How Broadcast Media Make Money Through Barter Sales

Barter sales in the media, also called media barter, is one of the creative, out-of-the-box strategies for making money in broadcast media business. This is an opportunity which media buyers and planners utilize to help brands and agencies maximize their media buys. Companies and advertisers leverage media barter to spend less or nothing in terms of cash to have opportunity to promote their products in the media. This is a form of media buying that either does not involve payment of physical cash or reduces money spent in reaching to target consumers through the media. Many broadcast media organizations make money through barter sales. Let’s understand what this concept means.

What Is Barter?

First of all what does barter mean? This refers to exchange of goods and services in place of money. Bartering consists of trading goods and services without exchanging money. This is an age long practice which is known as barter system. It is still practiced today. In modern business world bartering is called corporate trade. Many companies make use of barter trading to fund business services and products from hotel and travel to office supplies.

What is Media Barter?

This refers to exchange of media services without really involving cash commitment. It can also be services provided by a company to get discounted advert space or sponsored programme in the media. Instead of paying the complete amount stipulated for sponsored media coverage, you offer your services to the media and pa

How Media Barter Works

Media barter is a business agreement between a media house and a corporate organization interested in the services of the media. The media house trades airtime for an advertiser’s product or services. Companies work with media buying agencies to negotiate placements in the media which they can get without a total cash commitment.  The company provides service in exchange for discounted payment for promotional spot in the media. A media buyer could be the one negotiating the barter agreement for a client. A media buyer is someone whose job is to make arrangements to pay for advertisement placement in the media – television, radio, or the internet, newspaper, magazine, etc. Media buyers are saddled with the responsibility of getting the most effective advertising space for their clients. They could also media barter deals for clients who then pay a discounted rate for services or just offer services without cash commitment.

Corporate organizations or media buyers reach an agreement to exchange their services or surplus product inventory for ad placements in the media. When all parties involved agree on a deal the barter process commences. Media agencies that have unsold media inventory (the space available in the media for ad placement) can also barter those placements in exchange for goods and services. For instance, a media house can give a hotel free or discounted advertisement space in exchange for hotel rooms for its journalists on assignment in a particular state or country. The hotel can even get mentioned in the news positively in exchange for services. The deal could be between a media house and fast food business outfit, airline, clothing company or such other companies. Media barter is a good opportunity for media organizations to make money. It allows you to build in more media placements to your current ad budget.

Broadcast media houses across the world also do barter deals that involve recorded or live shows from companies. As Reid (1996) observes, most TV barter deals involve an advertiser acquiring the rights to television programming – usually the sorts of shows that it thinks will suit its image. “Unilever goes for things like Wheel of Fortune, while PepsiCo likes the rock and lifestyle magazine programme, Passengers. The advertiser then takes its programming to the TV channels and offers it, not for cash, but in exchange for airtime and sponsorship credits,” (Reid, 1996, p.1). This is a typical barter practice which radio stations also engage in.

Companies also make a lot of money from media barter by giving a company advert airtime in exchange for products of the company which the media house can sell to other customers. It could be any kind of product manufactured by a company (computers, foodstuff, building materials, toys, anything that could be cols in the open market) which the company is willing to discard because they are in excess or is willing to offer for promotional space in the media. This is how media houses do good business for additional income.

How Media Organizations in Nigeria Do Barter Sales

Both print and electronic media houses across the world use media barter as one of their major income sources. In Nigeria, barter sales are also common practice in many broadcast media houses. Major television stations like Channels TV, TVC, and AIT do barter deals a lot either to save cost or make additional income. In terms of saving cost, such stations for instance, invite a company that does decorating business to decorate venues of events organized by the media house in exchange for airtime or sponsorship credit. This way, the media house does not spend money to get the services they need.

A company could also be asked to supply all the products (food items, cosmetics, gift items etc.) needed for may be an in-house sendforth, birthday, or any other event organized by a media house in exchange for advert airtime. The media could make some money from this where the advertiser is told to offer services for a discounted ad placement. So the media house makes some money in this instance.

Finally!

In summary, media barter is just one way you can maximize your ad spend. This is a win-win situation for both the media house and the company that wants to promote its product. In today’s world, media owners are always willing to barter their inventory in exchange for goods and services that they need for their day-to-day business operations. Companies that want their products promote leverage this opportunity to get media attention. The outcome is a win-win situation for both the media organization and advertisers.

 

 

The Author

Chinenye Nwabueze

Nwabueze is a communication researcher with several years of lecturing experience in Nigerian universities.

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