Co-Op Advertising in Franchise Brands: Why It's Time for a Fix

Co-op advertising has been a cornerstone of franchise marketing for decades, allowing franchisees to pool resources and gain access to powerful, collective campaigns. However, the old “DMA” (Designated Market Area) co-op models that once worked so well for traditional media have become outdated and, in many cases, detrimental to local franchisees.

These old co-op structures, which often rely on uniform messaging, do not allow for the flexibility or personalization needed. Franchisees are left with little control over the messages that resonate best in their specific trade area, and the lack of transparency and analytics leaves them blind to the true performance of their advertising efforts.

“Prior to partnering with Hyperlocology, all locations in our co-op had to run the same creative regardless of the store’s profile. I also had no visibility to the ROI of our local digital ad spend. Now, we can choose the creative message that is most relevant for each individual location and see the ROI it is delivering per location."

Ed Holmes, a multi-unit franchisee at Papa Murphy’s

Read the full Papa Murphy's Case Study

The Problem with the Old "DMA" Model

Traditional co-op advertising models were created in an era when brands primarily invested in TV, radio, and print. In those days, it made sense for all participants within a DMA to run the same advertisements across an entire market. However, with the rise of digital marketing, this cookie-cutter approach has begun to show its cracks.

For instance, franchisees in high-income areas with high labor costs often find themselves running value-focused ads alongside co-op participants in lower-income areas. This one-size-fits-all approach can harm the performance of individual stores and drive a wedge between franchisees and corporate. The same message that works for one franchisee may be completely irrelevant—or even damaging—to another.

This lack of localized control is exacerbated by the inability of franchisees to measure the effectiveness of their digital ad spend. Without the right tools in place, franchisees are often left in the dark about the return on investment (ROI) of their advertising dollars. They’re forced to trust a system that lacks the data-driven transparency needed to make informed decisions.

A Digital Future Calls for a Modern Co-Op Approach

The transition to digital has presented a golden opportunity for co-op advertising to evolve. Franchise brands no longer need to rely on a single, unified message across a broad market. Multi-location advertising platforms allow for localized, targeted messaging that can be customized based on the unique needs of each store or region. The problem is, many co-ops haven’t caught up with the times.

What co-op advertising needs now is flexibility and transparency. Each franchisee should have access to a range of brand-approved creative messages and offers that suit the specific demographics of their area. No longer should a store in an affluent suburb have to run the same promotion as one in a more price-sensitive location.

One of the biggest pain points for franchisees today is the lack of visibility into how their local digital ad spend is performing. They are not only bound by restrictive co-op rules but are also unable to track performance on a location-by-location basis. This lack of transparency stifles growth and prevents franchisees from making smarter marketing decisions.

A Franchisee's Perspective

This is the type of flexibility and insight that modern franchisees need to thrive. Franchise marketing platforms, like Hyperlocology, offer solutions that automate the advertising process, enabling franchisees to select customized messaging while providing real-time analytics to measure performance. This combination empowers franchisees to invest their advertising dollars wisely, ensuring that every dollar spent drives results.

The Solution: Automation and Transparency

Co-op advertising doesn’t need to be scrapped entirely—it needs to be modernized. By embracing digital tools and platforms that offer localized creative control and transparent analytics, franchise brands can move beyond the outdated DMA model. Franchisees should be able to log into a portal, choose the creative and offer that fits their location, and then view the performance of their ads.

By automating the ad-buying and messaging processes, franchisees can eliminate the inefficiencies of traditional co-op models. They will no longer need to rely on labor-intensive co-op meetings, negotiations over generic media plans, or the manual approval of ad campaigns. Instead, they can focus on growing their business with the confidence that their marketing is tailored to their trade area and optimized for success.

Final Thoughts: Modernizing Co-Op Advertising in a Digital World

Co-op advertising for franchise brands is in desperate need of an overhaul. What worked in the past no longer serves the needs of modern franchisees. As digital marketing continues to evolve, the power to customize, track, and optimize campaigns at the local level will be the key to success. Franchisees need more control, better tools, and full transparency to ensure their advertising dollars are working as hard as they are.

It’s time to fix co-op advertising by embracing the tools and strategies that empower franchisees to make smarter decisions and deliver tailored messages that truly resonate with their customers.

Experience the new Hyperlocology today and see how we can make brand-powered local advertising accessible, and actionable.