NONE: RE: ONLINE ADS>> Ad-Bytes - Barter Advertising
RE: ONLINE ADS>> Ad-Bytes - Barter Advertising
Tradebank of Eastern Alabama (mansion_at_webex.com)
Wed, 26 Mar 1997 21:33:20 -0500
>In response to:
>>> Trading links: Barter makes a mark on Web
>>> IAB to report how much ad spending is cash vs. non-cash
>>> http://adage.com/interactive/articles/19970324/article1.html
>
>At 03:11 PM 3/23/97 -0500, Michael S. DeVries wrote:
>>Some of the comments in these articles show that some of media providers
>>understand the benefits of barter :), while others just don't get it * * *
>>
>>I really don't see what the issue is and why its "[more] than the industry
>>wants to admit"?
At 9:21 PM 3/23/97, Mark Welch wrote:
>I think the issue is that a huge amount of the "paid advertising" that
>we see reported and tracked by various agencies and consulting firms
>are actually not paid advertisements at all. Indeed, I strongly believe
>that a lot of "paid advertising" reported in the annual reports of
>companies like Netscape, Lycos, and Microsoft are actually not
>traditional paid advertisements -- instead, they are ads "sold" on
>the (wink, wink) basis of trading purchase orders for identical
>amounts to make it appear that there are "real" transactions going
>on. That way, you can show your company going from $2 million
>in sales to $22 million in sales, with $20 million being banner ad
>sales. (Of course, there is value there -- traffic building, brand
>awareness, maybe even real sales generated from the ads.)
Again, I really don't see a problem with this. IMHO there not necessarily
the best trades, but if they can utilize their vacant ad space, inventory,
and get equal value for it, then it sure beats losing the revenue for
vacancies. Further, they still have to report it as revenue in all respects
including the IRS. So how is this really different then if they each paid
each other cash for the ads? The main difference is it doesn't "cost" them
as much to trade. But they still get all the benefits (traffic building,
brand awareness, maybe even real sales)as if they had paid cash, so ...
Sounds like a win-win to me!
Also trading ad time/space is very common in the media biz. Typically
however a media client will trade ads for other goods and services such as
trips for give-aways, promotional items, printing, etc. for which they would
otherwise spend cash so it makes these better trades for them.
>I also agree that barter advertising is valuable and should be
>counted, but I also believe that advertisers who actually pay
>should understand the difference between paid and barter
>advertising. For example, if I trade ads on my site with ads
>on another site, and we fix a "value" of eight cents per
>adview, that certainly should not be viewed by an advertiser
>as a reasonable way of fixing the "true" value of advertising.
<snip>
You should be trading your ads at the same "value" or retail price that you
would charge in cash. Therefore, why would this not be the "true" value of
the advertising? The only real difference between a barter transaction and
a cash transaction is that goods or services are exchanges instead of cash.
>Regarding the tax comment -- barter transactions are taxable,
>but in the case of exchanges of banner advertising, the value of
>ads received is directly offset against the "cost" of ads obtained
>through barter, which is a deductible advertising expense, so I
>don't perceive this as a significant tax issue unless the day
>comes when I can trade my accrued banner impressions for
>other products or services of value, which might not be
>proper business expenses (e.g. frequent flyer miles, game
>software, etc.).
That's were selling your banner ad inventory through a *reputable* trade
exchange can help. You can earn Trade Dollars (T$) through selling banner
ads and spend them on other products and services, for business or personal,
for which you would otherwise spend cash.
Please let me know if you would like more information on how this works :)
- Michael S. DeVries
*****T$*****T$ Tradebank of Eastern Alabama *****T$*****T$
*****T$*****T$ FREE BARTER ANALYSIS *****T$*****T$
*****T$*****T$ http://www.cris.com/~Devries/analysis.html *****T$*****T$
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