Unfortunately, the outlook for the UK’s economy is currently increasing fragile and uncertain. As a result, many clients’ marketing budgets – especially in non-traditional communications channels – are coming under intense scrutiny.
When factored in with the increasing proliferation of online publishers, we have a situation where digital advertising inventory continues to grow but is potentially faced with falling demand from advertisers. So a veritable perfect storm for those responsible for delivering, possibly already stringent, sales and revenue targets.
So, what’s the answer for those media owners, who want to maximise value from their advertising inventory and are keen to leverage all potential revenue streams available to them? A key option that has been growing in popularity in the digital industry, and beyond, is corporate trade.
Despite corporate trade, or corporate barter as it’s often referred to, already being a well established industry, it’s only over the last few years that it has become a more visible and attractive method for online media owners, media agencies and brands, to generate extra value from online marketing expenditure.
In the case of the digital industry, we have recently seen increasing number of media owners, ad networks and exchanges seizing the opportunity to use corporate trade to ensure maximum value is driven from their advertising inventory.
We currently work with a large range of media owners, across a wide variety of sectors including display and partnership activity directly with publishers, networks (including display, VOD, mobile and performance), as well as working on sponsorships and emerging platforms such as tablets.
Let me explain how the corporate trade process works; in summary, corporate trade generates incremental revenue for digital media owners. This can take several forms; brand new advertisers to digital, existing brands spending more year on year, or existing brands increasing the proportion of expenditure with those media owners conducting corporate trade.
We are able to do this by providing various goods and services to the digital suppliers, for example, marketing, corporate entertainment, funding cap-ex projects, conferences, flights or hotel rooms. In return for the above exchange, they pay us back with their advertising inventory which we then allow our range of clients to access for their digital marketing campaigns.
To demonstrate its value, Active International’s global turnover for the last fiscal year was $869m. But what are the key factors to bear in mind when sourcing a corporate trade organisation?
Firstly, digital media owners should only deal with the largest and most established operators in the marketplace. It’s these that have the financial stability to ensure they will be around in the long term.
The corporate trade company should have a worldwide presence. Many online publishers will have a global reach and will want to implement cross-border campaigns. A corporate trade business with operations around the world can help generate extra value for media spend within the countries they operate in. It’s this reach that also provides added flexibility and value.
Ask which existing online publishers, media agencies and also brands the business currently works with. If they don’t work closely with the leading online brands and top media agencies across the likes of Omnicom, Havas, WPP, for example, they are probably not as well regarded or experienced enough.
It’s vital that publishers only sell space to advertisers they are happy appearing on their websites to avoid damaging their brand. To this end it’s the larger and more established corporate trade businesses that are more likely to have the contacts with these advertisers and networks. Also, smaller ones are often going to lack the contacts.
Ensure the corporate trade business is open and honest. To find this out meet up with them before making an appointment to see what they can offer. They need to be able to deliver a deal which benefits everyone involved.
In this day and age technology has progressed sufficiently for corporate trade organisations to offer 24/7 reporting on where the inventory/goods and services exchange stands currently. For example, in reality a corporate trade company will provide the goods and services either ahead of, or after, placing any client’s advertising budgets. Generally it’s the larger companies that have this technology. Always ask what reporting procedures are in place before making an appointment.
Best practice advice in this sector is always to aim to identify and partner with the biggest and most experienced provider in the marketplace – size, volume and depth of relationships and the provision of the latest reporting technology is key to delivering value.
Corporate trade is becoming increasingly popular and prevalent in the digital industry and beyond, and we expect it to be a discipline that’s set to grow even more strongly in 2012.
Given the turbulent economic background, digital media owners who don’t consider corporate trade could be missing a trick.
Contributor
Paul Sumners is Director of Media Trading for UK operations at Active International.
