Cooperative advertising is a shared promotional investment between a retailer and manufacturer. In a typical co-op advertisement, the retailer includes a prominent mention of a manufactured brand. The manufacturer pays some or all of the expense for the ad.
The initiator of a co-op promotion varies. Many manufacturers set aside budgets each for cooperative advertising. A retailer must contact the manufacturer to offer the prominent promotional feature in exchange for payment. The premise of this advertising approach is that both businesses win. The manufacturer gets a prominent placement in a retailer's promotional message, while the retailer saves on advertising expenses.
Co-op advertising can take place across the same media used by single advertisers. These media outlets include television, radio, newspapers, magazines and the Internet. One of the most common approaches to co-op advertising is in a retailer's weekly flyer. Many retailers send thousands of flyers each week to the local market and place more in their stores. The retailer may place a manufacturer's new product prominently on the front of the flyer in exchange for payment toward the expense. In other cases, the retailer sends out direct-mail postcards that the manufacturer pays for. The retailer and manufacturer could also share the expenses if they choose.