How to Cut Waste and Improve Transparency in Channel Spend

A recent report estimated that over $70 billion is allocated each year by national brands to channel marketing efforts, including billions for co op advertising funds. At the same time, several surveys peg the participation rates of local dealers and resellers at 50% or lower. Combined with an estimated 20% of those funds going to administration, support, and legal expenses, co op advertising funds routinely struggle with waste.

For a long time, these excesses were considered the “cost of doing business”, but improved technology is providing far greater transparency into digital advertising campaigns. Combined with increased scrutiny from finance, brand managers are increasingly expected to carefully monitor and report on the ROI of these programs.

So how do you start to cut into these waste numbers and improve transparency in channel spend? Let’s look at some of the barriers to doing so and what some brands are already doing to address it.

The Cost of Administration

It costs a lot to run a channel marketing program. Regardless of how it is run, the hours and money needed to support and manage hundreds (or thousands) of local dealers are extensive. There are costs related to administration by brand managers, legal expenses, accounting expenses for managing reimbursements, and support costs for answering questions and helping local marketers execute their campaigns.

Some brands attempt to outsource portions of the process through third-party agencies, which can be even more costly depending on the level of support they offer and how rapidly they can scale to match local marketer needs.

This isn’t a new problem. Brands have struggled with how to reign in administrative spend on these programs for years, but only recently have solutions been viable. Technology is now allowing brands to automate a lot of these steps, standardizing what local marketers do to claim co op funds, and how they are reimbursed for their expenses.

Low Participation Rates

When millions of dollars are allocated to co op advertising and local marketers don’t take advantage of it, several things can happen. If the brand retained an agency to support those marketing efforts, a good percentage of that retainer goes to waste. At the same time, any technology and tools implemented are under-utilized.

In addition to the poor ROI on the co op funds themselves, brands spend big on national campaigns to promote new product releases. If local marketers don’t take advantage of co op funds and participate in these programs, it reduces the ROI of a costly national roll out. Simply put, for brands that rely on partners for most end-user sales, participation is a must.

Where Does the Money Go?

Finally, there’s the question of where the money goes. While most brands have somewhat strict requirements for how co op advertising funds are used, it’s often difficult to ensure compliance across hundreds of local marketers.

Even if the tactics utilized match the requirements, it’s difficult to know for certain if local marketers are promoting the right products with the right language. It’s common for brands to realize their funds have been going to promote competitor products.

By taking certain decisions related to campaign collateral and targeting out of the hands of local marketers and reducing the oversight required by brand managers, greater transparency can be achieved for all sized campaigns. This is another situation in which technology can have a profound positive impact.

Increasing Transparency with a Platform Built for the co op

To eliminate many of these issues, marketing collateral needs to be standardized and centrally distributed. Ad materials should be pre-approved to ensure proper targeting, and results should be aggregated and reported back to the brand in the same format for greater insights.

This is nearly impossible to do manually. Getting hundreds of local marketing managers to follow the same guidelines consistently simply isn’t going to happen.

That’s why we’ve developed GoBoost, a streamlined channel marketing program support platform that allows brands to distribute pre approved collateral, and helps local marketers launch campaigns in just minutes. Dealers can more easily claim co op funds and get reimbursed for their efforts, and brands get the greater transparency and insights into campaign performance they need.

Download our eBook, How to Simplify Channel Partner Marketing and Improve ROI, to learn more about how GoBoost addresses these challenges, removing obstacles to channel partner marketing success.

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