Tier 2 dealer advertising co-ops date back to the 1950s and 60s, an era when advertising inventory was genuinely limited. Only so many billboards. Only so many newspaper pages. Only a handful of television stations with a fixed number of commercial slots.

OEMs and their franchised dealers pooled money because that was the only way to afford meaningful placement in a scarce media landscape.

Digital advertising eliminated that scarcity more than a decade ago. Impressions, targeting, and channels are effectively unlimited now. Tier 2 co-op advertising largely kept operating as if none of that changed.

Here's what we see most often: a lot of Tier 2 spend still goes toward broad-reach media, billboards, generic TV spots, co-branded regional websites, that functions as a smaller, localized copy of what Tier 1 OEM advertising is already doing.

It builds brand awareness for the manufacturer. It does very little to differentiate any individual dealership competing in that same market.

This isn't purely theoretical. We covered a real example on the show previously: a group of Ford dealers in Rochester, New York, who pool funds annually to donate a roughly $100,000 van to a local charity.

That's Tier 2-style dollars, redirected away from generic media buys and toward a single, visible, community-anchored action that builds goodwill and brand association far more directly than a billboard ever could.

With the scarcity argument gone, we each pitched a different direction for how Tier 2 dollars could work harder for an individual store's local brand, at very different levels of cost and commitment.

Low cost, high visibility.

Partner directly with a YMCA, Boys & Girls Club, or Salvation Army location. Keep their parking lot lines painted and signage well-maintained year-round, and put the dealership's branding on that upkeep clearly and consistently.

This funds a local business relationship, supports an organization families already trust, and puts the dealer's name somewhere the community sees it as a contributor, not an advertiser.

Moderate effort, long-term search value.

We've all seen the standard "we proudly sponsor these 15 local organizations" webpage, usually just a logo wall nobody clicks. Rework it into something functional.

Build each sponsored organization its own dedicated landing page on the dealership's site. Ask them to link to it or feature it in their own newsletter. Redirect budget currently going to an outside agency's generic email marketing toward content that actually captures local search traffic and backlinks.

Done well, this can outperform the sponsored organization's own web presence in local search results.

Low cost, high memorability.

This was the pitch nobody expected going in and the one that stuck coming out: an inexpensive ice cream truck appearing at Little League games and youth sports complexes, branded for the local dealer group.

The product cost is minimal. The goodwill and brand recall with families attending week after week is not.

None of these ideas require negotiating a bigger co-op budget, only a different conversation about how the existing one gets spent.

Most dealer associations and OEM co-op agreements have more flexibility for local activation, sponsorships, and community marketing than dealers assume, but that flexibility usually has to be requested, not defaulted into.

The practical first step: ask your dealer association or Tier 2 co-op administrator directly what qualifies as an approved local activation expense before assuming the only options are billboards and shared TV spots.

🎙️ Listen to today's episode of The Pushback for the complete discussion.