailer plays a starring role and one where the retailer plays a minor role. Then, fund these templates at different levels (for example, 25% co-op for one version and 50% co-op for the other). Approaching it in this fashion allows the retailer to implement their sales promotion marketing efforts in the manner the best suits them and they're rebated at a level that is comfortable to the product manufacturer.

Of course, this approach assumes that you have a print ad builder (or other mediums) implemented in your co-op advertising program that can manage this level of specificity. Balihoo's channel marketing software can handle that, I hope yours can too.

Balihoo Announces Integrated Co-op Marketing Solution

Tuesday, December 8, 2009 by Shane Vaughan

Note: This post originally appeared on the older Balihoo blog on 10/27/09.

JUST in case you missed our announcement on PRweb or our News section (we like to be thorough) I wanted to let everyone know that we have some pretty exciting news today - we’re announcing the wide availability of our Integrated Co-op Marketing Solution.

This is a big deal for us - we’ve had co-op functionality in our system for awhile, but for the first time we’re packaging it up nicely and making it widely available to all of our customers (and potential customers). I’ve seen firsthand the delight on a reseller/distributor/franchisee face the first time they log into this co-op marketing solution and realize that they can manage both the creative and financial ends of their co-op advertising spend through one easy system. The time savings and cost savings they realize are immediate and significant.

And for the national brand running the co-op advertising program - the biggest deal here is the visibility they have into what’s going on at a local level. Imagine being able to completely understand the local support of a product launch BEFORE it’s launched. Or, view marketing activities at a local level to understand what’s working for your affiliates. Invaluable.

If you want to learn more about using a centralized system to manage a co-op program, check out our Integrated Co-op Marketing Software whitepaper at: www.balihoo.com/icm

OK, enough about us, back to our regularly scheduled programming……

Co-op advertising or MDF advertising: Who cares?

Tuesday, December 8, 2009 by Shane Vaughan

NOTE: This was originally posted on the older version of the Balihoo blog on 10/20/09 by Marcie Blagden.

Here’s an interesting blog posting - Co-op or MDF: Who cares? in which the author discusses the differences between Co-op advertising and MDF advertising programs and analyzes the current trend of manufacturers to move more towards MDF-based programs.

I agree with the author here – who cares as long as it’s successful?

Regardless of the format of the program, more time and attention needs to be placed on building programs that are easy-to-use (both for manufacturer and distributor) and ultimately successful in the marketplace. The MOST successful co-op advertising programs minimize the administrative efforts required by both parties while maximizing the return-on-investment (and time) of dollars placed into the system.

It’s Called ‘Co-op Advertising’ Because it Requires Coordinated Cooperation

Thursday, December 3, 2009 by Shane Vaughan

Co-op marketing solutions and co-op advertising program can be incredibly valuable and effective; however, unless they are clearly executed by all involved parties they can be reduced to simply an additional headache that never seems to perform quite as desired.

Consider the following:

Do you really believe your co-op advertising budget is being well spent?
Can you guarantee coordination of timing and messages for product launch marketing efforts?
Are your resellers spending more time complaining about delayed reimbursements than working to achieve results in your upcoming key selling season?
Have your competitors started to outflank you with more effective co-op advertising program - even though they offer an inferior product?

Co-op Marketing Strategies: Building a Better Co-op/MDF Program
View more presentations from Balihoo.

Tags: Channel Marketing Software, Co-op Advertising, Co-op Marketing Software, Co-op Marketing Solution, CRM Marketing Automation, Retail Marketing, Sales Promotion Marketing, Trade Promotion Marketing

Co-op and MDF Programs - Adoption is your key Front-End Metric

Thursday, December 3, 2009 by Shane Vaughan

Note: This post originally appeared on Balihoo's old blog on 11/17/09

The Trade Promotion Marketing Association (TPMA) reports that there are approximately $50B in co-op/MDF dollars available in a given year, while only $30B are actually used. This means that 40% of the dollars that manufacturers make available to their channel to drive local demand generation go unused.

Let me rephrase that - manufacturers offer free money to resellers to drive their business and it’s only accepted 60% of the time. Does that sound right to you? Does that sound like an effective co-op marketing solution?

As channel and trade managers, you should not accept this as the due course of business. My belief is that adoption rate - the % of your resellers eligible for your co-op program who actually engage - should be the key front-end metric you measure to understand the value of your overall co-op marketing solution. No, it certainly won’t replace the key back-end metrics of revenue and ROI, but on the front-end it is the main thing you should be looking at in your co-op marketing software. Why? Because your adoption rate can tell you so much about your program.

Getting a deep understanding of your adoption rate (over time) can help you understand:
- Are my salesforce engaged and being ambassadors for the program?
- Am I effectively communicating the program?
- Is the program easy-to-use?
- Am I providing enough flexibility within the program?
- Is the creative valuable to my partners?

So - tip of the day - track your adoption rate. If you see it anywhere below around 80%, you should be taking a deep dive to understand why your resellers are not taking advantage to move their business forward. FYI - your co-op marketing software should be able to help here!