Contrary to popular belief, Bartering is not a response to the crisis because our model follows a structural logic rather than one in step with the current economic climate.
Bartering is a financial strategy that improves the working capital of advertisers, and of media, if used in an efficient, controlled manner.
It is also a tactical tool, allowing brands to improve their visibility by helping them to finance their media purchasing better.
All these reasons are part of a medium to long term view which, despite the crisis, remains the fundamental of any society. And yet, we are the only ones to have our accounts certified and the only ones to work with auditors when they ask us for an accounting doctrine.
For us here at MBB, bartering is a real financier's job.
Philippe Gimond
Chairman of MBB
Answer some questions on bartering and win the best from iPad with Offremedia Panel
In 6 questions and 5 minutes, Offremedia panel gives you the opportunity of taking part in a draw to win the best from iPad: the 64giga wifi + 3G version.
Just answer our express survey on the world of Bartering and join our professional panel, if you haven't already done so!
The survey closes on Wednesday 23rd June at 8pm.
« Va donc chez Speedy !! »(Why not go to Speedy), Jacques Le Foll, CEO, explains the success of this slogan, which has lasted for 30 years.
You are seen as leaders in the fast fitter sector, how have you succeeded?
Yes, we are one of the top companies in fast fitting and repairs and this leadership position has been built up around a simple concept: fast repairs, without appointment, based on a very dense network. Our network now includes over 500 centres in France with expert, motivated staff. SPEEDY also enjoys a very strong reputation that has been built up over the past 30 years of working in France.
How would you define the competition in your sector?
Our competitive market has become global: it includes car dealers, auto centres and some specialist outlets such as tyre sellers. All of these use new offers and services that are tending to make the market more uniform and more professional.
You are the only one not to advertise on TV, what is this decision based on?
This is a strategic and budgetary choice. To date we have believed that a strategy based on promotion can be implemented most efficiently with a radio + poster campaign.
What triggered your interest in Bartering?
Bartering interested us because it offers an efficient response to our stock problem. This was weighing heavily on the balance sheet and was proving difficult to sell off. Technical parts are of interest to only a very limited number of buyers using discount prices.
We have chosen strategic use of bartering, on a case by case basis, based more on a stock management approach rather than a media approach.
Of course we use bartering to finance our media campaigns, but we also used the opportunity to finance our latest convention at a Paris theatre, attended by our 410 Centre Directors.
Bartering, as seen by Philippe and Mathieu Calleux, Chairman and Managing Director of the Calyptus agency
As directors of one of the top financial communication agencies in France, what is your opinion of the Bartering model?
Before looking carefully at the MBB financial model we did have some very strong preconceived ideas. The concept seemed rather obscure to us, without any real economic benefit or added value for the advertiser.
And then?
With MBB we have realised that Bartering creates efficiency inasmuch as it means that the unsold items of both advertisers and the media can be reabsorbed, the scale of which is not always automatically perceived. With a financial eye we noticed that Bartering has a favourable impact on advertisers' working capital, once stocks leave the balance sheet, that is to say once credits opened up by advertisers are used.
We believe that whilst Bartering is tactical for the advertiser it is also highly strategic for the media, because the model enables them to win over new customers and improve yield management.
What risks have your identified and what are the answers to them?
In Anglo-Saxon countries, the Bartering model is used extensively and has become a habit, whether BtoB or BtoC, or even CtoC. In France, it is considered as an opportunity and remains extremely marginal.
If Bartering is to be deployed large scale, the financial community, which may still perceive this type of operation as window-dressing, must be made aware of the possibilities it offers. For the time being the practice remains confidential but it would be useful to create an accounting doctrine and identify Bartering as a recognised management technique.
Market point of view: The drinks sector will always be thirsty for Bartering.
The drinks sector (excluding alcoholic drinks), 308 000 K€ investment in 2009, is a sector which continues to grow (+145% in 2 years). Not only because it is mainly made up of big world groups representing between the 7 of them 85% of advertising investment in 2009, but also because the drinks markets is constantly being disrupted by the arrival of new products. Whether in terms of packaging, taste or size, supermarket shelves are subject to the same investment wars as the media.
We are clearly going to witness a peak in advertising investment just before the summer, with a very captive TV market, due to the very great general public striking force of this media.
For all these reasons, the drinks sector is very open to Bartering.
- • On the one hand because "product" launches generate unsold items that can easily be re-valued and resold on secure markets that are used to taking this type of goods.
- • On the other hand because advertisers on this market constantly need to advertise in order to stand out in the eyes of the general public, as well as to obtain favour from major retailers.
MBB manages the Barter credits of several benchmark advertisers in this sector.
