Advertising

Virtually every trade exchange member regularly pays cash for something that could be bought on trade. Bartering for advertising can be a powerful way for your business members to reach new customers and generate sales, especially if they have excess capacity or inventory that can be exchanged.

Advertising is the best way to use Trade Dollars to attract cash business. Advertising media, including radio, television, magazines, newspapers, billboards, and direct mail, are all available on trade. After all, there’s no way to store advertising media and sell it later, so media companies welcome trade payments.

If a minute of available advertising time passes at a radio station without an advertiser buying it, that minute is lost forever. It can’t be put back on the shelf and sold tomorrow. The same is true in various ways for all other advertising media.

Bartered advertising is very affordable, particularly since a business’s Trade Dollar income generally represents new business. This means the cost basis in a company’s bartered advertising dollars is very low.

For example, a restaurant may have food costs representing 30 percent of the price of a meal. Since barter represents new business the restaurant would have been unlikely to attract, the actual cash cost of those Trade Dollars is 30 cents on the dollar. There is no additional cost for rent, electricity, insurance, payroll, etc. to service the additional business. The only expense is the incremental cost of the food.

Using Trade Dollars, a restaurant can buy advertising to bring in new cash business for less than a third of the regular cash cost. And advertising is a readily available barter commodity, one that represents an immediate opportunity to generate new cash sales. In the example above, the restaurant has tripled the purchasing power of its actual cash cost.

Not everyone recognizes the opportunities barter represents, but anyone can learn if a broker takes the time to explain all the possibilities. It just takes some creative minds and exposure to new ideas to help fit barter into the every day way a business enables sales.

How to influence advertising trades in your exchange:

Identify valuable resources within a business, which can be used to earn trade credit for payment of advertising such as unsold capacity, excess production, products, or services. For example, a hotel could barter unsold rooms. A restaurant could fill empty seats, a car dealership could even trade a less desirable vehicle sitting on their lot.

Identify Potential Trading Partners:

Look for businesses whose target audience aligns with the barter exchange’s media availabilities.
Consider referring complementary businesses. For instance, a coffee shop could barter with a digital marketing agency, who can facilitate creative and ad placement with an exchange member.
Explore your member’s trade balances to help large balance accounts spend it on advertising to increase cash sales.
Local chambers of commerce or business associations can be good resources for finding companies looking to increase sales of their perishable media.

Offer Advertising to High Balance Members:

Clearly define the opportunity to spend trade instead of cash to increase cash sales.
Facilitate terms that are mutually beneficial, ensuring both members feel they are getting a good deal.
A written agreement or media contract can be helpful in outlining the transaction to avoid any misunderstandings.

Benefits of Bartering for Advertising:

Expanded advertising reach: Members gain access to new audiences and markets without a cash expenditure.
Reduced cash outlay: Members preserve cash by trading at their cost of their products and services.
Optimal use of excess capacity or inventory: Members can turn unsold products, services or capacity into valuable advertising opportunities.
Building relationships: Trading fosters connections between business owners, potentially leading to long-term partnerships and referrals.

By taking a strategic approach to providing barter opportunities in advertising, your members can effectively stretch their marketing budget, reach new customers, and increase sales.