When you look at your marketing budget, one of the big factors you have to consider is co-op. As a dealership owner, you likely feel beholden to the digital rules for your brand. 

In recent years, the balance between co-op and marketing has gotten even trickier.

As original equipment manufacturers (OEMs), such as GM, lean more on preferred vendor programs, individual dealers’ priorities are getting lost. Even though these programs are offered as a solution to streamline marketing for dealerships, the preferred vendor system has some drawbacks.

Despite the problems with preferred vendor programs, there are solutions for dealers who want to better customize their marketing.

The Purpose of Co-op at Each Tier

There are nuances in the three tiers of auto marketing, but those nuances make a huge difference in your marketing strategy. 

As a dealership, your focus is Tier 3 – why customers should buy their vehicle here. But OEMs are largely focused on Tier 1 (“Why you should buy this vehicle”) — which leaves Tier 3 objectives getting lost in the restrictions of preferred vendor co-op programs. 

Why are the lines so messy in these co-op programs?

Years ago, it was easy to develop a program around TV, radio, or newspaper advertising. But the inclusion of digital marketing — which encompass dozens of additional channels — has challenged the system. 

This has pushed some OEMs to identify “turnkey” preferred vendors. These preferred vendors, though, aren’t all working for the best interest of your Tier 3 marketing.

It’s not just digital marketing that suffers from the preferred vendor program, but the store’s website SEO, too. ⬇️

Why Your OEM Website Isn’t Getting Found Online (And How to Fix It)

The Problem with Preferred Vendors

With the OEM (and Tier 1 interests) paying for a majority of this preferred vendor marketing, turnkey agencies aren’t incentivized to customize marketing for dealerships.

This results in Tier 1 messaging seeping down to the dealership level, and it leaves customers with no answer to the question, “Why buy this vehicle here?” The OEM wants to move more metal, but ultimately, it doesn’t care which dealerships sell those cars. 

With preferred vendor programs, you’re ultimately spending co-op dollars on marketing that isn’t designed for your local audience. 

The Solution for Tier 3 Marketers

If you’re reading this and nodding along about all the preferred vendor program issues, there’s still hope for you to have a really strategic marketing plan.

Let’s take a GM dealership for example, because that’s an OEM with a serious turnkey vendor program.

A Chevy dealer could take or leave the GM marketing preferred vendor program and also work with another provider to craft campaigns targeted to the store’s most urgent needs.

Without the constraints of co-op regulations, this Chevy dealership could craft a Facebook ad targeting funnel to meet shoppers at the right stage in their buying journey. The store could utilize video, a wildly popular medium. The store could send emails that stand out from the cookie-cutter campaigns every other GM store is sending.

This GM store could have marketing that actually speaks to its Tier 3 goals.

We get it — at the end of the day, every dealership has a finite marketing budget. But would you rather spend a mix of co-op dollars and your budget on poorly targeted marketing or use your marketing spend on a strategic marketing package designed specifically for your store?

Your dealership needs marketing that drives customers to your door. 

Your store won’t ever rise above the competition if your marketing dollars are only answering the question, “Why buy this vehicle [from this brand]?” It takes a customized marketing strategy tailored for your store to succeed in today’s competitive market. 

See how we craft custom marketing strategies for our clients ⬇️

Partner Profile: Einspahr Auto Plaza

The Opportunity with 9 Clouds

No matter where you’re at with co-op, we’d like to talk.

We offer custom marketing packages to either complement an existing co-op strategy or completely replace the turnkey program. We can find opportunities to push your marketing forward, too, and engage customers with your store.

Ready to get see where automotive online marketing can take you?

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