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Bob Meyer

Beyond The Limits Of Cash or Credit

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July 8, 2003

Written by Bob Meyer, Editor of BarterNews

A Look Back...
Barter Advertising Turning Trade Into Cash

(From time to time, the Tuesday Report reprints an interesting article from the archives of BarterNews. One of the more passionate barter devotees of the past two decades was the former Advertising Director of Chicago Barter, Scott Thomas. His experience through 15 years in the advertising industry included broadcast management, advertising agency management, audio/video production, and media buying. The following article was written by Thomas for BarterNews.)

No business attracts new customers without some form of advertising. From the yellow pages, to TV commercials, to cards on the church bulletin board, to "word of mouth" referrals, to the sign on your door, no customer comes to your business without first noticing you are there. Building a better mousetrap does not cause people to line up at your door...advertising the mousetrap does.

Through effective barter advertising, you can trade excess inventory for advertising that will attract new cash customers. You can trade $2,000 worth of tires from your inventory for billboard exposure on the expressway that could generate thousands of dollars in new truck tire cash sales.

You can trade $3,000 worth of fax machines from your inventory for newscast radio advertising that could generate thousands of dollars in new fax machine sales.

You can trade $300 worth of pizzas for a mailing of 10,000 special offer coupons to homes in your area for generating the cash sales of hundreds of pizzas.

Can you trade for all of your advertising? Almost certainly not. However, let's take a look at the cash you would save by trading for only 20% of your total ad budget.

Figure that at least 20% of your ad budget is variable. You try impulse buy that. If you normally buy advertising on four local radio stations, how crucial is the 4th station? It may be essential to continue to buy the top two or three stations on a cash basis. But, it's likely you could trade for advertising on a different radio station which would be at least as effective as the fourth station on your list.

Let's say you spend 50% of your budget in the newspaper, 25% on television, and 25% on radio. Do you think it would hurt your overall advertising effectiveness to take just 4-5% away from each of these media?

Now, let's take that 12-15% and purchase billboard exposure through barter to give you a daily reinforcement of your other advertising. The result is, for the same budget, you are reaching the same people you always reach, plus new people through a new advertising source, and you were able to save money and cash flow by trading for a portion of your total program.

On a smaller scale, if you buy a 10" display ad in your strong local paper, you probably won't hurt effectiveness by cutting it down to an 8" ad. The same readers will see you week after week. Now, take that 20% and buy advertising in a strong local coupon mailer, multiplying your advertising's reach without increasing your budget...and barter for the coupon mailer. Don't be afraid to "play" with the variable portion of your ad budget.

You can almost always increase your reach without increasing your budget, and you can almost always replace at least 20% of your cash budget through barter. Many times you can even do more.

Next week Part 2 will cover working with an ad agency, and using the dynamic leverage of "co-op" advertising funds.

Did you know that your classified ad gets one full year exposure in the
Tuesday Report archives?!

For information on The Barter Marketplace click here.

The Barter Marketplace archives click here.

Barter Activity Flourishing Around The Globe

  • Venezuela's government has made the decision to barter millions of dollars worth of oil to thirteen other Latin American countries.
  • Malaysia and Indonesia are bartering palm oil in exchange for 18 Russian SU-30 jet fighter planes. According to the Stockholm International Peace Research Institute, Russia was the most prolific exporter of armaments in 2002, racking up 36% of all global deliveries.
  • Indonesia is building and then bartering a $300 million fertilizer plant in Vietnam, taking back rice and sugar in the exchange.
  • Oil-rich Libya is bartering fuel to Zimbabwe in exchange for beef, coffee and tea.

Extraordinary Revealing Report For Business Owners - Click here.

Which Is Biggest Advertising Market...Magazines, Local TV, Or Yellow Pages?

U.S. businesses spend more on Yellow Pages advertising—$14 billion a year—than on ads in either magazines or local TV. Which is why the smart money, according to Fortune magazine, is now buying up the various "Yellow Pages" from the debt-heavy phone companies.

The new owners, private-equity firms which adore high-margin operations that throw off enough cash to pay for themselves, see the Yellow Pages for what they are—the advertising vehicle small businesses use.

Professor Of Finance Says It's Better With Barter

Where does a small business or startup go when it needs money to grow? The best financing route may be a detour off the beaten path. That was the message in a recent small business AOL article titled, "Finagling Financing in Credit-Starved Times."

David Brophy, associate professor of finance at the University of Michigan, listed barter as the top choice among the twelve financing options listed in the article.

AudioAudit Measures Ads Using New Technology

A new company called AudioAudit will assist ad agencies and other advertisers in the measurement of television and radio ads, i.e. advising when and if their ads are actually run.

In an industry where things change and ads sometimes get preempted, this new company offers technology that has the ability to know what ads ran when and how that stacked up against what was it can be fixed right away. It's done with semiconductors reading wirelessly across an audio signal.

Get New Money-Making Ideas And Valuable Contacts!

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

Judge Says Speculation Not Cost-Free

Personal Responsibility Preached, Rather Than Blaming Others

A 96-year-old senior judge, Milton Pollack, who has a long history of presiding over major securities-law cases has ruled that investors who bought dot-com securities were high risk speculators. And their lawsuits against the brokerage firms who sold them these securities are an attempt to twist the federal securities laws into a scheme of cost-free speculators' insurance.

Judge Pollack, located in New York, dismissed class-action claims brought against Merrill Lynch & Co. and its former star Internet-stock analyst Henry Blodget by investors in two Internet stocks that collapsed when the market bubble burst, saying they failed to show they were defrauded by Merrill's stock research. The Judge said research reports were "replete with risk warnings."

The following message was used to promote one's trade exchange. The exchange owner sent this flyer/message out to every member....

Trade Is The Competitive Edge—Spread the Word!

We have begun co-publishing a monthly newsletter entitled The Competitive Edge that is a generic overview of barter in today's competitive marketplace.

In addition to providing the newsletter to you (our members) we have also begun a prospecting campaign using the publication. Each month we mail The Competitive Edge to businesses that would be an asset to our exchange, and follow up with phone calls.

Many trade exchanges have successfully used this newsletter, published by BarterNews magazine, to educate potential clients about trade and therefore attract new members. And we hope to have the same results here!

You can help us spread the word by providing some counter space or other conspicuous area to display The Competitive Edge to your clients. Waiting rooms, bookshelves, reception areas...wherever your customers have a chance to pick up a copy of the newsletter, they also will have a chance to find out more about bartering in today's economy.

Each month's issues offers new insights into the advantages of using trade and how it can improve a company's cash position. Every business owner will find the articles interesting and educational.

To learn more about The Competitive Edge newsletter and how it can help build your trade exchange, click here.

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

If you haven't read the current issue of BarterNews, get yourself a copy now! Orders are shipped the same day we receive them. (Click on Order Form)

Here And There. . .
  • China has issued new rules banning cartels and price-fixing, filling a major gap in the regulation of the country's increasingly market-driven economy and setting the stage for future antitrust legislation. The new regulations will take effect November 1.
  • After a heyday in the late 1990s, when hundreds of IPOs were offered each year to investors, with potential first-day gains of 100% or more, the IPO market has slowed to a standstill. There have been only a dozen initial public offerings this year, raising $2.8 billion, compared with 58 by this time last year which raised $22.6 billion, according to New Jersey data firm Thomson Financial.
  • Have you signed up to receive a summary via e-mail of the Tuesday Report every week? If not, go to the top of this issue (right hand corner) and sign up!
  • California wineries are smiling after a U.S. Court of Appeals for the 5th Circuit in New Orleans ruled that a Texas law barring direct shipments of wine, to consumers from out-of-state wineries, is unconstitutional. The ruling comes as California's wine industry mounts a major legal campaign to challenge laws restricting wine shipping across state lines directly to consumers.

    (Excellent California wine is available on trade, but only to members of trade exchanges who live in the state. In the foreseeable future it's expected to be available throughout the USA.)

  • Speaking of wine...the Federal Trade Commission (FTC) issued a report concluding that if states lifted restrictions on Internet wine purchases, consumers could save up to 21%.

    Plus the agency cited there would be no real danger of providing minors with another way to buy alcohol-which is the most prevalent argument states have used to ban interstate sales. In short, the report poked holes in several arguments against online sales, and suggested the bans are being used as barriers to competition.

We welcome your comments, questions, and observations.
? Copyright BarterNews 2003. Redistribution of BarterNews content expressly prohibited without the prior written permission of BarterNews.

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