News Analysis: How MRI is making a fortune using an ancient trade system - Corporate barter is growing fast, but what exactly is it? Mark Tungate investigates

MRI International has just struck a pounds 6 million media deal with global watch and jewellery brand Titan. This came hot on the heels of a pounds 2 million agreement with JanSport.

MRI International has just struck a pounds 6 million media deal

with global watch and jewellery brand Titan. This came hot on the heels

of a pounds 2 million agreement with JanSport.



But MRI isn’t a traditional media agency. So just what exactly is

it?



And how does this ’corporate barter’ thing it keeps banging on about

actually work?



To the uninitiated, corporate barter sounds at worst archaic and at best

faintly exotic. Images spring to mind of robed men swapping goats’ milk

for firewood. In fact, it is one of media’s fastest-growing sectors, and

MRI is arguably its most successful exponent.



In simplistic terms, corporate barter involves exchanging excess stock

for media space. But maybe it’s best to let Simon Lee, CEO of MRI

International (Europe), explain the concept.



’We are essentially a problem-solving company,’ he says. ’Our clients

are people who have redundant stock, whether it’s cars, golf clubs,

empty hotel rooms or unsold aircraft seats. We take this stock and

exchange it for media space, effectively increasing our clients’ media

budgets.’



This extracts value from the redundant stock and saves the client

several trips to the rubbish tip. But isn’t it just media for old

rope?



’There’s never anything dodgy about the products,’ Lee stresses. ’They

may be last season’s line, or branded with a finished promotion. But

they still do the job.’



And from the media owners’ point of view, corporate barter often gives

them the first sniff at a new client. But the key to MRI’s success - and

probably to the future of corporate barter - is the creative

solution.



’For instance, Proton sold us some cars but stipulated that they could

not be resold, because it would have upset their distribution

network.



We traded them to GMTV, which used them in a competition. So the cars

didn’t get sold, GMTV got competition prizes, and Proton got good

PR.’



Corporate barter took off in the US during the recession, when companies

found themselves with unsold stock. MRI was one of the first companies

to transform those dusty crates into trading units.



Lee, who comes from a radio sales background, helped to set up the UK

office at the end of 1994. Last year, it had a turnover of pounds 40

million.



In 2000, this could be closer to pounds 200 million.



’The credibility that the business has gained is reflected by the

attitude of our clients,’ says Lee. ’Four years ago, they might have

sold us pounds 50,000 worth of stock, with the attitude that they were

taking a bit of a punt.



Now we’re regularly asked to trade stock worth well over pounds 1

million.’



The company has solid relationships with a number of media owners - TDI

among them. Even owners who were previously wary of the idea have come

round.



’One large publisher didn’t want to get involved in corporate barter,

but changed its mind when it saw that major clients were going

elsewhere,’ Lee says. You have been warned.



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