The Wasted HVAC Co-Op Marketing Dollars Have Been Found
Chris Smith • January 5, 2026
The Wasted HVAC Co-Op Marketing Dollars Have Been Found
John Wanamaker, a pioneering American retailer, famously made the statement, “Half of my advertising budget is wasted; the problem is I don’t know which half.” With our experience, artificial intelligence, and data science, we now know exactly which half is wasted when it comes to HVAC co-op marketing budgets, and this knowledge can fundamentally transform market share for the manufacturers who embrace the changes needed to win in today’s market.
For decades, HVAC manufacturers have invested millions—often tens or hundreds of millions collectively—into co-op marketing programs designed to support dealer growth, increase brand visibility, and drive market share. The intention has always been right. The execution, however, has been deeply flawed.
At All Contractor Marketing (ACM), we work with hundreds of HVAC businesses every year. We see behind the curtain of dealer marketing operations, from small family-owned companies to multi-location enterprises. What we see repeatedly is not malicious intent or negligence, but a systemic failure of experience, process, and data visibility—a failure that quietly wastes an estimated 52% of all HVAC co-op marketing dollars.
This article will outline how that waste happens, why it persists, and—most importantly—how HVAC manufacturers can eliminate it without spending one additional dollar, while dramatically improving dealer performance and market share outcomes.
The Hidden Scale of the HVAC Co-Op Marketing Problem
HVAC manufacturers often assume that co-op waste happens at the margins: a bad agency here, a weak dealer there. The reality is far more alarming. The waste is structural, pervasive, and embedded into how co-op marketing is currently executed.
Most HVAC dealers are not sophisticated consumers of digital marketing. They don’t understand ad platforms, attribution models, conversion tracking, lead quality metrics, or sales analytics. They trust local marketing companies, regional agencies, or “HVAC marketing experts” who often lack true HVAC experience and rely heavily on white-label services, offshore labor, and generic marketing playbooks.
Manufacturers, meanwhile, lack visibility beyond invoices and surface-level reports. Without standardized data, dashboards, and performance benchmarks, there is no way to truly know whether co-op dollars are driving phones to ring, leads to close, or systems to be installed.
The result is predictable: money gets spent, activity gets reported, but results don’t materialize.
To illustrate the depth of the issue, consider the following three examples. These are not edge cases—they represent the most common failures ACM encounters every year when onboarding new HVAC clients.
Example 1: $2 Million Spent, Almost Nothing Gained
The first company was a 20-year-old HVAC business that had partnered with a local digital marketing company. Over four years, the HVAC company spent $500,000 per year, totaling $2 million in digital marketing spend. A significant portion of that spend was funded through manufacturer co-op programs.
The local marketing company did not perform any services in-house. SEO was subcontracted to a firm in India. Paid advertising was subcontracted to a white-label paid ads provider that also relied on offshore labor. None of the companies involved had deep HVAC marketing experience.
When the HVAC business owner contacted ACM, they were understandably disappointed. They believed digital marketing “didn’t work” and felt it produced little to no return on investment.
Our audit revealed two critical failures.
Ineffective Top-of-Funnel Advertising
The offshore ad suppliers had built a top-of-funnel display advertising strategy using programmatic ads, banner ads, and display retargeting—an approach that might work for retail products like clothing or handbags, but is fundamentally misaligned with HVAC consumer behavior.
HVAC purchases are driven by urgency, trust, and intent. When an air conditioner fails in July or a furnace stops working in January, homeowners do not browse banner ads and “consider” options over weeks. They search with high intent and call companies they trust.
Display advertising suffers from ad blindness—a well-documented phenomenon where consumers subconsciously ignore banner ads due to overexposure. For HVAC, ad blindness renders display-heavy top-of-funnel strategies largely ineffective.
The Silent Drain of Subcontracted Ad Spend
Even more damaging was the financial structure. By the time the HVAC dealer paid the local marketing company, and that company paid the white-label provider, and that provider paid offshore labor, more than 50% of the ad spend was gone before a single ad reached a homeowner.
Multiple layers of profit extraction meant less media spend, poorer optimization, and minimal accountability. The end result: very few leads, almost no measurable ROI, and a business owner who didn’t know enough to question the process.
When asked why they hadn’t spoken up sooner, the owner said:
“I really do not understand how all this works and the local guy I dealt with seemed really nice. I had no idea what was actually happening and I did not even know how to question the process.”
This failure didn’t just hurt the dealer. It resulted in approximately $1 million in wasted HVAC co-op marketing funds—money that could have significantly increased manufacturer market share if executed by a vetted, experienced HVAC marketing partner.
Example 2: The Phone That Nobody Was Answering
The second company was a 15-year-old HVAC business that had historically focused almost entirely on new construction. They decided to diversify into residential retrofit and became a conversion customer for a regional distributor.
As part of the conversion program, 100% of the marketing costs were covered, with a $350,000 annual budget. The distributor selected All Contractor Marketing to execute the program.
Within just two months, ACM’s data analytics revealed a devastating insight: the company was answering only about 50% of incoming phone calls.
This wasn’t a marketing problem—it was an operational one.
Years of new construction work had conditioned the company to deprioritize customer service representatives, phone systems, and lead handling processes. Without HVAC-specific analytics, this issue would have gone unnoticed indefinitely.
ACM worked closely with the company to:
- Improve their phone system
- Increase CSR staffing
- Improve CSR skills
- Implement call tracking and accountability
- Improve internal workflows and response times
As a result, the company moved from answering roughly half of incoming calls to nearly 100%.
Without strong data analytics and HVAC marketing experience, this company would have continued wasting 50% of their co-op marketing spend—not because the marketing failed, but because no one was there to answer the phone.
This company had no retrofit marketing history. Without data, they would have assumed marketing “wasn’t working,” when in reality, leads were simply disappearing into unanswered calls.
Example 3: When Sales Performance Goes Unmeasured
The third company was a 20-year-old HVAC business with extensive residential retrofit experience. They had a three-person comfort specialist sales team and entered a conversion program where ACM managed a $425,000 annual marketing budget.
Data analytics quickly uncovered two alarming trends.
First, one comfort specialist was dramatically underperforming compared to the other two. Second, as lead volume increased, all three salespeople’s close rates declined significantly.
It was estimated that 34% of leads were being wasted—a combination of poor performance by one specialist and the absence of a structured sales process that allowed even strong performers to slip as demand increased.
The owner assumed all three comfort specialists were closing at competitive rates. There was no sales process, no inspection of performance, and no systematic follow-up for unclosed leads.
ACM helped the company:
- Implement a formal sales process
- Ensure every lead was contacted
- Build a structured follow-up system
- Provide sales training remediation for the underperforming specialist
Once performance was inspected, improved, and standardized, close rates stabilized and improved across the board.
The lesson was simple and powerful: owners cannot expect performance they do not inspect. Without data analytics and process, leads leak, close rates drop, and co-op marketing funds are wasted—no matter how good the marketing is.
The Data Tells a Clear Story: 52% Waste
Extrapolating from ACM’s experience across hundreds of HVAC dealers, the conclusion is unavoidable:
Approximately 52% of all HVAC co-op marketing funds are wasted due to:
- Inexperienced marketing companies
- Ineffective advertising strategies
- Failure to answer the phone
- Failure to measure and manage lead closure rates
This is not a dealer problem alone. It is a system problem—one that manufacturers are uniquely positioned to solve.
Why HVAC Manufacturers Must Centralize Co-Op Marketing
HVAC manufacturers should partner with one experienced HVAC marketing firm—like All Contractor Marketing—that understands:
- HVAC consumer behavior
- HVAC digital marketing channels
- HVAC internal processes
- HVAC sales operations
- HVAC-specific data analytics
Standardization does not mean stagnation. It means measurable, repeatable success.
The Missing Link: Data Visualization Across the Supply Chain
The future of HVAC co-op marketing is not more tactics—it is data visualization.
ACM’s data dashboards allow:
- Dealers to understand how to maximize co-op marketing and close more leads
- Territory managers to identify underperforming dealers and help them mirror top performers
- Distributors to measure effectiveness across their footprint and understand true market share
- Manufacturers to identify national patterns, test strategies, and measure real dealer-level impact
This data enables manufacturers to:
- Refine consumer messaging
- Optimize regional strategies
- Identify strategic dealer partners
- Take back market share lost to private equity acquisitions
This is market intelligence that simply does not exist in today’s fragmented co-op ecosystem.
No New Investment Required—Just Less Waste
This strategy does not require additional spend.
It requires:
- Eliminating waste
- Eliminating fraud
- Standardizing execution
- Centralizing data
Partnering with a proven HVAC marketing company like All Contractor Marketing allows manufacturers to do more with the same dollars, while gaining unprecedented insight into their markets.
The AI and White-Label Trap
Artificial intelligence and white-label marketing suppliers have made it easy for anyone to claim they are an HVAC marketing expert.
HVAC dealers are not equipped to evaluate these claims. As a result, over half of co-op marketing dollars are quietly wasted every year, and this waste is only going to go up.
Manufacturers can no longer afford to ignore this reality.
Two Paths to Implementation: Stick or Carrot
There are two effective ways to move every dealer under one experienced HVAC marketing partner:
The Stick:
Dealers must use the designated marketing partner to receive the full 50% co-op. Dealers who opt out receive only 25%.
The Carrot:
Dealers who choose the designated marketing partner receive an additional 15% co-op match.
The carrot approach is often more effective and still costs less than the current 52% waste, while driving greater market share gains.
John Wanamaker Would Be Proud John Wanamaker never knew which half of his advertising budget was wasted.
Today, we do.
HVAC manufacturers now have the opportunity to eliminate that waste, build a data-driven future, and dominate market share in the new era of artificial intelligence.
Partner with All Contractor Marketing and let’s build the data-driven future of co-op marketing together to gain market share, eliminate waste, and grow your dealers. Contact Us Today
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