We report the results of a sequence of magnetisation and magneto-optical studies on laser ablated thin films of ZnCoAlO and ZnCoO that contain a small amount of metallic cobalt. The results are compared to those expected when all the magnetization is due to isolated metallic clusters of cobalt and with an oxide sample that is almost free from metallic inclusions. Using a variety of direct magnetic measurements and also magnetic circular dichroism we find that there is ferromagnetism within both the oxide and the metallic inclusions, and furthermore that these magnetic components are exchange-coupled when aluminium is included. This enhances both the coercive field and the remanence. Hence the presence of a controlled quantity of metallic nanoparticles in ZnAlO can improve the magnetic response of the oxide, thus giving great advantages for applications in spintronics.