Opinion - Generation Media

Making budgets go further with barter

With Generation Media estimating that between 7-10% of marketing spend this Q4 will be with partners that advertisers are testing for the first time, Jonathan suggests this offers an opportunity to explore barter and make media budgets go further .

Due to the fragmented and fast paced nature of the media landscape, toy brands are using an increasingly varied number of media channels to reach audiences with their hard fought for media budgets. Within this diaspora of channels, there are of course a multitude of capabilities and KPIs that make direct comparison fraught with inequalities. From a very topline perspective however, the view over the last 10 years indicates that whilst media budgets have increased by around 4-5%, the cost of media (based on equivalent children CPMs) has increased by over 100%.

Layer on top of this the unfavourable economic conditions, and it becomes clear that toy marketers, more than ever before, need to find solutions to produce more from relatively less. Intelligent, data fuelled strategy and execution are the cornerstone of this, but there are other options available to further enhance this. Barter, more latterly known as corporate trade, could be one such solution.

Barter is a form of trading commonly used within but not exclusive to media. At its core, it allows a brand to trade unsold stock for media credits, which can be used to supplement media spends under certain stipulations (or alternatively traded for other goods and services such as telecoms or travel to help the balance sheet). Previously it had a reputation for taking stock from advertisers and then passing on

to resellers at a heavy discount with little thought to the consequences for existing retailer relationships. Nowadays, there are more stringent checks in place, dictated by the advertiser, to ensure that no stock enters a market without prior permission. It has evolved over the years to allow brands to take advantage of barter solutions without the need for stock to be exchanged (commonly known as a stock waiver model).

There are of course stipulations to the use of media credits. First and foremost, they must form part of an overall media spend, they cannot be used to purchase media outright (this will typically range from 5-20% of the total dependent on media owner). In challenging periods such as this, increasing the output of media spend (or saving the equivalent in cash) could go a long way to achieving sales targets.

Perhaps the most important thing to media partners, when deciding whether or not to accept barter as a forms of trade, is proving incrementality. An advertiser needs to be a first time or lapsed spender with the media partner, or demonstrate an uplift in spend year on year in order to justify barter. It’s also important to note that there are many media partners, notably Google and Meta, who do not trade via barter at all. Historically this was always problematic for the toy market given that Linear TV was traditionally so dominant. With high reach available at low cost, Linear TV could fulfil on many marketers’ objectives and therefore command a significant share of spend. There was little to no justification for Linear TV partners to accept barter. In the modern media landscape for kids, kidults and parents alike, we talk at length about the burgeoning opportunities in market. Advertisers, in order to meet objectives from expanding reach to driving conversion at the online checkout, have been turning to an ever-expanding roster of partners. Linear TV now only commands a 20-25% share of UK toy media spend, with YouTube now accounting for the lion’s share. We therefore estimate that between 7-10% of spend this Q4 will be with partners that advertisers are testing for the first time. These offer the perfect opportunity to explore barter and make media spends go further than ever before.

If you’d like a no obligation audit of your 2024 media strategies (and beyond) to see how barter could benefit your business, get in touch today.