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04/27/2010

The Midas Exchange Enters Corporate Barter Arena

WPP (NASDAQ:WPPGY) has announced the formation of a new corporate trading division to help clients secure media credits in exchange for underperforming assets. Named The Midas Exchange, the new company will be powered by GroupM and will initially operate in the United States. Midas will be competing in the same arena with Active International, Omnicom�s ICON, Interpublic Group�s Orion and Aegis Group�s Carat.

Midas was formed at the request of clients who asked that WPP, in cooperation with GroupM, enter the corporate trading arena to complement current services, to deliver a media plan consistent with objectives, and be fully accountable for the total media product.

The new division will be headed by Kathy Kladopoulos, who has been named president. (Most recently Kladopoulos worked as EVP and managing director of Carat Trade, which she launched nine years ago.) Kladopoulos says that many WPP clients already engage in corporate trading with independent companies, but prefer that transactions be implemented by the same media agency network that handles their traditional media responsibilities.

Midas will purchase under-performing assets from a client at up to full book value for trade credits or sometimes cash. These assets could include discontinued product lines, excess inventory, real estate, capital equipment, transportation vehicles and any other assets that the client cannot liquidate at book value. The client will then use the trade credits as a partial payment substitution to purchase media or other goods and services.

�We plan to work directly with WPP through GroupM Entertainment to produce and/or license programming to television networks in exchange for inventory access to be used by The Midas Exchange,� Kladopoulos said. �This will provide much greater access to key inventory on the most desirable TV networks, which generally are less inclined to participate in corporate trade deals.�

While the new company will work for GroupM agency clients, it will remain an autonomous operation totally separate from the agencies and their buying teams. The execution of media activity using trade credits will be managed directly by personnel at Midas, not through the GroupM/agency trading groups who place traditional paid media.

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