The Trade Promotion Paradox: why the money behind your promotions is now up for grabs

In our last blog, we talked about the Trade Promotion Paradox: retailers and their CPG partners negotiate more carefully than ever before, but despite that effort, the trade plan might still not work as expected. That's not a negotiation failure. It's caused by a disconnect across the planning systems and a lack of visibility into what might go wrong before it's too late to fix.

That disconnect has been survivable for a simple reason: trade funding is a significant pool of money in the retailer-supplier relationship, and there wasn't another channel of comparable scale competing for it. In the past few years, that has started to change. CPG suppliers have started reallocating trade spend toward retail media, and that shift is what changes what "survivable" means moving forward. For a retailer, that is not the vendor's problem to absorb. The dollars moving are the ones that fund your promotions and hold your category gross margin, and much of what leaves lands in media networks measured on impressions, not on whether the category grew.

What changed: retail media now competes for the same budget

Forrester puts retail media spend at $184 billion in 2025, rising to $312 billion by 2030, roughly twice the size of global television advertising, and names three drivers behind this growth: high-margin revenue for retailers running their own media networks, greater targeting precision for brands buying the ads, and the expansion of retail media into full-funnel advertising. Among those drivers, Forrester points to brands reallocating trade marketing budgets from in-store promotions into retail media specifically.

Retailers see the same shift from their own side of the table. In Deloitte's 2026 Retail Industry Global Outlook, a survey of 330 global retail executives, 83% expect trade spend to be diverted into their retail media networks this year, and 88% already consider their retail media network crucial to revenue and profitability. This isn't a trend retailers are reacting to. It's one that many are actively planning around.

That reallocation is not happening because retail media's measurement is stronger than trade funding's. By most surveys, it isn't:

• 55% of U.S. advertisers say their biggest retail media problem is the lack of standard metrics across platforms
• 49% name attribution as their biggest pain point

Retail media is winning the budget anyway, for a straightforward reason: it reports something. A brand can open a dashboard and see impressions, click-through rates, and a version of ROAS. Trade funding, in most organizations, doesn't offer an equivalent view. Budget tends to move toward the channel that shows its work, even imperfectly, over the channel that doesn't show it at all. Reporting is the low bar, though, and the market is already moving past it. Analytics and prediction are the capabilities buyers now rank first, and platforms are judged on what they can forecast, not on how completely they report. That is the ground trade funding can win on and retail media cannot: not a better rear-view mirror, but a read on whether a promotion will hit the plan before the money is committed.

Why this matters more this year than last year

Individually, neither of these two facts is new:

• Trade promotions losing money, on average, has been documented for years
• Retail media's growth has been climbing steadily for years

For most of that time, these were two unrelated facts. One described how well trade funding performed. The other described a different, smaller channel growing in the background. This year, for most retailers and suppliers building next year's plans, they have become the same conversation.

Here is the point: trade funding has lost money for years, and until now, that never cost anyone the budget. Retail media has finally grown large enough to be a real competitor for those same dollars, and it wins by reporting something, while trade funding in most organizations reports very little at all.

This is "why now". Trade funding didn't get worse. For the first time, there is somewhere else for this budget to go, so the inability to prove the promotional dollars behind the plan worked is no longer free.

None of this is only about retail media. Three shifts are running underneath it, and our research report, AI Can Only See Half the Deal, puts numbers to each. Retailers are moving from reporting what happened to forecasting what will: analytics and insights is now the single largest category of platform features CPG teams ask for, at 31% of all requests. They are moving from siloed pricing, promotion and funding systems to one connected thread: 39% of retailers say they can't invest in new capability until they first replace the fragmented systems they already run. And they are moving from dashboards that describe to systems that decide: agentic AI and automated merchandising are now the number one new-technology priority for 31% of retail organizations. The question is no longer who can show their work. It is who can act on it in time.

Closing the loop

In the first part of the Trade Promotion Paradox, we argued that fixing the paradox means treating planning, funding, execution, and reconciliation as one continuous loop, so any issues get caught while there is still time to act on them. The sharper version of that argument, given what has changed, is not about proving the spend after the fact. It is about acting in time: closing the loop is what lets you catch a promotion that is drifting off plan while there is still budget and calendar left to fix it.

Commercial Trade Intelligence™ closes that gap, and then goes past it. Retail media reports what already happened. CTI forecasts the promotion, funds it against that forecast, and flags the miss while there is still time to fix it. Measurement is the floor, not the point.

On a shared platform, retailer and supplier work from the same data, which changes a few things:

• ROI per deal, not per category: you can see whether a promotion is tracking to profit while it is still running and adjust it, not read the result months later
• Funding checked against forecast the whole way through: not just once at the start and once at the end, and checked against a demand forecast built on 25+ years of demand science, accurate to 90%+
• One number, not two spreadsheets: both sides look at the same figures, so there's less to reconcile after the fact
• Deals compared against each other: with data across 7,800+ CPG partners and 120+ retail banners, one promotion can be measured against similar ones, not judged on its own

That's what most trade funding doesn't have today: a clear, current answer to whether a dollar worked.

See which of your promotions will hit the plan before you fund them. Book a walkthrough of DemandTec's Commercial Trade Intelligence platform and walk into your next negotiation knowing which deals will perform.