Practical Advice on Corporate Trade

Dean Wilson 07 Oct 2010

Dean Wilson, UK managing director at Active International, gives some practical advice for media agencies looking to form partnerships with corporate trade companies (which allow brands to sell under-performing assets in return for trade credits)...

Despite corporate trade (or corporate barter as it’s often referred to) being a well established industry, it’s only over the last few years that it has become a more visible and popular method for brands to generate extra value from their media spend. As a result, more and more media agencies are working with these organisations when planning and buying campaigns on behalf of clients and forming partnerships with them.

But before I go any further, for those of you who have not heard of corporate trade or have, but know little about it, here is a brief description: corporate trade companies allow brands to maximise value from their under-performing assets by buying these assets in return for ‘trade credits’ (for more than they would achieve in cash in the open market), which the brand can spend on a range of services from media campaigns and printing to conference facilities and corporate hospitality. To provide an example of how much value can be unlocked from surplus stock, we were able to release over £91 million in value globally via trade credits last year.

A lack of understanding of the role of corporate trade companies has lead, wrongly, to some nervousness in the media industry amongst those who have not worked with this type of business before. Also, some in the industry have had bad experiences with this sector in its early days, which have turned some off. However, the main issue for agencies is whether working with such an organisation will impinge on their planning and buying role.

The simple answer is no. Media agencies have nothing to fear from a corporate trade business. The role of media agencies with their clients remains exactly the same. All media planned is per the agency’s media plan; the agency plans and negotiates the media; all media is paid for at the agency’s negotiated rate, and the presence of a corporate trade business won’t affect their remuneration.

But what are the key factors to bear in mind when recommending a corporate trade organisation to a client with excess or unwanted stock, or even considering one to partner with as a resource to deliver extra value to your clients?

Firstly, brands and media agencies should only deal with the largest, established operators in the marketplace. It’s these that have the financial stability that ensures they will be around in the long term. For brands it means they can safely spend their trade credits at their leisure without worry that the corporate trade partner might not be around to spend it through.

The corporate trade company should have a worldwide presence. It’s highly likely that at your agency you have various clients who want you to implement cross-border campaigns. A corporate trade company with operations around the world can help generate extra value for media spend within the countries they operate in. It’s this reach that also provides added flexibility and value.

Dean Wilson


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