How B2B marketers can achieve greater efficiencies on their marketing budgets
Few B2B marketers enjoy the size of budgets bestowed on those working for big consumer brands and yet the pressure to deliver marketing efficiencies can be just as intense. Colleagues in finance and procurement need to be reassured that each £ spent on marketing is working as hard as it possibly can. Media barter is a business process that is increasingly used by consumer-focussed brands such as Volvo Cars and Mandarin Oriental Hotel Group as a way of achieving business efficiencies. It works by allowing marketers to use their goods and services to part pay for media rather than paying 100% in cash. Because marketers are able to use the margins on their products and services to pay for the media they want, it costs less than if they paid for it all in cash. We are talking increments here – the uplift on a bartered campaign is around 15-20% – but when budgets are scrutinised and squeezed for value, incremental differences matter. This is supported by the fact that the media barter sector in the UK has grown from £200m in 2010 to its current level of £350m (gross media billings).
Media barter isn’t just the preserve of big consumer brands and high profile ad campaigns. If a B2B marketer faces pressure to make budgets and inventory work harder, then media barter may be the answer. It’s worth pointing out that modern media barter is about using first line product or services not just distressed stock. The product or services used are very diverse, as well as cars and hotel rooms, we also trade in event tickets, utilities, insurance, food items to name a few.
To get the most out of a media barter deal, it needs be integrated with media strategy and business planning. B2B marketers should discuss it with colleagues in sales, procurement and with their media agency if they have one. The media barter company should work alongside the media agency to ensure that the communication strategy is never compromised and the value generated is real and accountable. The finance team also needs to be involved because taxes (including VAT) apply to media barter deals in the same way as if the deal was being paid 100% in cash. As you can probably tell, embarking on a media barter deal is more of a gradual consultancy than a quick sell.
Media barter is a step-by-step approach to finding business efficiencies by using business assets to support cash expenditure. By using media barter to achieve incremental efficiencies, B2B marketers can continue the conversations with their customers and explore new channels for doing so, especially when different parts of the business are scrutinising every marketing penny spent.