A Brief History of Trade Promotion Management

The concept of a manufacturer assisting its retailers in advertising and promoting its products goes back almost as far as the concept of the brand name. The oldest surviving written program is one from the Warner Corset Company (now Warnaco) from the early 20th century.

Trade promotion marketing (or "co-op advertising," as it was known then) began its serious growth in the middle of the 20th century and really took off in the 1980s when it acquired a reputation for being more effective and more trackable than national advertising. It was in the eighties that trade promotion first began to reach the point of accounting for 50% or more of all marketing spending.

The growth of trade promotion over the past twenty years or so has been phenomenal, and it has grown from the old accrual-based co-op advertising to include a multitude of funding types and all sorts of spending. The management of these programs has always been the sole responsibility of the manufacturer. Many manufacturers began using third party audit and service firms beginning in the 1950’s processing claims and actually acting as paymasters cutting checks and credit memos. As technology began to increase, these companies, now known widely as "outsource service vendors" continued to excel at the management and administration of trade promotion.

Sarbanes-Oxley has now forced manufacturers to look outside and begin to reengineer their entire trade promotion practice, processes, and policies to avoid the costly failure to comply with strict new standards. Further, the rise of trade spending as a percentage of gross revenue has tripled since 1984 and the focus on ROI and trade promotion analysis is bringing an entirely new justification to the need for a company like TradeOne.

In the future, whether it is forced by government regulations or pure mutual need to do a better job of aligning goals and objectives, collaborative planning, measurement and analysis of trade promotion activities between manufacturers and channel customers will bring a new dimension - an evolution in trade promotion management.

TradeOne is at the forefront of that revolution!