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May 2, 2006

Written by Bob Meyer, Editor of BarterNews

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From the desk of Bob Meyer...       05/02/06

Burgeoning Multi-Billion-Dollar Bartering In Film & TV Started Long Ago

Media research firm PQ Media did a study last year that showed 64% of products placed in movies and television shows are done on a bartered basis. The trading of “exposure” is a multi-billion-dollar way-of-doing business. (It accounted for $2.44 billion in 2005, and is expected to grow 15% a year through 2009.)

It started in the 1950s with the acclaimed movie, The African Queen, when actress Katharine Hepburn’s character was paid by Gordon Gin to toss its liquor bottles overboard.

Then in a 1967 beverage plug, a young Dustin Hoffman sipped a can of Olympia beer as he floated in Mrs. Robinson’s swimming pool in The Graduate.

The advertising technique really came of age in the early 1980s with the film ET. When M&M/Mars turned down director Steven Spielberg’s request for permission to use its candy in the film, he turned to Reese’s Pieces...owned by Mars’ rival Hershey Foods. The brief scene in which the candy was used set off a sales boom for the Reese’s candies.

Product placement has always been viewed as an alternative medium, but in the last few years it has become an established marketing tactic. By getting various products on trade, Hollywood saves a bundle of cash from its production budget. In return, products get immortalized on film.

With the average cost of making a movie now over $60 million, and marketing costs running another $20 million or more, studios are under intense pressure to shave expenses where they can. Bartering “product exposure” is a simple and productive way to offset costs.

Editor’s note: The product placement with the most sizzle could well be Learjet...the company typically provides its planes to studios to cart around cast and crew in exchange for the plane appearing in the movie.

Starbucks Trading On Their Distribution

When you have 5,500 North American stores and a sizzling positive brand, there is no end to what can be accomplished. First it was the marketing juggernaut’s move into music where the Starbucks buzz turned Ray Charles’ Grammy award-winning “Genius Lives Company” into a runaway, 1.3 million CDs best-seller.

Now it’s on to the movies...this recent move is indicative of the expansive thinking coming from their Seattle headquarters. What’s their ultimate goal? Becoming an entertainment destination.

Starbucks is a producer of the film Akeelah and the Bee, a story of a young African American girl winning a spelling bee. Although they did not put a dime into the production, they astutely leveraged their enormous distribution system...trading on their unique retail environment which attracts repeat customers up to five times a week! In addition to receiving a share of the film’s profits, they will sell the DVD in stores.

Looking ahead, the company has tapped the famed William Morris Agency to help them identify music, film, and book projects for future marketing and distribution consideration.

(Please feel free to forward our newsletter to your friends and colleagues. We have a “box” at the end of the newsletter for your convenience. See you next week. . .)

Grubb & Ellis Trades On Expertise & Network, Acquiring 22% Stake In New Spin-Off Company

A large real estate services firm, Chicago-based Grubb & Ellis, has completed an initial public offering (IPO) on the American Stock Exchange for a blank-check company.

The newly-formed Grubb & Ellis Realty Advisors’ controversial structure is so named because investors buy shares before the company identifies what it will acquire. (Blank-check firms consist of an empty shell company and a management team whose purpose is to raise capital to purchase an operating business.)

Grubb & Ellis plans to use its existing corporate network of 5,000 people in 38 states to help identify undervalued properties in secondary markets that G&E Realty Advisors could purchase, improve and resell. The company would also receive management and leasing fees, as well as disposition fees when the properties are sold.

The IPO raised $143 million. Grubb & Ellis made a modest capital contribution of $2.5 million and then traded on its expertise and network to obtain an initial 22% ownership in the newly-traded company. Their ownership position, valued at $30 million, reinforces the fact that an entity (whether an individual or other structure) can successfully trade on its various assets to build wealth. In this case, those assets were expertise coupled with an effective business network.

Trade Exchange Owners...
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Persistence Paying Off For Mardak

International Monetary Systems (OTCBB:INLM) CEO Don Mardak has been making regular appearances at various investment conferences, spreading the word about IMS to the investment community.

His most recent appearance was at the Financial Services Exchange (FSX) Investment Conference in Miami (FL) this past weekend. Mardak made two presentations to broker-dealer decision makers, and spent three days networking with high-profile investment professionals.

Mardak noted that the FSX conference series have been ongoing for 23 years, and the events have resulted in raising over $1.4 billion for presenting companies.

“During the past several months, we have had great success in presenting our company’s story to the investment community,” Mardak divulged. “This has resulted in a recent 50% increase in our share price, as well as a substantial investment in IMS shares by a professional fund.”

Last week IMS reported that its March revenue totaled $564,000, an increase of 42% over March 2005.

For more information on IMS see www.internationalmonetary.com.

The Growth and Use of Secondary Capital (New Money) Creates Unprecedented Wealth In Today’s New Age Of Possibility

There are many forms of secondary capital—which can be defined as any financial instrument that measures and communicates value in a common language. Would you like to see and learn more about the many forms of secondary capital?

We have 75 free, informative and inspiring, articles for you in our “Secondary Capital Section.” Check it out... www.barternews.com/secondary_capital.htm.

Steve Singer Leaves Barter Industry, Buys Budpak Inc.

For 25 years Steven Singer worked with National Commerce Exchange in Jericho (NY). He recently informed BarterNews that he has left the barter industry because an old friend (whom he’d helped 7 years ago) made him an offer he couldn’t refuse.

It began when Singer helped his friend, Bud Pion, start a business after an account had stuck Pion with 500,000 one-ounce plastic tubes. Pion sent the tubes to a company on Long Island which filled them with a first aid cream. Singer helped secure the package design for the tubes on trade, and the cream was then sold to dollar stores.

That item was so successful that several other products were added—Anti Itch Cream, Antifungal Cream, Cocoa Butter Cream, and an A&D cream. The firm, Budpak, now buys a million tubes at a time from Brazil, and sells the line nationally through a network of representatives.

Pion’s success was even more impressive, since at the time he started the company (after fifty years in the packaging business) he was 80 years old. Now 87, he wants to take it a little easier. Since Singer had been helping him with marketing and financial advice since the beginning, Singer was provided with an opportunity to acquire the company in an arrangement he couldn’t refuse.

He is now busy using his trade dollars to build a web site and update the computer system. Singer looks to manufacture the line in India or China, with plans to visit either country before production begins.

He looks forward to doing some barter transactions with many of his friends in the industry. To contact Steven Singer of Budpak, e-mail him at stevesinger@budpakinc.com.

Get New Money-Making Ideas And Valuable Contacts!

You can obtain useful, informative ideas and contacts in every available back-issue of BarterNews.

Is General Motors The Canary For U.S. Economy?

Bond guru Bill Gross, managing director of Pacific Investment Management Co. (PIMCO), the world’s largest bond fund based in Newport Beach, says the woes of General Motors are a preview of the troubles the U.S. could face.

“GM is a canary in this country’s economic coal mine, a forerunner of what’s to come for the broader economy,” contends Californian Gross.

Gross, often referred to as the “Warren Buffett of the bond world,” believes high labor costs, questionable competitiveness, rising health-care, and pension burdens are among the issues snagging GM...and they will afflict the U.S. in the near future, as well.

He says the longer-term fallout for America will likely be a weaker dollar, lower wages and higher taxes. So Gross is putting his clients’ money into the emerging Asian economies, where savings rates are higher and government promises to future retirees are smaller.

Our Web Site Has Added A Search Tool For You

Ever wondered if a certain topic, person, or organization has been written about on the Barternews.com website? Now you can easily find out, as we’ve added a search tool. It will quickly give you the answer to your questions, in 3 easy steps that take about 12 seconds!

At the top right of the page, just under where you sign up for the Tuesday Report you will see a little Google box. It is where you can (1) type in the name of a subject, company or person. Then (2) click the button for www.barternews.com to search the site, followed by (3) hitting the search button.

For example, if you wanted to search the BarterNews web site for other stories on Bill Gross—the story before this one—you would find that we have 27 stories on him.

Every barter company in the world is listed on our web site, click through to our Global List of Barter Companies.

Unique “Trading Alliances” Reported

1) The Foxwood Indian Reservation, home to Connecticut based Foxwoods Resort Casino, has entered into an unusual alliance with the MGM Mirage—wherein both entities will benefit.

Foxwood, wanting to expand its convention and entertainment business will gain access to MGM’s database of more than 22 million customers. It will use MGM’s established partnerships with other companies to help attract new restaurants and top-tier entertainment to eastern Connecticut.

The MGM Mirage, in turn, will have the opportunity to open a hotel and casino alongside one of the world’s most successful casinos...thus gaining brand exposure in the lucrative Northeast gaming market. The new MGM hotel will be operated by Foxwoods employees.

2) Bank of America is in the midst of trading its BankBoston operations in South America for a minority stake in Brazil’s second-largest private bank—Banco Itau Holding Financeira.

The barter endeavor for the stake in Banco would continue Bank of America’s recent practice of expanding in developing countries by acquiring minority interest in local banks.

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