Like any industry, Corporate Trade has its share of jargon. Here are a few terms and definitions to help you as you consider whether our solution is right for you.
Commonly referred to as Barter, Corporate Trade allows companies to pay for marketing, goods and services with their own products or services. In some instances they can also use redundant equipment such as production lines, office furniture or even property. They will typically receive a multiple of two to three times the value of the inventory they are using to pay with.
Barter is the term most commonly used for Corporate Trade within the marketplace. At Active, we perceive Corporate Trade as the evolution of Barter and a smart way of doing business today. Clients have more options and receive significantly more value than ever before.
The use of Trade Credit to supplement campaigns is common practice across all media. In all cases a portion of the booking is paid for with the Trade Credit issued to the advertiser by Active and the remainder is paid for in cash. The proportion paid for in cash relative to Trade Credit is referred to as the “Cash/Trade Ratio”. For example, a campaign which is paid for with 10% Trade Credit will have a Cash/Trade Ratio of 90:10.
Full Service Agency
The advertising you see on your television screen, on billboards in publications or online is the result of a multi-disciplined creative, planning and media buying process. In most cases, an advertiser will select different companies to carry out each discipline to provide the perfect mix for their requirements. A Full Service Agency, as the name suggests, offers all of the disciplines under one roof.
Media Buying Service
Media Buying is the vertical discipline focussed on procuring space, time or an association with media assets such as sponsorship. Media planners traditionally sit alongside media buyers and, as a team, they seek to obtain media advertising at the best price in the best place at the right time. They utilise industry audience research and proprietary data to inform their choices and benchmark pricing. This is a highly competitive and fluid marketplace which is subject to the pressures of supply and demand. Media buyers will know when to book well in advance to secure highly demanded space and when to play the short term market during periods of low demand or increased supply.
Corporate Trade Company
A corporate trade company offers a wide range of services by creating trading relationships with service providers. These relationships are based on investments and trades that create a cost advantage. They are not based on negotiating for better rates but rather, using trade to lower the cost of services.
Buyers and resellers of unused inventory. These include discount retailers and e-tailers as well as other channels such as employee sales, global distribution channels and many more.
Trade Credit is the currency of Corporate Barter. It is a flexible way of providing you with credit to spend on your advertising campaigns.
How Trade Credit Is Obtained
When you have identified stock or assets you want to exchange for media, you will be issued a Trade Credit in an agreed ratio to the value of that stock. So, if stock is on your balance sheet at a value of $1m but the realisable value in the market is $300k Active will take the stock and issue you with a credit of $1m which you can spend on media. Your agency and media buyer has negotiated the media you buy. There is no reduction in quality or access; you simply pay for some of it with your Trade Credit.