Earlier this year – in the span of less than one week – two of the major advertising agency holding companies announced new barter media service offerings: WPP’s GroupM introduced “Midas Exchange”, and less than a week later Havas also announced plans to launch a barter division.
WPP and Havas thus joined other major agency holding companies Omnicom (ICON), Aegis (Carat Trade) and Interpublic Group (Orion Trading) in offering competition to the likes of independent barter firms such as Active International and Argent Trading.
With all of this activity afoot, the blindingly obvious question is “Why?” And of course, the even-more-blindingly obvious answer is “To make more money.” There certainly is nothing surprising about for-profit businesses trying to profit – and of course there’s nothing inherently wrong with it, either. Agency holding companies also no doubt view an internal barter offering as insurance against the loss of buying assignments for existing clients to external barter entities.
The basic promise of the barter-for-media model is that clients will obtain the same media and comparable quality for a combination of (less) cash plus barter credits obtained in return for unwanted items (distressed product, etc.). Barter firms do not disclose what they pay to media vendors – as a client, you only know what you pay the barter firm. The proposition, however, is that so long as your cost to the barter firm is acceptable, then perhaps you can live with not knowing what they are paying the media properties. Most barter professionals will tell you that non-disclosure is an essential element of the barter model (and that vendors would not be willing to participate otherwise).
On Barter For Media
As our clients and any agency we’ve ever worked with can attest, at MMi we are 100% agency neutral. Some individual buys may post better than others, some may be more efficient, and some more compliant to buying guidelines. Some processes are in alignment with best practice, and some are not. But when it comes to media accountability our evaluation of performance is 100% fact-based, and we make no assumptions going in to an engagement.
This same neutrality extends to barter firms and holding company trade divisions. We have extensive experience auditing barter buys, and our approach does not waver. As an advocate for advertisers, we would certainly be supportive of a model which provides clients the option to receive the same media buy for a combination of less cash and the trade of unwanted product, unused resources, bad debt, etc.
As such, you will not find here a condemnation of barter for media, a treatise on its potential pitfalls, or a cautionary tale about working with barter firms. Rather, we provide a brief discussion of barter within the context of media accountability: delivery, efficiency, compliance.As an advertiser, what do you have the right to expect from a barter-for-media initiative?
Expectations: The Obvious
Often, client expectations are set by the barter firms themselves in advance of the assignment. Some common statements:
- Same audience delivery expectations and guarantees as all cash buys
- Comparable qualitative elements (client’s desired vehicles, dayparts, etc.) – not just “undesirable” or “remnant” media
- Same cost as an all-cash buy (but for a combination of less cash and barter credits)
- Compliance to client’s buying guidelines, buy specifications and added value expectations
- When applicable, same option terms, guarantee structures, etc. as comparable cash buys
- Clout and experience comparable to traditional buying services
- Work with client’s advertising or media agency to assure that pricing and delivery expectations are met and buys are approved
All one need do is visit websites for the likes of Active International or ICON International, Inc. and find items such as the above spelled out in black and white as confirmation that these are indeed exactly the kinds of expectations which barter firms are setting for themselves in the marketplace.Although these items are straightforward, often clients do not establish a plan or methodology for assessing whether or not these elements have been delivered upon.
- Did your schedule deliver? Who will assess, and what methodology will they utilize? Who is responsible for identifying and recovering any owed audience weight (compensation for delivery shortfalls), and what are the timing and qualitative expectations for audience recovery TRPs?
- How have costs been negotiated with the barter firm, and how will actual cost performance be assessed (and again, by whom)?
- Has the activity met your expectations in terms of quality, vehicles utilized, daypart mix, guideline compliance, delivery of added value, etc.? How is this to be evaluated and quantified?
Without a plan to appropriately evaluate performance, clients are left in the position of deciding whether or not the effort was successful (and worth repeating) without having sufficient information to make such a judgment.
Expectations: The Less Obvious
When it comes to barter media initiatives, clients are of course most interested in delivery, price, and quality. No doubt because of this, the barter firms tend to focus their assurances in these areas.There is often substantially less discussion surrounding how the buys will be managed, stewarded, posted and reconciled. To be fair, these same areas are often the ones where clients have the least visibility and understanding when it comes to their traditional media agencies.
If the barter media proposition is essentially “the same media for the same price, with a combination of less cash plus barter credits” with the only limitation being that unit and package level costs with vendors will not be disclosed, than expectations with regards to buy management, stewardship, and reconciliation should be no different than they are for traditional media buys. Clients should expect the same best practices be applied to the management and reconciliation of their barter buys as to their cash buys – particularly given the resources and industry experience cited by the major barter firms, coupled with the fact that many of them are owned by one of the primary agency holding companies.
What does this mean? As a client, some questions to consider asking:
- Will an electronic media buying platform be employed to manage and reconcile buys, and will buys go into the platform on an individual unit level to facilitate tight schedule management and minimize risk of undesired changes?
- Will ratings (delivery) be estimated on a unit level, and will this estimated delivery be housed in the buying platform so that buyers can course-correct, secure in-flight ADU, and transparently assess delivery vs. guarantees?
- Will schedules of invoiced units be brought into the buying platform and matched against buys to ensure only buyer-approved units are accepted?
- Will a post be supplied? When? Who will generate it? What methodology will be employed? How does this compare to the practices of the client’s traditional agency?
- How quickly will audience shortfalls be identified, and within what timetable will restitution be received? Will the barter firm assume responsibility for making whole any delivery deficiencies?
- For barter units within agency holding companies, will buys be managed using the same software and protocols that the company’s “traditional” media agencies utilize?
- What role will the advertiser’s traditional media agency play in the process? How will it be compensated?
Why Worry About the Little Things?
If an advertiser is able to secure the obvious, important items … then why worry about delivery estimates, buying platforms, invoice matching, and the like? If the barter firm shows that it met objectives on delivery, pricing, and compliance then shouldn’t that be enough?
As specialists in media accountability, we at MMi would argue that it is precisely the transparency and accountability resulting from excellent buy management and stewardship which provide advertisers with the ability to fully assess – independently if they so choose – whether the barter firm (or any media agency for that matter) truly met expectations on delivery, price, and quality. As such, advertisers should expect nothing less.
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