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.