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Manufacturer and Alternative Funding: Co-op & NTRGoing beyond traditional radio revenue sources

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Co-op Triangle

Manufacturer

Retailer Radio

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A Win-Win Relationship

• Manufacturer sells more goods to the retailer• Manufacturer gets branding support• Retailer gets additional advertising• Increase in sales results in increased future co-op funds• Station gets advertising revenues• Buys are not influenced by ratings

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Two Types of Co-op Opportunities

1. Retail Driven– Work with one retailer– Combine co-op accruals from

multiple manufacturers

2. Manufacturer Driven– Work with one manufacturer– Combine co-op accruals from

multiple retailers

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Four Basic Co-op Terms You Must Know

Accrual Advertising funds accumulated and made available to a Retailer based on a percentage of purchases from a Manufacturer.

Accrual Period The timeframe for accruals as defined by the Manufacturer. The last day of the accrual period is also the date when the retailer is no longer eligible for reimbursement and any remaining accruals revert back to the Manufacturer.

Allowance Percent of advertising invoice to be reimbursed to the Retailer up to the amount accrued.

Reimbursement Payment made by a Manufacturer to a Retailer to cover all or a portion of the cost of a qualifying advertising schedule. Proper documents must be submitted in a timely manner by the Retailer to qualify. Payment can be in the form of a check or credit memo.

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RAB Co-op Database Information

RAB Radio Training AcademyRAB Radio Training AcademyYou Have Access to TWO Types of Budgets...

Are You Taking Advantage of Both?Promotional expenditures were

Estimated to be $354 Billion in 2008!

1995 2005$0$50$100$150$200$250$300$350$400

165

276

70

342

AdvertisingPromotional

Annual SpendingBillions

Sources: Universal McCann 2006, Promo Magazine 2006

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Alternative Revenue

Revenues from budget sources that radio has not traditionally accessed.

(Non-Traditional Revenue)

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Alternative Revenue Streams

$ Sales$ Merchandising$ Public Relations$ Branding$ Marketing$ Recruitment$ Co-op $ Sponsorship

$ Sampling$ Couponing$ Promotional$ Discretionary Market Funds$ New Product Rollout$ And More…

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Learn How to Combine These Revenue Streams and You Can Create an Alternative Revenue River

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Event Marketing

• Pop-up retail

• Fairs and festivals

• Concerts

• Sampling

• Sponsorships

• Hospitality Areas

• Signage

• Expos

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Interactive

• Banner & tile ads

• Page sponsorships

• Video

• e-Coupons

• e-Promotions

• Online auctions

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Retail Programs

• In-store Promotions

• Couponing

• Special Events

• Sweepstakes

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Recruitment

• Radio commercials

• Online

• Job Fairs

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Finding Prospects

1. Conduct CNA

2. Discuss the estimated cost of your plana. If cost appears beyond reach,

suggest enlisting one or more of their manufacturers

b. Determine what they are willing to give the manufacturer

3. Determine who contacts manufacturera. If you are to make contact get the

necessary contact information

Start With a Retailer

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Finding Prospects

1. Arrange a face-to-face meeting (local access). Do not go to corporate.

2. Conduct a CNA.3. Outline details of your program - emphasize

what they will receive4. Put everything in writing. NO VERBAL

AGREEMENTS!5. At the conclusion of your meeting, ask them if

they have any other retail customers with whom they would like to do a program. If yes, ask if they prefer to contact the Retailer or if they want you to. When they indicate they want you to do it, get the contact information.

Contact the Manufacturer

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Finding Prospects

1. It is not unusual to work 6-12 months out on alternative revenue programs.

2. It will take a year before you start to see meaningful results. It will take 2 years before you will be fully up to speed.

3. It takes time to get comfortable with the culture and language of the alternative revenue world. The more you do it, the faster you get comfortable.

Repeat the Process

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You may need to remove your Radio goggles!

Some programs will require elements that are not part of your station’s traditional product lines...

Newspaper Ads

Promotional Merchandise

3rd Party Web Services

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You may need to remove your Radio goggles!

Whatever it takes to be successful...DO IT

& CHARGE FOR IT!

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Manufacturer and Alternative Funding: Co-op & NTRGoing beyond traditional radio revenue sources