The weekly newsletter for everyone interested in barter--the world's most versatile business tool!
March 4, 2003
Written by Bob Meyer, Editor of BarterNews
Active International Continues Expansion Worldwide
The cover story of BarterNews issue #56 reported on the world's largest barter company, Active International. For the inside look you can read portions of that article on our web site. This past week we talked with COO Rick Fuest, and we'll have an update on the focus and strategies Active is now pursuing in issue #61.
You'll want to check out their thinking, and how they've built such a powerhouse. Incidentally, Active is now making over $800 million a year in media purchases. And their success isn't going unnoticed. Reuters International, Ad Week and the New York Times all interviewed Active's Fuest this past week.
Ibart Introduces Gift Card For Radio Stations
Radio stations in several locations around the U.S. have already embraced a new idea from Chicago-based Ibart (www.Ibart.com). It's the Ibart Gift Card, available in denominations of $100 to $500 and redeemable at numerous merchants through their web site.
Chris Sweis, Ibart's enthusiastic CEO, explained the thinking behind his company's new innovation, "Unlike other on-air giveaways, the Ibart Gift Card is similar to offering numerous gift certificates simultaneously, inasmuch as we have numerous merchants participating in our exchange in multiple categories. Our card has a much higher perceived value and, we believe, will appeal to more listeners."
Radio stations will find the bartering of unsold airtime for the gift cards to be a versatile promotional tool...not only to be used for promotional giveaways, but as another useful closing tool and client retention aid.
BXI Announces New Reciprocal Broker
Cristina Molina, a Certified Trade Broker with BXI for the past eight years in the Greater LA office, has been named to the BXI Exchange Corporate Staff as the new reciprocal broker. She is replacing Georgia DeGrant, formerly from St. Louis.
BXI is also conducting a boot camp for brokers this month. The intense sessions begin on March 20 and will be held in Phoenix. For more information on BXI, the oldest trade exchange in the U.S., check out the company's web site: www.bxinsider.com.
International Monetary Systems Increases Common Stock
The shareholders of International Monetary Systems (OTCBB: INLM) have approved an increase in the company's authorized capital to 90 million shares of common stock and 10 million shares of series preferred stock.
Don Mardak, CEO explained, "The increase will enable us to accelerate our growth strategy of being the leading consolidator in the barter industry."
Hotelier's CTO Likes Barter Possibilities
Wyndham International's chief technology officer, Mark Hedley, is like many IT executives these days. He's taken advantage of the cutthroat competition that the economy has stirred up in the telecommunications sector, reworking data and voice networking agreements.
He and his team are also evaluating new ways to reduce costs without cutting into the muscle of their IT operations. Among them is the possibility of offering hardware vendors hotel rooms in return for computer equipment.
"Trading the value of a guest room for the value of equipment is very do-able for us," exclaims Hedley, in a recent Computerworld story. Last summer, he and his team began evaluating which IT projects might be a good fit for these types of barter arrangements. And while he declined to name the vendors he has discussed this option with, Hedley says the potential for establishing such a deal is "very real."
"The extent of the changed environment is astonishing."
-David McCann, Editor-in-Chief, MeetingNews
In reading a trade publication recently, I found the comments of McCann, an industry insider, revealing...as noted below:
"When you're an industry insider, you understand things that are unfathomable to those on the outside. I remember when I first began to learn about the meetings business. I couldn't comprehend how it was possible that companies wouldn't want their attendees to always book the lowest hotel rates they could find.
"For a while I stumbled over the concept of room blocks and the fact that the more trackable volume you bring to a hotel for one meeting, the easier it is to negotiate a lower rate for the next one.
"I guess I might as well have stayed ignorant. Today, it's often a sound strategy to book low, non-group rates via the Internet and other means.
"Many meeting planners will be horrified to hear me say that. But for now and the foreseeable future, I believe planners should quit placing so much emphasis on room blocks, and instead encourage attendees to simply book the lowest available rate at a hotel that makes sense for them to stay at, whenever doing so is practical."
McCann goes on to his closing comments, "Planners would benefit by finding the serenity to accept the things they cannot change. The Internet surely is here to stay; its assimilation into hotels' yield-management efforts certainly is not going to be undone; and attendees without question will increasingly explore opportunities to pay less for hotel stays.
"Even when hotel occupancy levels get back to normal, it's entirely likely that there will be plenty of fire sales." His advice is, "Stop fighting so hard, planners. Spend your energy where it will have some impact."
Editor's Note: McCann's comments are relevant in many areas today. We all must "wake-up" and observe what is happening in our own particular industries. What changes do we see happening, and how are we responding to those changes?
American Consumers Paying Down Debt
Recent data suggests that people are hunkering down and getting their financial house in order. Last week the Federal Reserve reported that outstanding credit-card debt plunged $8.4 billion in December, the largest monthly decline since the data were first collected in 1968.
The savings rate, meanwhile, continues to rise, with consumers saving 4.3% of their income, the highest savings rate in five years.
And when consumers do spend, they've become more sophisticated in their usage of credit, shifting away from high-interest revolving credit toward lower-rate home-equity financing. (Two years ago, many economists worried that borrowers would simply run up their credit cards again after paying them off with proceeds from refinancing, but the latest drop in credit-card borrowing suggests that isn't happening.)
There is now evidence that many of the credit problems are confined to consumers with marginal, or subprime, credit. (Credit-card charge-off rate for subprime borrowers now tallies 18.61%, nearly three times the 6.51% rate for all credit-card users.)
David Rosenberg, economist at Merrill Lynch, expects consumer spending to be 2% this year...versus 3% in 2002. He thinks that such a pullback will yield dividends in the long run, putting consumers in a better position to ratchet-up spending again a year or two down the line.
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