What Are Co-Op Ads and How Do They Work?

Posted at Oct 15, 2018 6:27:00 AM by THAT Agency | Share

The worlds of marketing and advertising are constantly changing. Over the past two decades, both have undergone drastic changes, and with media continuing to shift even today, advertising is just as malleable as ever. Unfortunately, it's just as expensive as ever, too, and coming up with the cash to handle all of your advertising needs can be complex.

Many brands are turning to cooperative advertising to recoup some of their costs. Are co-op ads the right choice to meet your needs?

Cooperative Advertising Examples | Distribution Channels | THAT Agency

Understanding the Concept

Co-op advertising is simply a way of sharing ad costs with various parties. There are two main types you may want to consider. In horizontal co-op advertising, you have two (it could be more) types of retailers that share the costs of the ads. It's useful if they both stock the same product. For example, maybe two franchisees share the costs of ads across a regional boundary.

In vertical co-op advertising, a retailer and manufacturer or national brand shares the cost of an ad. You see this often where a big-box retailer advertises a particular brand they carry.

How Does It Work?

Need some firm cooperative advertising examples to guide you? Here are a few that might help.


You may already be doing this within your distribution channels and not realize it. A few simple cooperative advertising examples: sharing space on billboards to save money or working with other companies to buy the back page of a newspaper.

One particularly striking example of this is the Intel Inside ad program which ran in the early 90s. Intel didn't manufacture products to the end user. Instead, their chips went inside many of the technologies consumers were looking for, like HP computers, so often HP and Intel would work together on a horizontal campaign to promote the end product together.


This type of co-op advertising tends to be better known. One recent example came from Dove and Walmart. Dove's "Campaign for Real Beauty" would feature women with real imperfections using their products that were purchased at Walmart. In this example, Walmart was one of Dove's distribution channels.

What About the Results?

Co-op advertising does work, and it tends to work really well. It allows retailers of any size to save money on expensive advertising that they might not otherwise be able to work into the budget. It has the power to increase sales just like any other ad campaign might.

There are some drawbacks of which to be aware. Ads have to be screened and approved in vertical co-op advertising, and often the money comes back only in the form of reimbursement, but despite that, it's typically very worthwhile.

Interested in learning more about how co-op advertising can enhance your company? We can help you get your next campaign off the ground. Contact THAT Agency today to learn more.

Is your co-op advertising program in full swing? Download our free co-op tracking template now to help you keep tabs on your co-op dollars and ad approvals:

Free Co-Op Marketing Tracking Template | THAT Agency

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