Are marketing co-op and market development funds (MDFs) paying off for participants? What are the key challenges with these types of programs?
The researchers defined co-ops as programs where marketing funds are made available by brands to local business partners based on sales, and MDFs as programs where funds are issued by brands to partners in advance of sales.
Below, key findings from the report.
- 46% of the local businesses surveyed say they participate in at least one co-op or MDF program.
- Local business owners who use co-ops/MDFs say 30% of their annual marketing budget comes from these programs, on average.
- Only 52% of available co-op/MDF program funds are used by local businesses, the analysis found.
- 73% of local businesses that participate in co-ops/MDFs take part in more than one.
A quarter of local businesses say signing up for co-ops/MDFs is their top challenge with the programs; 18% say getting customized marketing materials is a top challenge.
Half of brands believe co-op/MDF programs probably help with sales; 38% say they definitely drive sales.
Only 17% of brands say they spend a significant amount of time measuring the success of their co-op/MDF investments.
Some 92% of brands struggle with proving the value of co-op/MDF programs to local businesses; 86% say the programs can be confusing for partners.
About the research: The report was based on data from a survey of 257 US local businesses owners and 348 US marketers at corporate brands with over $250 million in annual revenue.
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