Turner Broadcasting’s new barter plans are a radical idea, Alasdair Reid
Ready for a new concept in barter? Many people find the whole business
confusing as it is, but Turner Broadcasting is about to give it a new
Most TV barter deals involve an advertiser acquiring the rights to
television programming - usually the sorts of shows that it thinks will
suit its image. Unilever goes for things like Wheel of Fortune, while
PepsiCo likes the rock and lifestyle magazine programme, Passengers. The
advertiser then takes its programming to the TV channels and offers it,
not for cash, but in exchange for airtime and sponsorship credits.
Turner proposes to do things differently. It has set up an office in
London with the task of trading airtime on CNN and TNT/the Cartoon
Network in exchange for the advertiser’s product. It will consider
anything from tins of beans to computers. Taking advantage of its
international network, Turner will then attempt to market these products
in other countries or sell them to its 8,500 staff worldwide.
The idea is that, in today’s volatile world markets, companies sometimes
get their forecasts completely wrong and produce far too much of
whatever it is they make. Such mistakes threaten profits, and when
things look bad for companies the first thing they cut is their
marketing budgets. That, in turn, is not good news for media owners.
Turner reckons that this new type of barter kills two birds with one
It works in the US, apparently. But will it catch on here? Axel van
Drongelen, the international sales director of the unit - called the
Turner Reciprocal Advertising Corporation - says: ‘We are a global
company, with international television channels, so I think it’s most
likely we’ll be talking primarily to the headquarters of international
‘This is not going to be huge, but what we are able to do is offer
flexibility to advertisers when paying for their ads. Everyone we have
talked to so far has been intrigued by the offer and I think there will
be an interest here in the UK,’ van Drongelen continues.
The line many advertisers take is that it is an interesting concept, but
will never be appropriate because advertisers manage their production
and inventory levels too efficiently. Which is what you would expect
them to say. But maybe there’s a real market here. Perhaps other
broadcasters should look at the potential - not just hungry cable and
satellite channels, but the bigger players as well.
After all, even ITV companies are exploring what were once peripheral
areas. For example, when negotiating with Granada’s sales house, Laser,
a confectionery company might be asked to consider its business
relationship with Granada Service stations.
So, can UK broadcasters learn anything from this new Turner operation?
Jerry Hill, the managing director of TSMS, is sceptical: ‘It’s usually
in mature businesses that people have to look for new ways of making a
margin. Television is far from a mature business. Revenue keeps growing,
as does TV’s share of all display advertising. And you certainly
wouldn’t expect the brand leader, ITV, to be looking at this sort of
He adds: ‘But that doesn’t mean we don’t believe there are other ways of
doing business. In the past, we’ve done a bit of conventional barter -
though we are always wary of being hostages to fortune by losing control
of our inventory.
‘Would we barter airtime in exchange for having a fleet of brand new
Mercedes sitting in the car park? Why not? Though I suppose the
Independent Television Commission might have something to say about it.
How would the levy be calculated? And we would have to demonstrate that
we conduct transparent business transactions, which might be hard with
this type of barter,’ Hill says.