Archive for September, 2012


Kimberly ArmstrongIn discussions with executives that are not familiar with the new best practices around the Corporate Trade business model (also referred to as Corporate Barter), I occasionally find myself addressing incorrect or 28-year legacy perceptions about how a Corporate Trade transaction works. So today’s blog focuses on educating around some of the most common myths around Corporate Trade.

Whether you’re a CXO, Procurement VP, Agency or Marketing Executive, don’t let any of the following myths prevent you from exploring Corporate Trade. You may be missing out on a strategic solution to unlock untapped value from your business.

Myth 1: You need a ton of excess inventory to enter a Corporate Trade deal.

Truth 1: No. You can fund your Corporate Trade transaction with first line inventory, real estate, and almost any asset imaginable too. Also, if you have no inventory now, Corporate Trade firms like Active International can fund and trade your media while you provide the inventory at a later date.

Myth 2: The media will not be the same. It’s remnant inventory.

Truth 2:  It depends on the Corporate Trade partner.  Some Barter firms employ a practice of “real time trading,” a technique used to create trading positions only after the client has identified its qualitative and quantitative media specifications.  This trading practice can result in undesirable media or force a client to alter the integrity of their media plan to accommodate their media inventory.  It’s important to select a reputable Corporate Trade partner who has a wide array of trade relationships already in place with sought after media providers. Active International acquires unrestricted future purchase options from the media providers–we don’t invest our capital to acquire “remnant” positions. If the media planned is available in the cash market, it is available to a reputable Corporate Trade organization.

Myth 3: Corporate Trade companies are trying to replace your media agency.

Truth 3: Corporate Trade companies absolutely do not replace your agency. Your agency should play a critically important role in the transaction and remains a partner throughout the relationship. In fact, your agency is the mastermind of your media plan. Nothing is booked until you and/or your agency have the opportunity to review and approve the proposed media buys.

Myth 4: You pay more for your media through a Corporate Trade company.

Truth 4: With independent Corporate Trade firms, all media is based on your existing net planned benchmark costs. The Corporate Trade Company simply enables you to pay for your existing advertising costs differently using a combination of cash and Trade Credits.  The key is being transparent about your benchmark costs and selecting a Corporate Barter partner who is independent from large media agency ownership. Two independent firms are an added check and balance to maintain the integrity of your media rates when they collaborate with one another. Not every company that calls itself a Corporate Trade or Barter Company has the extensive trades in place to deliver the value on a long-term and consistent basis.

Myth 5: Inventory ends up in places where it can compromise your business and your brand.

Truth 5: Any inventory is only sold subject to your approval and sign off. Many organizations ship to the approved buyer so they know exactly where the goods are going.  At Active International, we understand the sensitive nature of inventory liquidation and our client’s brand integrity is at the forefront of everything we do. In fact, for added peace of mind, we recommend and support our clients selling the inventory themselves to the approved buyer, therefore having full control and responsibility for it.  Delivery to a buyer is door-to-door.

Myth 6: It creates too much extra work.

Truth 6: A reputable Corporate Trade organization’s role is similar to your agency’s buying arm. While there are a couple of extra steps, companies like Active International have designed a seamless process to collaborate with you and your agency of record, and charge no service fees.  Happy Corporate Trade clients will advocate that the financial benefit is worth the extra step or two.

Your Turn:

What are your unanswered questions about Corporate Trade?  We will address it personally and post the answer in an upcoming blog.

Cheers,

Kimberly Armstrong

Active International

Getting to Know Us: Nikki Rollins

This week on “Getting to Know Us”, I chatted with the vivacious and extremely talented Nikki Rollins to discuss her role here at Active International.

Explain your job as you would to a 5-year-old:

I strategize and develop varying degrees of partnerships. Oh wait, a 5 year old? I make friends.

Why Your Role and why @ Active?

Active is a dynamic work environment so there is never a dull moment.

Most memorable moment at Active so far?

I had an agency ask me for help on an unexpected issue.  When it was all done they sent me a really nice basket with loads of treats for the team in thanks.  It was the nicest thing! I just wish I hadn’t left on vacation and had gotten to enjoy some of the delicious snacks. I still have the card in my office though.

Tell us about your charitable cause of choice and the last thing you did to support it?

Sick kids is near and dear to my heart. My monthly and annual contributions are small in the grand scheme of it all, but I know it helps them develop new cures that are world renowned. But my favourite part is volunteering. If you’re ever having a bad day, those kids will take your amazement for the human spirit to all new heights.

If you weren’t in your current career you would probably be ……

A Pilot.

Adjective your family would use to best describe you?

If you ask my son, he says “silly mommy”.

Adjective your Customers would use to best describe you?

The most common seems to be reliable.

Adjective your best friend would use to best describe you?

Well, I asked and the word is “scintillating”.  I had to Google it too.

Biggest Trend Impacting Your Area of the Business To Date?

Businesses are most definitely seeking new cost savings and efficiency drivers.  Active is a smart solution for these, without sacrificing quality.

What’s the most innovative thing you’ve seen a customer do to unlock value from their assets?

It would actually be from an agency who was seeing shrinking ad budgets and cancelations because of inventory issues with the client.  They had such a good experience working with us on another client that they asked us to come in and help.  What a smart way for the agency to add value to their client and demonstrate real partnership.

Favourite Ad of all time?

Virginia Hey Oil of Olay Bugsy Brown 1989I know it’s shocking because clearly I was barely out of diapers at the time this came out.

Kimberly Armstrong

Kimberly Armstrong, Active International

Despite an uncertain global economy, one thing has remained on a steady incline –advertising investment. Zenith Optimedia’s ad spend forecast predicts a jump of $24 million in North America and almost $100 million around the world from 2010 to 2014.

Meanwhile, CXOs across North America are seeking ways to improve their cash flow and reduce operating expenditures. More than ever before, marketers are put under the microscope each month to produce results and deliver a positive ROI.

How does an advertiser effectively protect the integrity of their media strategy while being tasked with slashing their budgets to support corporate cash management initiatives?

Many are turning to Corporate Trade (or Corporate Barter, depending on your semantic preferences). Here are 7 reasons why they’re making a smart decision.

1. Trade Credits are a proven way to lower the cash outlay on your Advertising expense.

The Corporate Trade industry has established a 28-year old track record , growing currency of Trade Credits. Once you’ve obtained Trade Credits, you can use those credits to pay a portion of your invoice across a variety of business expenses, media being the most popular. .

2. There are many things your business can trade in exchange for Trade Credits.

Companies often think that they only reason to use corporate trade is to address a problem, however, in the normal course of business, many things happen. Packaging gets redesigned, weather is unpredictable, fashions change. As a result, the types of inventory that can be traded in exchange for Trade Credits is virtually unlimited. And it’s not just limited to inventory. Here are a few examples:

  • Re-branded product
  • Last season’s clothing or accessories
  • Perishables e.g. groceries
  • Product labeled with expired promotions
  • Outdated electronics or technology such as mobile phones and personal computers
  • Obsolete capital equipment including old machinery or furniture
  • Excess or problem real estate
  • Unwanted, costly, sponsorship commitments
  • Debt owed

3. By reducing your cash costs, you can redirect the “savings” towards other programs you’ve wanted to launch.

Let’s face it – as marketers, we never have a big enough budget.  All too often that really big, really innovative  idea is trimmed back because of budget concerns.  Whether you’re a client side marketer or leading an agency, bringing a strategy to the table that puts more dollars behind those big ideas is a good thing.  And with Corporate Trade, you’re not just limited to traditional media.  Advertisers can use Trade Credits across virtually any medium available in the market thanks to the strong relationships with media providers.

4. You can start turning those tough agency conversations around.

How many tough conversations have you had with your agency around resources and budget?  How many times has your agency been sent back to the drawing board? With agencies being marginalized every day, it can be challenging to maintain the level of true partnership you want (and need).  Corporate Trade puts money back in your pocket, empowering your agency to execute your brand to its fullest potential.

5. You don’t need to sacrifice your need for flexibility.

As a Corporate Trade / Barter partner, it is understood that many businesses require adjustment to schedules with limited advance notice. For example, at Active International the process is customized to the needs of our clients and has been designed to accommodate changes to specs/schedule.

One of Active’s clients, a leading home & garden retailer, makes many media buying decisions based on the upcoming weekend’s weather. They rely on Active to be flexible and accommodate schedule changes with very little notice. It’s no wonder they’ve been a client of ours for over 20 years.

6. You’re a Global business? No problem.

At least not if you count on an established, global Corporate Trade partner. You’ll find that good Corporate Barter firms also allow the flexibility to transfer trade credits from country to country.  Companies like Active International have presence in 14  countries around the world. This means that inventories can be distributed outside your local market, avoiding channel conflict and expanding your distribution channels. It also means you can use your Trade Credits globally.  Give your international sister company a call; they may already have Trade Credits available to transfer to you.

7. Your CFO will love you.

Trade Credits help to improve business-wide cash flow while avoiding loss on significant assets.  In fact, your Trade Credits can also be used and transferred to other areas of the business.  At leading firms such as Active International, count on the widest depth and breadth of fulfillment areas where Trade currency is accepted – including business expenses such as travel, freight, and retail merchandising.

Your Turn:

How are you balancing business cash flow requirements with the integrity and scope of your advertising plan?

Cheers,

Kimberly Armstrong

Active International

%d bloggers like this: