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What is Cooperative Advertising and can businesses get benefits from it?

Have you ever wondered how brands can afford to run such large promotions? Well, it’s because of a marketing strategy called cooperative advertising. This form of marketing is mutually beneficial and provides a cost-effective way for manufacturers and retailers to run promotions. In this article, we will be discussing what is cooperative advertising, as well as the benefits that come with this type of promotion. We will also go over some examples so you can see how effective this method really is!

What is cooperative advertising
What is cooperative advertising

What is Cooperative Advertising?

Cooperative advertising is when business operators cooperate with each other in an advertisement. This is quite different from standard adverts in that the businesses do not receive payment in return for their advertisements. They are said to be participating in cooperative advertising when they advertise another business’ product or service without receiving any compensation. Example of this would be Starbucks promoting a music album by Lady Gaga or GAP promoting a fashion line at Target. This is not the same as product placement, which consists of businesses exchanging goods for their advertisement.

How does it work for a company to participate in cooperative advertising?

If a business wants to participate in cooperative advertising, they need to find another company that will be willing to cooperate. After finding a partner, the businesses should discuss how their advertisement will go and what each of them will do for it. Because this type of advertisement does not directly benefit either party, they both have to agree on how much work they will put into the advertisement.

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After deciding on how their advertisement will be carried out, businesses can choose between different types of advertisements – sponsorship, business-to-business (B2B), or event promotions.

What are some benefits to a company’s business if they participate in cooperative advertising?

There are several potential benefits to participating in cooperative advertising. A company will gain valuable marketing experience in that they have to work with another business. This may influence their future opinions on which companies are easier or more enjoyable to work with, based on the cooperation for this advertisement.

Other aspects of a company’s business can also benefit from cooperative advertising. For example, participating in this type of advertisement may help a company increase its market share. The other business that they cooperate with is likely to be a competitor, so if consumers like the product or service being advertised by both businesses, this will give them more incentive to choose the companies’ products over those of competitors. This can also have an effect on revenue and profit for each company.

What are the drawbacks of cooperative advertising?

There is a chance that working with another business in an advertisement may not be beneficial for businesses at all.

This type of advertisement can bring in less exposure than standard advertisements because consumers might be unaware that the products or services they are viewing were advertised by two different companies. Also, viewers might think that if a company has to advertise another company’s product or service, then their own must not be very good.

While both retailers and manufacturers have the same goal in mind, they won’t always agree on how to achieve it. Producing the perfect ad can be difficult when just one marketing department is involved. But when two come together, diverging views on branding and style are even more likely.

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Retailers need to share the limelight with other manufacturers when they participate in cooperative advertising. This leads to in reduced visibility for both partners.

Some examples of companies that have benefited from cooperative advertising

There are many companies that have benefited from cooperative advertising. But but these are the most widely known companies.

Chewy.com

Chewy.com is an online pet food retailer. It partners with its main suppliers that it can take advantage of discount purchases, cooperative advertising and market development funds.

Some examples of companies that have benefited from this type of advertisement
Chewy is one of examples of companies that have benefited from cooperative advertising

Walmart and Dove

Dove partnered with Walmart for cross-promotions named Dove’s Real Beauty Campaign. This campaign featured women who bought its products at Walmart. In 2019, the two companies also collaborated to make a project which aimed to increase the diversity of images in the media, generated a lot of publicity for both brands.

Some examples of companies that have benefited from cooperative advertising
Dove also is one of best known company that have benefited from cooperative advertising

Conclusion

After reading this blog post, you now know how cooperatively advertising has been able to help companies grow their profits. You’ve seen that cooperation can lead to a stronger marketing campaign and the opportunity for both parties to learn from one another as they work together. We hope we have inspired you with these insights on cooperative advertising! Let us know which of these two companies would be your first choice if given the chance.

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