Decoding Distributed Marketing Jargon

December 4, 2014 Olivia Mitchell

distributed marketing jargon

Every industry has its buzzwords. Some companies are notorious for overloading their content with these buzzwords and assuming that their audience clearly understands what it all means. We’d like to think that we’re pretty good at not doing that, but we also understand that our industry -- the distributed marketing industry -- is a baffling one.  

As our holiday gift to you, we’d like to clarify the terminology of the phrases that we use the most.

Automated Marketing

Automated marketing refers to using a marketing technology platform to simplify, send, and evaluate complex marketing messages. With this platform, your partners should be able to not just order and send marketing materials with ease, but automatically customize and personalize them so that they are more relevant to your consumers.  

One example of this is trigger-based marketing. This means marketing to consumers based on certain criteria that they satisfy. These criteria might be date-based (e.g. birthdays, anniversaries) or behavior-based (e.g. geographic location, purchase history).

Marketing Automation

Marketing automation refers to a class of software that lets you move customers swiftly through your sales funnel. Such software integrates with your CRM system to score leads, track their activity, and send them appropriate marketing messages. Familiar examples include Marketo, Salesforce, and IBM.

Multichannel Marketing

Multichannel marketing means the same thing as integrated marketing -- that is, using complementary marketing tactics (or channels) to present consumers with a cohesive brand message.  

Channel Marketing (or Distributed Marketing)

Channel marketing (or distributed marketing) refers to working with and through channel partners to reach customers. This can exist in a B2B2C or B2B2B channel.  These partners are usually locally-based, giving them the grassroots credibility to which consumers tend to gravitate. They are the conduits for successful local marketing that strengthen your brand.

“My channel partners? Who are they?” you ask. I’ll tell you.

Channel Partner

A channel partner is a company or individual through which you, a channel marketer, sell or distribute your product or service to the end user. Such entities include (but certainly aren’t limited to):

  • Agents
  • Distributors
  • Franchises
  • Retailers
  • Sales representatives
  • Value-added resellers (VARs)

As a channel marketer, you provide these partners with as much support as possible to entice them to promote  your brand to their customers. Much of this support comes from subsidizing their marketing costs. This is typically done through two types of funds: co-op funds and market development funds (MDF). I mention these separately because, contrary to popular belief, there are differences between the two. Allow me to explain.  

Co-op Funds

Co-op funds are given to reward channel partners for some activity, such as being a top seller in your network. There are two key characteristics of co-op funds that set them apart from MDF:

  1. They accumulate on a predetermined, time-bound basis. Depending on your business needs, this basis may be monthly or quarterly.
  2. They are distributed according to set percentages. Co-op programs often operate by allowing channel partners to subsidize a certain percentage of costs for a given marketing activity. For example, your partners may be able to fund just 60% of their direct mail costs or only 70% of their event marketing costs.     

Market Development Funds (MDF)

MDF are discretionary funds and are not bound by the performance requirements embedded in co-op programs. Whereas co-op funds are awarded based on past results, MDF are awarded based on expected results. You might give MDF to help a channel partner run an event that you believe will generate substantial revenue for your brand.

Marketing Resource Management (MRM)

MRM refers to a category of comprehensive software that gives you oversight of all marketing activities, assets and operations. These activities include asset customization and production, marketing fulfillment, and campaign budget tracking. MRM software will also present in-depth analytics that illustrate just how well your marketing activities are performing.

I hope this helps you understand what we mean when we talk about our industry, our product, and our promise to help you make your local marketing more efficient. We at SproutLoud set out to provide clarity, not confusion. If there are any other terms you’d like us to define, feel free to let us know!

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Abstract: 
We have provided a primer for verbiage used in distributed marketing to avoid misunderstandings with outsiders on the topic and industry.

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