How procurement and marketing can team up to save cash

Procurement is often seen as the enemy of creativity and big ideas by marketers; but the relationship doesn’t have to be adversarial and together the two can achieve great efficiencies.

Media barter is one such process that could result in benefits. It enables advertisers to achieve efficiencies by using their products and services to part pay for media rather than paying 100 per cent in cash. And because advertisers are able to use the margins on their products and services to part fund a media campaign, 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 per cent. However, as a process, it offers a creative way for purchasing and marketing teams to work together with finance to leverage a company’s assets and incrementally extend its budgets, without spending more money. 

So how does it work? Each team has a key role to play in a barter or swopping deal. Marketing secures the right media placement. Procurement ensures the value of any media acquired and also that the products/services bartered in exchange are traded in as effectively as possible. Meanwhile, finance ensures the overall budget stays on track.

Deals are then negotiated by specialists who trade a company’s assets and cash for media value.

A good barter specialist will work closely with the marketing team’s media agency to ensure the key communication strategy is never compromised and that any saving is real and accountable. On the product side, the specialist should listen carefully to core objectives across marketing, procurement and finance and suggest solutions that generate maximum return for the wider business.

So which products and services are suitable for such a deal? The most common are cars, flights, drinks and hotel rooms, but the list also includes utilities, telephony, computers, insurance, food products and more.

What happens to bartered products? Specialists trade them for media space within a closed network of upmarket media owners who need flights, car fleets, utilities and so on. This approach can offer companies the opportunity to grow their markets without impacting their existing distribution channels. A good specialist can also help establish products and services into routes or territories previously unreachable through traditional sales routes.

The need to drive value and increase cost efficiencies across all areas of a business is a constant. Media barter is just one way of doing this, however it is an approach that encourages marketing, procurement and finance teams to collaborate in developing a smart business process that can be implemented year in, year out.

Paul Jackson is COO of media barter specialists Astus Group



 

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