1. What is media barter?
Media barter allows brand advertisers from SMEs to multinationals to boost their advertising budgets and audience reach without spending additional cash, by using their products or services to part pay for media.
It also allows media owners to trade some of their airtime/ad space to part fund the goods and services they need.
Media barter companies like Astus facilitate the deal between brand advertiser and media owner to make sure all sides get what they want.
2. How big is it?
In the UK media barter is estimated to be worth between £250-£300m, accounting for around 2% of media billings and it’s growing. The reasons for this are partly economic – the current downturn means that marketers are under pressure to drive efficiencies which media barter enables them to achieve. In addition the media barter process has become more transparent and risk-free.
As a result media barter has become an integral part of the media plan – Astus works with more than 100 clients and more than 200 media owners in the UK and Europe. Many of the top 20 big media agencies now have a dedicated media barter specialist.
3. How does it work?
Media barter enables brands to transfer the margins on their goods and services to the media they want to buy and so pay less for their media that if they were paying for it all in cash. Deals are tailored to the needs of each brand advertiser/sector/media owner so each one is different.
Take a car brand which has a modest media budget which it wants to boost without spending more cash. The media barter company barters a media campaign for the car brand involving poster, TV and outdoor which is planned by the car brand’s media agency as usual. Bartering means that the client pays for the media partly in cash and partly in cars. The media is the same cost and quality as if it were non barter. The cars are sold discreetly at a discount to buyers who are pre-approved by the client. However the car brand still receives full value for the cars from the media barter company (i.e. £5,000 worth of car buys £5,000 of media).
4. What does media barter deliver?
There are three main outcomes to a media barter deal.
1. Return on Investment
Astus is able to create a unique Return on Investment for clients. Buying their media through us, means that we will buy back an agreed amount of their product. So effectively the client has a guaranteed return on their media investment before it has even run.
2. Using Part Cash and Part Trade to Fund Media Buy
This is a more traditional form of barter where the client is able to buy their media using a proportion of their product to fund a media campaign, rather than using 100% cash. This effectively results in a cost saving for the client.
3. Budget creating
The Return on Investment funds (from point 1 above) or the cash saving (from point 2) can be used to reinvest in media campaigns. Ultimately this means that the client has created more media budget than they had before barter was involved.
5. How does it fit in with existing media plans?
Media barter fits in with an agreed media strategy. It does not affect the prices media agencies work so hard for. Media owners understand this. Nor will it influence the scope of the media the media agency recommends. The aim of media barter is to optimise the media plan and make it more efficient. The client and the media agency remain in control at all times.
6. What can be traded?
Whatever you want! Astus has traded everything from top of the range car brands to insurance policies to premium alcohol brands, telephony, Insurance, flights, hotels and even frozen chicken!
Modern media barter is about innovation and smart thinking, using first line product not distressed stock.
7. Is it right for my business?
If you want to make your budgets work harder then media barter could be right for your business.
8. How can I persuade my colleagues?
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. Astus is happy to come in and explain how it works in more detail.
