Arnold Starts Barter Business




Media Ace Gaffney Positions New Company as an Added Value
BOSTON–Arnold Communications has entered the barter business, naming Michael Suscavage president of a newly established company called Arnold Asset Management, agency executives said last week.
Suscavage reports to Arnold media director John Gaffney, who has repeatedly been overheard saying, “I hate barter.”
What changed his mind? The number of barter proposals clients asked him to review.
“The last thing clients want to do is show a loss on their books. We agree to purchase the inventory–whatever it is–and provide them with a media credit in return,” says Gaffney.
“We ensure they are satisfied with who the inventory is resold to, then shape a media plan consistent with their goals,” he added.
Arnold makes money on margins, according to Suscavage, who previously worked at a privately held barter company in New York called Global Marketing Resources that filed for bankruptcy last year.
Shortly after, Suscavage approached Gaffney about starting a new barter company. They had met through Volkswagen. According to Suscavage, GMR helped VW dispose of hundreds of unsold 1993 Fox models that were sitting in port in Houston. “VW couldn’t push these into their dealers; we arranged to sell them to some third-tier rental companies.”
In return, VW was given media credits which, according to Suscavage, helped secure the then-struggling automaker’s first-quarter spot TV buy. At the time, the account was handled by Berlin Cameron Wright in New York.
Gaffney admits that getting Arnold’s board of directors and executive committee to sign off on the barter company was a challenge. “Once I understood the mechanics, they could see the value it would add to our clients and then the sale [of the idea] got simple.”
A key issue for manufacturers in barter is maintaining the integrity of their brand when dumping closeout inventory. That’s where Suscavage’s knowledge and connections come into play. “We never take possession of the inventory. It is shipped from the manufacturer to the preapproved customer” with Arnold Asset Management acting as the middle man, he said.
Gaffney doesn’t see the company generating huge revenues. “This is a value-added for our clients. For us, media is the primary product of the transaction. Part of what we deliver, in return for inventory, is a media schedule worthy of the value of the brand.