Media barter is experiencing something of a paradigm shift. Once seen as a side-line somewhat questionable activity, it is now playing a significant role in the marketing and distribution strategies for companies ranging from SMEs to large multinationals.
Yes the recession has its part to play – when times are tough businesses need to find new and different ways of creating efficiencies. But media barter itself has developed more transparent processes for helping advertisers to increase their media budgets and extend brand distribution into new channels. With many of the top 20 media agencies now boasting specialist barter teams, media barter is becoming an integral part of the media planning process.
So what is media barter and how does it work?
Although the term barter has historical connotations, media barter is a 21stcentury business process which allows advertisers and media owners to trade without having to pay 100% in cash for what they want to buy.
Media barter companies structure deals according to advertisers’ individual requirements so each deal is different. But the basic principle is the same: advertisers transfer the margins on their goods and services to the media they want. By doing so, they are able to make significant cost savings on the incremental media they want, with the discounts they would normally expect. Ultimately this means they are able to create larger campaigns.
The barter company distributes the advertiser’s goods and services via channels agreed in advance with the client. Media owners meanwhile exchange their inventory for goods and services that they need for their day-to-day business operations.
Done well, media barter can add value beyond delivering cost efficiencies on media spend. For example the media barter process can help remove the risk of client experimenting with ad channels they hadn’t used previously and in doing so, increase the audience reach for their campaign.
We have seen this trend in action in relation to an increase in pan-European and pan-global media campaigns. Anecdotal evidence from our media owner contacts suggests that over the last few years more advertisers have moved away from launching pan-European campaigns in favour of smaller multi-local campaigns. But for advertisers wanting to put out one unified message across a large number of countries, a local-only strategy isn’t necessarily the most efficient use of time or budget. Allowing advertisers wanting to run pan-European campaigns to part pay for their media using media barter, has helped to reduce the perceived financial risk involved in a big pan-regional campaign. As a result, media barter can help put pan-regional media back on the media plan for a growing number of advertisers.
Media barter can also deliver value when it comes to product distribution. Most media barter companies are experts in discreet product distribution and re-marketing, and work to strict, pre-arranged criteria stipulated by the advertiser’s sales and distribution teams. This means media barter can augment an advertiser’s distribution strategy by, for instance, opening up new channels.
So what can be traded? Modern media barter is about innovation and smart thinking, using first line product not distressed stock.
Is media barter right for my brand? Media barter can add significant value when it becomes integral to media strategy and business planning. You’ll need to discuss it with colleagues in marketing, procurement, finance and sales and with your media agency. You should find the process is more like a gradual consultancy than a quick sell.