Glossary

The vocabulary of dealer network marketing.

Co-op, MDF, NSCs, proof of performance — the terms automotive channel programs run on, defined in plain language.

Co-op advertising

Co-op (cooperative) advertising is an arrangement where a manufacturer or brand shares the cost of local advertising run by its retailers or dealers, usually by reimbursing an agreed percentage of eligible spend after proof that the activity ran.

Market development funds (MDF)

Market development funds (MDF) are budgets a brand makes available to its channel partners — in automotive, dealers — to fund local marketing that develops the brand's market, typically allocated ahead of planned activity rather than accrued from purchases.

MDF vs. co-op funds

MDF and co-op are both brand-funded channel marketing money. Co-op typically accrues from partner purchases and reimburses a percentage of eligible local spend after it happens; MDF is typically allocated at the brand's discretion against proposed activity before it runs.

National Sales Company (NSC)

A National Sales Company (NSC) is the national subsidiary or importer through which an automotive manufacturer distributes vehicles in a market — sitting between the factory and the local dealer network, and typically responsible for supervising dealer marketing.

Proof of performance

Proof of performance is the evidence a dealer or channel partner submits to show a funded marketing activity actually ran — live post URLs, photos, creative files, media schedules, and invoices — required before co-op or MDF funds are reimbursed.

Tier 1, 2 and 3 automotive marketing

Automotive marketing splits into three tiers: Tier 1 is the manufacturer's national brand advertising, Tier 2 is regional advertising by dealer associations or distributors, and Tier 3 is local marketing run by individual dealerships.