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Why Barter is Smarter

Frances Dickens, Chief Executive and Co-Founder of Astus
By Frances Dickens  //  Tue 28th May 2013
Media barter is coming of age with a growing number of companies from SMEs to large corporates integrating it into their business processes.  As Astus UK, the UK’s largest media barter company celebrates its 10th birthday, CEO and founder Frances Dickens explains what media barter is, and why it really is the smarter business choice.

Media barter is a business process that allows advertisers to trade with media owners without having to pay 100% in cash for what they want, the benefits of which are obvious to advertisers. In turn, media owners exchange their media inventory for goods and services they need for their usual business operations, making effective use of a soft currency. Deals are tailored to the needs of each advertiser/sector/media owner so each one is different. Most goods and services with an intrinsic value can be traded, from cars, energy, hotel rooms, luxury goods, event tickets, vouchers, electronics, alcohol brands and even insurance policies.

Take an alcohol brand which has a modest media budget which it wants to boost without spending more cash. The alcohol brand’s media agency plans a poster, TV and outdoor campaign as usual. By involving the media barter company from the start of the process the brand will pay for the media partly in cash and partly in goods (bottles of alcohol). Importantly, the media is the same quality and discount level as if it were non barter. The brand’s goods are then sold discreetly at a discount to buyers who are contractually pre-approved by the brand. 

The key thing to remember is that a media barter deal fits in with an agreed media strategy with the aim of optimising the media plan and making it more efficient. 
Media barter when done properly is transparent and accountable. It is increasingly seen as smart business practice by blue chip companies, who use it to extend media budgets and explore new distribution routes, while making capital tied up in their inventory work harder.  

A decade ago, however the picture was very different.  Barter was based around a system where advertisers exchanged their products for notional trade credits which all too often couldn’t be redeemed.  Many advertisers and agencies rightly refused to give it a second chance. 

When we launched Astus ten years ago we introduced a more ethical, media delivery first model where advertisers receive the media they want before being asked for their products in exchange.  Other barter companies employed our model and barter’s image started to improve.

Today media barter in the UK is worth between £250m-£300m and it’s growing - many of the top 20 big media agencies now have a dedicated media barter specialist.
Why is barter the smarter choice? Barter helps advertisers extend media budgets, reinvest the savings and expand their distribution channels. For more information on how barter might work for you please visit Astus’ insight page here.
 
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