KSL Launches eWorld: eBay Like System For Bartering Media Buys

Taking a page from online auction service eBay, one of Madison Avenue's largest independent media services agencies is launching a new online service that will allow marketers to swap unsold or excess consumer products and services in exchange for media. The new service, dubbed eWorld Asset Trading, will be officially unveiled this week by KSL Media, a New York-based media shop that buys media for marketers such as Bacardi USA, NBC Television, and Calloway Golf.

KSL already has quietly implemented such deals - known as "barter" buys that exchange a client's surplus product inventory for media buys - for several of its clients, including Calloway, Turtle Wax, and the Border's bookstore chain.

While barter media deals aren't new, they typically are handled by firms that focus on the front end of the process: the financial arrangements associated with liquidating surplus or remnant products, which are then converted into media credits that barter media firms used to procure advertising inventory from media outlets. Some of the biggest players in the field include independent Active International, and Omnicom's Icon International unit.

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eWorld's focus, says KSL CEO and Founder Kal Leibowitz, says that's like the tail wagging the dog, and that eWorld puts the media plan at the front end of the process and then figures out how to utilize a client's product inventory to help fund the buys. Leibowitz says while KSL has always handled some barter buys, the company decided to spin it off into a separate online-based asset trading service, because of increased demand from clients sitting on unsold inventory.

"Yes, the recession has something to do with it," he says, adding, however, that KSL also sees it as an opportunity to attract new clients who might utilize the firm for conventional media service once they have been exposed to it via barter deals.

In most cases, barter accounts for only a small percentage of the actual funding of barter-based media buys, and clients must put cash up to fund the majority of the buys. They key says, Leibowitz, is looking at the barter component as an alternative means of funding a portion of a conventional media plan, and not to put the product liquidation component at the front end of the process.

One thing that separate's eWorld from eBay's eBay for Media system, says Leibowitz, is that it is not an auction-based system. Marketers can post their unsold inventory online, but it is the eWorld team that assesses its "fair market value," and determines upfront what portion of a conventional media plan it can be used to fund.

"It is a transactional Web site, but it's not a bidding process," he explains.

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