By Dean Wilson, UK Managing Director at Active International.
Despite corporate trade (or corporate barter as it’s often referred to) being a well established and growing industry, not enough organisations make the most of the opportunity to generate extra value from their surplus stock.
As a result, companies are often left having to ‘cut their losses’ with their surplus stock, which they could use to boost their ad spend to support their brands.
For those people who have not heard of corporate trade or know little about it, companies like Active International allow advertisers to maximise value from their underperforming assets, such as surplus stock. Active buys this with a “Trade Credit” for a greater amount than can be achieved for cash on the open market by the advertiser.
The advertiser then spends the Trade Credits on a range of services from media campaigns and printing to conference events and corporate hospitality.
To provide an example of how much value can be unlocked from surplus stock, Active International released over £91 million in value globally via trade credits last year.
The key factors advertisers should bear in mind when thinking about how to maximise value from their underperforming assets, include:
Only deal with the largest, established corporate trade operators in the marketplace. It’s these that have the financial stability that ensures they will be around in the long term. For advertisers it means they can safely spend their trade credits without worrying that the corporate trade partner might not exist in the future.
The corporate trade company should have a worldwide presence. It’s highly likely that your agency has various clients who want you to implement cross-border campaigns. A corporate trade company 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.
If you are considering using the services of a corporate trade company, ask which media agencies and brands the business currently works with. If they don’t work closely with the top media agencies, across the likes of Omnicom, Havas, WPP, for example, or blue-chip brand names, they are probably not well thought of or experienced enough, so it’s worth giving them a miss.
These corporate trade organisations are also unlikely to have strong relationships across a broad range of media owners, which they can leverage to ensure advertisers generate the best value from their trade credits.
It’s vital that brands only sell their stock via approved re-sellers. Not doing so can seriously damage their brand. To this end it’s the larger and more established corporate trade businesses such as Active International have the contacts to sell a brand’s excess stock onto approved re-sellers. Smaller ones are often going to lack the contacts with the appropriate re-sellers.
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 all parties. If they can’t deliver a deal which includes and benefits everyone involved, move on.
In this day and age technology has progressed sufficiently for corporate trade organisations to offer 24/7 reporting on how trade credits are being spent. This knowledge can be used to easily tweak trade credit spend in real time to ensure the brand constantly generates the best results from their campaigns.
Generally it’s the larger companies that have this technology. Always ask what procedures are in place before undertaking any appointment.
Corporate trade is here to stay and set to continue its strong growth. After all, it delivers extra value to brands and allows media agencies to generate increased value for their clients at no hindrance to their operation.
As a rule of thumb, both media agencies and brands should always look to partner with the biggest and most experienced corporate trade business in the marketplace.
Being an industry where experience, size, volume of contacts and the provision of the latest reporting technology is key to delivering value, it’s these corporate trade businesses that need to be identified and utilised.
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