How to choose a Corporate Trading Strategy

Dean Wilson 22 Sep 2011

Corporate trade is coming of age. No longer the poor relation in the media world, it’s set to prosper in these difficult economic times.

Why? Well, media agencies and brands are starting to see how these businesses can effectively boost their media and marketing campaigns by unlocking value from underperforming assets – an increasingly important task amid budget cuts in a tough trading climate.

With the evolution of corporate trade the issue for media agencies is struggling to understand what their strategy should be. So I would like to put the record straight about the choices available.

If you are a global media agency with a huge client base at your disposal, such as Interpublic; having an in-house corporate trade division, as they do, could be an attractive option. Those tempted to set up such a division should be aware that this is the most high risk approach in terms of cost of investment. Sourcing experienced staff with skill sets alien to the normal agency requirements will not be easy or cheap.

There’s also the issue of conflict of interest with this approach that potentially limits the scale and scope of the in-house opportunity. After all, media agencies that are not part of the group will be worried about confidentiality and conflicts of interest.

Working with an independent corporate trade business is more commonplace. Media agencies can work with them in an exclusive relationship to handle all their corporate trade work, meaning they operate with a brand they trust. However, they must also remember that corporate trade companies have different strengths and weaknesses. This could potentially restrict the agency’s ability to offer the best solution in the market and deliver one that meets the needs of clients.

Most agencies are working with corporate trade partners on a recommended basis. By taking this approach they can introduce one or maybe two corporate trade companies to their clients after conducting due diligence on their behalf meaning no door is closed to you working with any of the other corporate trade players should the situation arise. In fact, some agencies have made a modest resource investment in order to smoothly coordinate this process. This means that clients get a choice of corporate trade business.

In my opinion, this is the best working solution for media agencies with corporate trade providers. By working in this way, agencies are able to offer flexibility and variation to their clients, based on their needs. They’ll also have access to independent corporate trade businesses who are the ones leading the way worldwide and so can successfully take advantage of their investment, skills and experience.

Dean Wilson, UK managing director and vice-president international division, Active International

Dean Wilson


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