Channel partners are leaving valuable Market Development Funds (MDF) unused, a phenomenon that has drawn industry attention.

Rachel Brindley, Senior Director of Channels at Omdia (sister company of Channel Dive), noted that as vendors increasingly focus on marketing-driven demand generation and customer engagement, many partners are failing to maximize their use of MDF.

"Partners are not fully tapping into the potential of Market Development Funds, and their usage is not up to par," she said at Omdia's recent event in London,the Channel Transformation event,she stated.

According to Omdia's survey, more than 40% of partners are unsure which MDF-supported activities had the greatest impact on their business.

"They don't know the actual effect of these MDF funds, cannot measure the return on investment, and cannot clearly explain what happened," Brindley added.

These findings indicate that, in a context where vendors expect partners to proactively drive demand rather than merely close deals, partners may be missing out on both funding and business opportunities.

One reason partners struggle to fully utilize MDF is the wide disparity in marketing maturity within the channel.

Large partners are building dedicated marketing teams, deploying automation platforms, and establishing performance measurement processes for activities, while smaller organizations are constrained by limited resources and lack clear insight into which activities yield results.

"There is a clear divide here," Brindley said, adding that as partner programs evolve, marketing capability is becoming a competitive advantage.

She added that channel companies that can measure activity performance and demonstrate business outcomes are more likely to maximize MDF investments and build closer relationships with vendors.

This challenge is particularly acute when customers engage with vendors and partners early in the buying process. Brindley pointed out that potential customers begin consuming vendor content independently before they contact sales teams or channel partners.

"Customer content consumption is indeed shifting," she said. "They engage earlier in the buying cycle, so by the time they reach out to you or a partner, they may have already read white papers, listened to podcasts, and done some research."

Partners need to enhance their capabilities to reach potential customers earlier in the buying cycle, beyond using the traditional assets provided by MDF programs.

But the responsibility does not lie entirely with partners.

Omdia's survey shows that nearly 90% of channel companies consider marketing activation crucial to strategic vendor relationships, yet more than half say vendors do not provide sufficient marketing resources.

"Partners need to be better at leveraging these Market Development Funds," Brindley said, "but vendors should also provide more support to help partners use these funds effectively."

As vendors expand incentive scope from product sales to the entire customer lifecycle—including co-selling, deployment, adoption, and expansion—the stakes are rising. Brindley warned that vendors will allocate MDF budgets based on partners' marketing maturity and measurable outcomes.