What is barter and why do I need it?
This week, we bring you a guest post from our friend and specialist Avvy at ABC Barter Consultancy.
Lots of our clients are turning to Brazil Street to drive additional value on their media plans.
Why does the word barter sound familiar to most of us? Barter is an age old concept. When the butchers paid the bakers meat in exchange for bread!
Barter is the simple exchange of goods and services between two parties.
How does it work?
The straightforward concept of barter has evolved over the years. It is now a far more elaborate and sophisticated model, providing financial solutions for businesses.
In the media world, this means turning something that a client doesn’t want into something that they do.
It is a different way of paying for media. As a result, we create a margin to benefit everyone in the chain, including agencies and media owners. When opportunities are identified in media plans and budgets, we can use barter to create extra value. This is then reinvested back into media plans or used to fund other client objectives.
Barter can work in many different ways. Some clients use inventory deals that facilitate the sale of surplus product in return for media inventory to pure cash. An example of an inventory deal is where a travel client part pays the barter agency in cruises and cash for their TV campaign.
In return for funding a TV media owners’ business cost, the barter agency gets paid in TV airtime. This brokered deal creates an incremental margin. The TV campaign doesn’t cost the client 100% cash. The barter agency also sells and markets the cruises onto other clients. This brings incremental business and PR for the travel client. As a result, the TV media owner also saves on their expense by paying using their inventory too.
What if I don’t have stock?
Some clients don’t want to take the surplus stock route to barter their media plans and that’s fine.
Extra value can still be unlocked within campaigns where the media is bartered with the media owners. In these instances, the client benefits from cash value. Value is often reinvested back into the media plans to make the client’s budgets work harder. This works particularly well when a client is investing in a new media channel or is a lapsed advertiser.
In all instances, the barter model is completely risk free for clients and fully auditable.
This different route of media buying creates an incremental return on media investments without affecting the quality and price of media.
Why do I need it?
With a UK market exceeding £550 million, the importance of barter is ever growing.
The key to a successful trade is for us to understand your business’ individual needs. Each barter agreement is unique.
We’ll support you through a variety of challenges. For instance, you may need to re-route unwanted stock due to the pandemic. Or, you want to drive additional ROI on sales and advertising investments. Perhaps you need to find budget to invest media production or research costs. The right way of bartering is always to generate savings without compromising media plans and objectives.
How can we help?
We always look to maximise every bit of value and return from our client’s media investment.
At Brazil Street, we work closely with a barter expert and are offering you a risk-free way to assess barter as part of your 2022 media mix.
So why not get in touch to see how the buying power of barter can benefit your business?
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