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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