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Companies embrace cooperative advertising, but hitches remain

Companies embrace cooperative advertising, but hitches remain
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First Published: Mon, Apr 23 2007. 12 35 AM IST

Winning combination: Last year, Nike and Apple together launched an advertising campaign for the Nike+iPod Sport Kit, a device that includes a sneaker-based sensor that combines with another sensor at
Winning combination: Last year, Nike and Apple together launched an advertising campaign for the Nike+iPod Sport Kit, a device that includes a sneaker-based sensor that combines with another sensor at
Updated: Mon, Apr 23 2007. 12 35 AM IST
Reebok and Sony Ericsson may seem unlikely partners. Just as Nike and Apple or Samsung and Hindustan Unilever Ltd do. Yet, these companies have either already launched or plan to launch joint advertising or cooperative advertising campaigns in an effort to sell common benefits and reduce overall costs.
“Cooperative advertising occurs when two brands appear in one ad because their lifestyles match,” said Harish Bijoor, CEO, Harish Bijoor Consults Ltd, a marketing consulting firm. “It’s kind of like a marriage between two people from different backgrounds with a common goal,” he added.
For Sony Ericsson and Reebok, and Nike and iPod (which pioneered the concept in this segment), the commonality lies in the fact that most serious runners (or hobby runners) listen to music while running. Nike Inc. and Apple Inc. went the full distance and launched the Nike+ shoes, which have a sleeve to fit a pedometer and an iPod Nano which picks up signals from the pedometer apart from playing music; then, the two companies launched a campaign. “The response to this product has been so overwhelming that we plan to make more products Nike+ ready,” said Sanjay Gangopadhyay, marketing director, Nike India Pvt. Ltd, adding that the Nike + iPod kit would soon be launched in India.
Reebok and Sony Ericsson didn’t launch a product but sold existing ones in addition to an athletics lifestyle. In billboards, print ads, and in-store promotions, the firms jointly pitched Reebok running shoes and Sony Ericsson’s Walkman phone. A spokesperson for Reebok India did not put a number to the amount spent on the campaign, but said it was split equally between the firms. The two companies came together to present exercise as an experience and not a chore, said Subhinder Singh Prem, MD, Reebok India.
Bijoor said that although such campaigns did work out cheaper for the companies concerned, cost was not the main motivation for companies to launch cooperative advertising campaigns. “The whole idea behind this form of advertising is to connect with customers,” he added, explaining that it was best suited to ingredient brands such as chips for computers or tyres for cars. “Strong brands add value to the brands they have tied up with,” said Bijoor.
Intel was among the first companies to launch cooperative campaigns in association with PC makers. The campaign, which still continues, made Intel, which makes chips, one of the most recognised brands in the world. PC makers benefited by association with a company that was considered a technology leader. In addition, small PC assemblers gained credibility by associating with the brand.
The Intel campaign started in 1991 when the firm created a cooperative advertising fund; it decided to route a small portion of its revenue from the sale of chips into this fund. “Intel has grown 25-30 times since the launch of this initiative,” said Prakash Bagri, director, Original Equipment Manufacturers (OEM) business, Intel in India. According to executives in the technology and advertising industries, who did not wish to be identified, Intel sometimes pays up to 75% of the advertising cost.
Samsung India Electronics Pvt. Ltd and Hindustan Unilever have just launched a cooperative advertising effort where some of the latter’s Surf Excel packs carry Samsung branding on one side and their own branding on the other. “The idea behind this is to give the consumer a truly value- added proposition,” said R. Zutshi, deputy managing director, Samsung India. In this instance, this proposition is simply that Surf Excel detergent works best with Samsung washing machines and vice versa. The partnership between Surf and Samsung isn’t a first in this segment. In the early 2000s, P&G Home Products Ltd and Whirlpool India Ltd launched a similar one for Ariel detergent and Whirlpool washing machines.
Experts said that cooperative advertising campaigns were usually short. “In cooperative advertising and marketing initiatives, the tie-up between brands are usually short term because (except for Intel) most of the partnerships are based on promotional activities,” said Basabdatta Chowdhuri, chief operating officer, Madison Media, an advertising agency. He added that the companies involved in such campaigns had to work out details regarding each’s share of costs and exposure.
A senior advertising executive, who didn’t wish to be named, said he had worked on a cooperative advertising campaign for a cola brand and a car maker which had to be called off because the companies couldn’t agree on several issues including cost. “Cooperative advertising accounts for a very small percentage of total advertising because the issues companies face while working together are far too many,” said Bijoor. “(But) if done right, the reach can be twofold and can change the way advertising works,” he added.
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First Published: Mon, Apr 23 2007. 12 35 AM IST
More Topics: Marketing and Media | Advertising |