As the keeper of the marketing budget, it can pay (and save) to consider creative, out-of-the-box strategies to stretch your ad dollars. A media barter is a solution media buying and planning agencies leverage to help their clients maximize their promotions.
What Is a Media Barter?
The barter system exchanges goods and services instead of money. Many of the top global businesses in the world utilize bartering in their dealings, including 65% of corporations listed on the New York Stock Exchange and nearly one-third of small businesses.
Businesses typically refer to bartering as corporate trade. Firms like Active International and Icon International offer corporate trade as a financing option to fund everything from hotel lodging to travel to office supplies. Media is the business service expense most widely financed in corporate trade.
So How Does a Media Barter Work?
Corporate trade firms typically work alongside a media buying agency on behalf of clients. Together, they approach media outlets to purchase placements from the media plan. Instead of making a total cash commitment, they negotiate by offering products or services from the client. In some cases, it is the media outlet that begins negotiations to trade unsold inventory for goods and services.
Some businesses will establish a value for the trade and offer a “trade credit” instead of goods or services. Trade credits are typically valued at a dollar per credit and are exchanged for payment on media placements equal to what it would cost to purchase the ads in cash. Most media segments accept trade credits as a supplement or total payment on ad space. The corporate trade firms can afford to provide media buying agencies and their clients with this credit because in most cases they will then flip that inventory for a profit.
In either case, media buyers, corporate trade firms and the client will work together to reach an agreement for the ad placements. The deal is made upon approval by all parties.
Adding media barter as a funding option can allow you to build in more media placements to your current ad budget. This can be quite advantageous to companies that are otherwise restricted by their size or marketing dollars.
If your budget has decreased, supplementing your budget with media barter trade credits can allow you to maintain or increase your current advertising frequency level. Plus, liquidating unused product inventory can offset any possible loss from it not being sold.
Who’s Using Media Barter?
- Six Flags opted for a media barter in a campaign with Orion Trading. The theme park chain bartered free passes for media discounts, ultimately saving 20% on TV media buying and gaining 4000 visitors to their parks.
- An Ad Age article cites an unusual media barter from a restaurant chain that bartered $1 million in ground beef for a TV spot. The beef was sold to a state prison.
- The same Ad Age article also references Luxury watchmakers Milus, which funded nearly 75% of its print advertising media plan via a barter arrangement it made with a jewelry reseller.
- Pennzoil bartered pre-purchased cable media worth $1.2 million for a sponsorship activation at the annual South by Southwest festival. Their “Mario Kart Reimagined” generated 1 billion earned media impressions, $2 million in advertising value, and won their agency AdWeek’s 2014 Media Plan of the Year award.