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There should be a section in your rate card about co-op advertising. Co-op, short for cooperative advertising, is advertising that a local advertiser runs that promotes a certain manufacturer's products in return for the manufacturer reimbursing the local advertiser part if not all of the cost of the ad.

Almost all of the big electronics and appliance ads you see in the newspaper are co-op ads. The local advertiser usually gets a certain fixed percentage reimbursed for each ad he runs, usually 50 to 100 percent of the cost of that portion of the ad that features the manufacturer's product. But the reimbursement is limited to how much co-op funds the local advertiser has accrued in the past. Each time a local business buys products from a manufacturer with a co-op program, the local business accrues co-op dollars they can spend on future advertising.

So if a local electronics store spends $50,000 on Sony television sets, Sony might make $5,000 of that available for co-op advertising reimbursement at 50%. This means that if the local advertiser runs a $1,000 ad, and sends the bill to Sony, then Sony will reimburse the advertiser with 50% of the cost of the ad, or $500. In effect, then, the local advertiser gets a $1,000 ad for only $500. The advertiser can keep doing this until his co-op dollars run out, in this case, after running $10,000 worth of ads. With $5,000 in accrued co-op dollars, if the manufacturer would reimburse ads at 100%, the local advertiser could run $5,000 worth of ads and get reimbursed for every cent.

Now, co-op can become complicated. Some manufacturers don't allow products made by any other manufacturer to appear in an ad that they're going to be paying for. Other manufacturers will allow other products in the ad, but will only reimburse for the percentage of the ad where their products appear. Others won't allow you to put prices in, and there are some that will only allow you to run ads that are designed or at least approved by the national manufacturer.

You've got to be aware of these restrictions, and understand their consequences. I've had advertisers who would only run when they had accrued co-op funds. These people are basically saying that they don't find your newspaper worth running in if they're paying the full cost themselves. Be careful of this. A co-op ad from a manufacturer with huge restrictions, such as no prices, might result in an ad that builds demand for the product, where the manufacturer wins out, but doesn't get much of a response for the local advertiser. This can be a big problem if you run into a new account who wants to test your newspapers with a co-op ad.

However, despite these small problems, co-op advertising can be a great way to increase sales in your territory. The real problem is that many mid-to-smaller advertisers don't know they have co-op funds accrued or can't be bothered with all the paperwork involved. And most likely, what's mentioned in your rate card is that you have a co-op specialist at your newspaper who will handle everything, from figuring out what products a business has that has a co-op program, to finding out how much co-op funds have been accrued, to creating or getting their hands on manufacturer-approved ads, to making sure the manufacturer gets all the paperwork to ensure the advertiser gets reimbursed.

Find out who, if anyone, handles co-op at your newspaper. Usually this co-op manager will be more than happy to go out on the road with you and talk to your current or potential customer without sacrificing any of your commissions.

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