Del Labs' Sally Hansen division and Levi Strauss & Co. are among national brands pooling increased ad dollars with local retailers by using outdoor boards, transit shelters and bus panels to drive in-store traffic and advertised specials.
About $20 billion was made available last year to retailers by marketers for co-op spending, reports Jefferson-Pilot Co-Opportunities, a sales/promotion consultant.
Retailers expand their reach via co-op support, while marketers thrive on the local exposure.
"It becomes a retail partnership," says Harvey Alstodt, exec VP at Del.
The personal & beauty care company will spend an estimated $10 million this year in co-op advertising on out-of-home venues for its Sally Hansen nailcare products with retailers such as Duane Reade Co. drugstores, CVS Consumer Value Stores and Walgreen's.
The current Sally Hansen campaign, running in Manhattan, Westchester County, N.Y., and Minneapolis, engaged several outdoor companies including TDI and SHF Communications.
Less than half of Del's estimated $25 million advertising budget is spent on co-op advertising. It also markets Naturistic, a natural cosmetic line.
In the past, co-op dollars have been used mostly for network and cable television, newspapers and radio, but Mr. Alstodt cites an obvious advantage of out-of-home: "We can get a bus shelter right in front of a store."
Two additional benefits for marketers are lower ad rates for local ads and input in the creative.
"We've seen a dramatic increase in the amount of co-op posters being printed," says Ginny Deitchler, director of Outdoor Works/Placement Services, a custom-order outdoor board company.
Fast-food chains, athletic-shoe companies and retail outlets are among the categories Ms. Deitchler credits for the sharp rise in co-op out-of-home advertising. Supermarkets and auto dealers have traditionally used co-op dollars to drive consumers into their neighborhood outlet.
Marketers using co-op advertising for out-of-home emphasize cost efficiency. In addition, out-of-home offers a larger format that gives marketers the ability to feature an entire brand rather than just a single product.
But it was out-of-home's relative economy that drove Levi's to ask its agency to re-evaluate where it was spending co-op ad dollars.
"Newspapers are not a good way to reach young adults ages 12-24," says Art Neumann, VP-group media director at Levi's agency, Foote, Cone & Belding, San Francisco.
The apparel marketer spent a total of $35 million last year matching retailers co-op dollars in local markets, up from about $25 million a few years ago, Mr. Neumann says. Neither the company nor the agency would disclose the amount spent for out-of-home co-op alone.
Jefferson-Pilot reported newspapers received 55% of total co-op dollars; retailers are increasingly finding their way to out-of-home companies.
Approximately 10% of Patrick Media Group's 1993 revenues were from co-op advertising, double the 1990 figure, according to Stephen A. McNeely, company president-CEO.
"It has the potential to grow into a significant amount of the total spent on outdoor," says Mr. McNeely.
In many cases, out-of-home co-op advertising is being used to augment TV and print support.
Jefferson-Pilot Director of Marketing & Operations Elaine Clark believes co-op dollars earmarked for out-of-home vehicles are increasing for two reasons.
"One, out-of-home media people are becoming better consultants, proposing integrated programs, which more effectively sell the product. Two, manufacturers are more willing to release those dollars in support of outdoor," says Ms. Clark.