Unlike Single Source, Multi-Source, and Corporate Asset Barter, the client does not have any product to use as partial payment for advertising, either to media outlets (i.e. radio and television stations, cable systems, networks, magazine publishers, Internet companies, etc.) or to BarterAds.
BarterAds replaces a portion of clients’ cash budgets with BarterAds-Provided Products which cost BarterAds significantly less than the traditional 85% net paid in cash to media outlets.
The increased margin is shared with clients.
Here’s an example of Corporate Asset Barter.
- ABC Hospital has a $1,000,000 cash budget planned for its advertising campaign.
- BarterAds negotiates media valued at $200,000 (20%) in exchange for an equal value of BarterAds-provided products.
- As opposed to costing $170,000, ($200,000 minus the 15% standard agency commission), the BarterAds-provided products cost $100,000.
- ABC Hospital pays the balance of its advertising campaign, $800,000, in cash.
- RESULT:
- ABC Hospital Receives receives $1,000,000 in advertising, AND
- SAVES $70,000 net in cash advertising expense.
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Total Ad Budget: Less: Cash Portion: Agency 15%: Net Cash to Media: Trade Portion: Merchandise Cost: TOTAL NET COST: ADDITIONAL SAVINGS: |
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$ 800,000 $(120,000) $ 200,000
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$1,000,000
$ (680,000)
$ (100,000)
$ (780,000) $70,000 |
