Media: Double Standards on Barter

Dean Wilson 01 Apr 2011

Media: Double Standards - Why barter deals are not media’s poor relation

- Explain your business model, with examples.

For readers who have not heard of barter or know little about it, companies such asActive International allow advertisers to maximise value from their own underperforming assets. These assets could be anything from a warehouse full of short-dated food or slow-selling motor vehicles to spare hotel rooms. Active buys these assets with Trade Credits that are worth more than the cash value which would be received if the assets were sold on the open market. The advertiser can then spend these Trade Credits on a range of media services, from advertising campaigns and printing, to conference events and corporate hospitality.

- What do agencies get out of it?

The right knowledge in order to provide sound advice and pose effective solutions to their clients on how to solve excess stock problems, as well as boost their advertising budgets. By being in a position to offer a comprehensive barter service, media agencies will strengthen their engagement with their clients - especially important in a precarious supplier environment. In an age where clients are increasingly looking to reward their media agencies for delivering value beyond just media, barter is key.

- And what do advertisers/media owners get out of it?

A barter deal is about striking a win-win agreement between the advertiser (or an agency’s client) and the media owner. A key part of any barter transaction is determining the commercial advantage for the media owner, such as an increased volume or share from the advertiser. In turn, the advertiser benefits by being able to use its underperforming product to fund the campaign with that media owner.

- Is it just for distress airtime/media space?

No. This is a common misconception - barter companies only deliver valuable media inventory. Any media campaigns delivered by a barter company will be at the same quality parameters as a cash-only deal. The advertiser’s media agency is integral to this process - signing off on the value and pricing element of any deal before it is confirmed.

- Why do you think barter has got a mixed reputation in the UK and what are you doing to improve it?

Today, the reputation of the industry is robust and getting stronger. Several years ago, there was a lot of room for improvement - but much work has been done to set the record straight and communicate with key influencers. There are now four players in the market, the amount of advertisers and media owners engaged in barter on an ongoing basis has increased dramatically and every major media agency network has dedicated staff to running their barter business. Endorsements for corporate barter are ringing from the highest levels of the industry, praising the integrity and efficiency of the services provided.

- What should I look for when selecting a barter company?

Ask which media agencies and brands the business currently works with. If they don’t work closely with the top media agencies or blue-chip brand names, then their reputation and experience is likely to be lacking. If this is the case, it’s worth giving them a miss. Furthermore, ensure they have strong relationships with a broad range of media owners, are able to offer deals that benefit everyone, will sell stock only to a client’s approved resellers, and have the technology for 24/7 reporting.

Dean Wilson


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