What is corporate trade and how does it work?

Any company, regardless of industry, that allocates a portion of their marketing spend to consumer advertising should consider trade-enabled media investment strategies. While most of these companies are medium to large in size, any business that spends more than $5MM on consumer advertising is a good candidate.

Programs work best when Finance, Procurement, and Marketing align around the asset, financial outcome and growth investment.

There are few things that can’t be traded. We’ve traded everything from excess inventory and retail store displays to whole manufacturing facilities and jet aircraft. Soft assets such as unwanted sponsorships, ad time, reward points, and gift cards can also be used.

In return for these assets, clients receive television, radio, print, digital, and place-based/out-of-home media. Regardless of the asset traded, clients can recover up to the full cost or book value in media dollars spent against their media plan.

Other opportunities can include obsolete or discontinued inventory, returned goods, raw materials, real estate, and leases. Each opportunity is evaluated individually for value, restrictions, and feasibility. Gift cards, loyalty obligations, sponsorship assets, and advertising inventory may also carry value when they can be responsibly activated and redirected toward growth.

Trade-enabled media is a smart option for companies looking to positively impact their bottom line, eliminate unwanted assets, or fund additional marketing investment. Companies often look to media investment when faced with surplus or excess inventory, other corporate asset problems, and/or shrinking media and marketing budgets.

Media trade typically involves collaboration between senior stakeholders across the Marketing, Procurement, and Finance teams. It is essential that all these stakeholders understand the benefits, process implications, and KPIs that will impact their respective teams as well as the company as a whole.

Because programs that use media trade always deliver a financial benefit, the buy-in process often begins with Finance. Marketing is also instrumental and should be included once the primary objective of the program is determined. Finally, Procurement should be brought in to ensure the use of proper evaluation and onboarding processes.

There are two questions that should be considered when confirming the positive and incremental value of a trade-enabled media investment program. First, did you receive the incremental financial value you expected? Second, was there a positive, negative, or neutral impact operationally?

If you implement a program that uses trade to gain a higher financial return on an asset, success is measured by the price paid to you for the asset, plus the proper execution of the media buys at your historic and planned media rates. The media buys must also adhere to all other media buying requirements (such as network mix, daypart distribution, gross rating point levels, etc…). Some clients hire third-party media audit firms to ensure that the media value and media process meet 100% of the expected standards.

If the objective of the program is not asset related but rather focused on gaining greater media efficiencies or incremental marketing reach, success is measured by the media budget savings or the verified incremental increase in media value for the same budget. The verification of media value is the same as mentioned above and the use of a third-party audit firm may be appropriate.

The operational impact of a program that uses media trade is measured by how well the program integrates with your current asset management and media buying processes. The media trade firm should absorb much of the asset management workload and media buying hours that otherwise would have to be performed by client personnel or your current media agency.

We’ll start by discussing the nature of your inventory and where it can and can’t be sold. We’ll then work to sell your product for the highest possible price, staying clear of your current retail and online customers. Working collaboratively, we create a distribution plan that moves the inventory in a non-disruptive manner, taking the form of a list of agreed account or market restrictions where the inventory cannot be sold. The distribution plan is contractually agreed upon and may contain assurances stipulating that the buyer will sell it direct and not wholesale, or that packaging or tags will be altered to eliminate references to the manufacturer in order to avoid product returns.

Corporate trade is a financial strategy for recovering more value from underperforming assets and putting that value back to work. Rather than accepting conventional recovery on eligible inventory, equipment, real estate, or other assets, a corporate trade firm purchases the asset at an agreed value and the company fulfills an associated media commitment over time.

The terms are often used interchangeably, but corporate barter can suggest a simple exchange of goods for advertising. Modern corporate trade is a structured financial transaction involving asset valuation, capital investment, media economics, controls, and measurable outcomes.