Understand what it is…
Media barter allows advertisers and media owners to trade without having to pay 100% in cash for what they want to buy. In a barter deal, advertisers use their goods and services to part pay for the media they want. Similarly media owners trade some of their airtime/ad space to pay for the goods and services they need.
…and what is isn’t
It isn’t a quick fix solution – if the bailiffs are at the door, media barter can’t help you. But if you have capital tied up in inventory that could be working harder then media barter may be the answer.
Ditch your preconceptions
Yes historically there have been issues with the way some barter companies operated. But media barter when done properly is transparent and accountable. It is increasingly seen as smart business practice by a growing number of blue chip companies.
Check out who else is doing it
Advertisers ranging from SMEs to large multinationals use media barter to boost their media budgets and audience reach. In the UK alone it is worth between £250m-£300m and it’s growing. Ask your media agency for their view - many of the top 20 big media agencies now have a dedicated media barter specialist.
Get a feel for the deal
Deals are tailored to the needs of each advertiser/sector/media owner so each one is different. But broadly speaking advertisers transfer the margins on their goods and services to the media they want and so pay less for their media than if they were paying for it 100% in cash.
The media barter company distributes the advertiser’s goods and services via channels agreed in advance with them. Media owners exchange their inventory for goods and services they need for their usual business operations, making effective use of a soft currency.
Understand the deliverables
1. Return on Investment - where an advertiser buys their media through the barter company which in turn buys back an agreed amount of the client’s goods /services, delivering a guaranteed return on investment.
2. Cost savings - where an advertiser uses their product/services to part pay for their media rather than using 100% cash. This effectively results in a cost saving.
3. Budget creating - Advertisers can reinvest the savings from 1) and 2) in media campaigns, so creating additional media budget.
Examine your inventory
You’d be amazed at what can be traded - everything from top of the range car marques to insurance policies to premium alcohol brands. Even energy, holidays, luxury goods, event tickets, vouchers and electronics. So, almost anything.
Take care of the tax
All taxes (including VAT) are applicable as normal, as if the deal was being paid 100% in cash. So involve your finance team in any deal you do, and make sure you don’t come unstuck.
Stay in control
A good media barter deal fits in with an agreed media strategy - with the sole aim of optimising the media plan and making it more efficient. Media barter companies should not make decisions about what media you buy or the prices you pay for it. Make sure you and and your media agency remain in control at all times.
Frances Dickens is CEO of Astus UK