Most Franchisees Use Co-Op Dollars On Ads

A new report from BIA/Kelsey titled “Advertising and Marketing Trends of Franchisees” reveals 65% of franchisees surveyed use co-op dollars for advertising and promotion, with more than one-third reporting that up to half of their ad spend comes from co-op dollars.

The report is the latest in a series based on data from BIA/Kelsey’s Local Commerce Monitor Wave 20 survey of small and medium-size businesses. This new report specifically examines the media and marketing spending behaviors of the SMBs that self-identified as franchisees or licensees of a national company.

“Co-op dollars present a significant opportunity for franchisees to increase their spending over the next 12 months,” said Celine Matthiessen, VP, analytics and insights, BIA/Kelsey. “Solution companies that are able to report clearly on ad performance and show examples of successful revenue/customer-driven campaigns that result in increased calls to the business and website traffic will have an advantage with franchise SMBs that want to extend and complement co-op programs.”

The report reveals that franchisees are bullish on spending for advertising and promotion over the next 12 months. Half of all franchisees are planning to increase their ad spend in the next year and spend across an average of 20 different ad channels to reach customers.

Quick adopters of new technology and advertising channels, the majority of franchisees use a quarter to a half of their total annual ad budget from co-op programs on both traditional and digital channels. Most co-op advertising programs focus on targeted digital such as search and display advertising and traditional channels like direct mail, radio and community sponsorships. 

“Any type of marketing and ad platforms that support customer promotions and deals are especially appealing to franchise SMBs,” commented Matthiessen, “It’s also worth noting that the development and use of digital advertising is an area where franchise SMBs report wanting support from their franchisor. Currently, most franchises use their own internal software and services so this is a key opportunity for franchisors to partner more closely with franchisees.”