We already have an advertising agency!

Woman saying noThis is something we often hear from people we approach about media trading with Evergreen Trading. The statement makes sense because after all, we are proposing to place a portion of their budgeted advertising. That sounds exactly like what their agency is paid to do, right? Sounds like a conflict.

These same people are then surprised to hear that we structure the transaction to fully compensate their agency. We buy the media at net, and instead of retaining the balance, the client keeps those funds to pay the agency’s normal commission or fee on the media that we place.

The reason we allow for agency compensation is that we are not an agency and we are not taking the place of the agency, nor do we wish to. The business models are very different. An advertising agency spends its client’s money on the media they plan and place, and for that role, they are compensated.

Evergreen Trading is in a different business. We invest our own money in the media our clients need or that which we project they will need. Our capital is at risk unlike the advertising agency who is, as mentioned above, spending their client’s capital. So we make our profit from our placement of the media – the difference between our investment cost and the client’s planned media cost. Most of that profit goes to the client as either an overpayment for a distressed asset or as a source of funds for an unbudgeted need.

Regardless, the client’s advertising agency continues to play an important role throughout our placement of their media. Since we benchmark the media costs to that which the client would normally pay, the agency provides us with those planned costs. Communication continues between us and the agency as the media is placed, and after the media has run, the agency is charged with reviewing the post and reporting back to the client and us their approval with the media that ran.

So, no, we are not taking the place of the advertising agency. They continue to have their job and we have ours. Even though there may be some initial trepidation about Evergreen Trading becoming involved in the placement of a portion of their agency’s client’s media, we have a successful track record of working effectively with our client’s agencies and even providing some unexpected value add to those agencies.

About Mike Lake

Mike is the Senior Vice President of Marketing for Evergreen Trading. When not playing jazz trombone he is probably obsessing about writing content that will capture the attention and interest of business people and fellow learning junkies everywhere.

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