Bartering brings more advertising within the reach of smaller companies.
Trading products and services for advertising is a form of barter, a transaction not involving the exchange of money. With some research and a basic understanding of how trading products and services for advertising works, you can gain more advertising exposure at a low cost.
Media Outlet Advantages
According to the National Commerce Exchange, barter offers advertising outlets a way to turn unused assets into tangible goods and services. For example, a radio station that has unsold radio advertising time for which it will not be paid money can offer that advertising time to a company in exchange for its products or services.
Advantages to Companies Offering Products and Services
Barter provides the company exchanging the goods and services for the advertising with ads for no out-of-pocket money. The company also reduces its out-of-pocket expenditure for marketing and establishes a relationship with a media outlet.
Actions to Secure an Advertising Barter Arrangement
Determine the target demographics of the market you wish to reach with your advertising. Decide what type of media, such as a radio or television station, you want to approach for bartering. A list of potential partners is available from online media directories or consulting the reference desk of your local library. One helpful publication is the Standard Rate and Data Services directories. When you've developed your list of potential partners, find out what their advertising rates are so you have a basis of establishing the approximate value of the barter. The actual rates advertisers pay are often less than published rates because of such factors as length of contract and advertising frequency.
Complementary Arrangements
Consider the feasibility of a complementary arrangement where each party in the barter is serving the same target market. For example, an automobile dealership could give a car to a high-end, luxury magazine in exchange for print advertising in the publication. The magazine could have a contest to increase circulation and give away the automobile to a new subscriber from a new subscriber drawing.
Tips
Be persistent in seeking barter arrangements because not every media outlet will be receptive to your ideas. Some have a policy of not considering barter. Do not settle on the value a medium places on its advertising inventory. Negotiate the benefit of discounts outlets give to paying advertisers such as frequency discounts.
Keep good records of advertising used and remaining. Record the transaction for tax-reporting. The IRS requires that merchandise or services received in barter be considered income.
Evaluate each barter arrangement upon completion and determine what can be improved for future barter deals.
Tags: services advertising, advertising time, goods services, list potential, list potential partners