COOP Is a Four-Letter Word, and MDF Is Its Three-Letter Abbreviation

Given that over 70% of the $105 trillion in global GDP in 2024 flowed through the channel,* it makes sense to dedicate investment to building preference and driving demand. Each tier in the N-tier economy requires a unique strategy and precise execution. Brands that don't invest do so at their own peril. So why the controversy and conflicting views on this investment? Why is COOP (aka “cooperative”, aka MDF, aka Market Development Funds) still considered a 4-letter word?

Before we answer that, let's take a step back. At RVLVR, we do a lot of work with fab(less) semiconductor companies and their OEM customers. The brands involved rarely sell directly to their customers, but typically sell through the channel, which involves distributors and/or resellers aka, "channel partners." These channel partners then sell to businesses large and small.

Channel partners bring deep relationships, local knowledge, bespoke solutions, and many other benefits. But with all the players involved, there's an opportunity for waste, disconnects, and little-to-no data-driven decision-making or attribution. And like many things, the negatives often receive more attention than the positives.

So what's the endgame?

It starts with transparency and strategic thinking and ends with accountability, data-driven reporting, and "proof of performance" aka PoP. Should MDF or COOP fund a golf event? Sure, if it’s part of a bigger plan or strategy.

Co-marketing is hard. There are multiple brands, brand guidelines, and other considerations in play. Because of this, trust is critical. As data has become the fuel that powers marketing campaigns, reporting, and other motions, all the players involved in the N-tier game have become protective of that most valuable asset. And data processing agreements (DPAs) and other safeguards only go so far. So what's in store for these programs and how do marketers prepare for success?

Transparency

If you're dispensing MDF, demand transparency and ask questions. If you're consuming MDF, be prepared to share, share, share!

While we all rely on contracts and other docs to provide air cover, nothing beats establishing and reinforcing trust. While the AI agents nibble at the edges of every position in existence, one thing the machines will never have is the ability to develop and maintain intimacy or an interpersonal relationship.

Success metrics

Years ago, we were working with a distributor and after hundreds of campaigns, we determined that simplifying success metrics was the only way to scale. We came up with the concept of “Land, Brand, and Expand.” Each play had a different objective and a different way of defining success. When you start with the end in mind, it drives efficiency and first-principle thinking.

While challenging, marketing with a combination of brands presents an opportunity for alchemy. How can you mix multiple brands and generate results? The answer is with killer creative – and not just creative design, but creative thinking about programs and marketing initiatives that only a combination of brands can unlock.

Tech enables many of the things above and provides an objective perspective on performance. Successful MDF programs leverage tech, at a minimum for reporting and PoP.

Most successful campaigns evolve based on data. This is tough to do with MDF because of all the parties involved and the approvals required. However, to drive real results, marketers must be willing to listen to and apply the data, i.e. follow the successful patterns and discard the unsuccessful ones. While it’s easy to get attached to a creative concept or design, marketers must be unsentimental and willing to admit when ideas don't play out. Flexibility and optimization go hand in hand.

When we consider the potential of COOP or MDF to enable a brand to stand out and drive sales, the ire those abbreviations produce seems, perhaps, a bit misdirected. It’s not the WHY that causes confusion and frustration. We know why MDF is essential and even HOW – or at least the key ingredients – to make it work. Maybe the consternation comes from the perceived difficulty of putting the whole recipe together – finding the right tech and the right team.

But if brands can keep their eyes on the prize – and hold strong to the guiding principle of data-driven transparency – maybe COOP will still be a four-letter word, but like a few other four-letter words we’ve reappropriated, it can be an exclamation point.