DGR is Mamma Mia Company’s Barter Department for the complete management of barter-based advertising campaigns.
Barter advertising, also called bartering (from the English “barter”), is a method used by companies to purchase advertising without spending cash, instead using their own goods as payment.
This method is used in Italy by hundreds of companies, from small advertisers to large multinationals, across a wide variety of industries.
Since the 1980s, it was common for advertising concessionaires to accept goods as payment when cash investments weren’t possible, in order to seize every business opportunity. However, when it came to monetizing the goods, concessionaires were often unprepared to find proper sales channels and to handle numerous aspects unfamiliar to the advertising world (logistics, transport, product expiration, distribution restrictions).
As a result, final revenues often didn’t even cover operation costs, causing major write-downs in concessionaires’ balance sheets.
This is why “Barters” were created, companies with the same business model as DGR, that relieve concessionaires of this burden by purchasing goods from advertisers and providing the agreed advertising campaigns in return.
There are no official figures, but over the decades it is estimated that the bartering market in Italy is worth more than €500 million, divided between a few established players and a multitude of small improvised businesses.
The advertiser proposes to Mamma Mia Company the goods they wish to use for barter, along with the desired advertising plan brief.
The Company’s Barter Department verifies the value of the goods and, in collaboration with its long-standing network of advertising concessionaires, presents the client with the agreed plan. If the commercial and qualitative parameters of the goods and advertising meet expectations, the operation is formalized.
The advertiser sells the goods to the Company, which in turn purchases the advertising and re-invoices it to the advertiser, offsetting the goods received.
More sales, new channels, faster inventory turnover, fewer write-downs, and reduced logistics costs.
Greater and better planning across all media, access to web planning through Advantage, Mamma Mia Company’s proprietary programmatic buying platform.
A barter sale is a full-fledged sale, whose revenue benefits the fiscal year in which it is made. If the company decides to use the advertising equivalent in the following year, revenue is recorded in one year and the cost in the next.
The immediate offsetting of invoices is valid only for VAT purposes, while the advertising cost is properly allocated to the period when it is actually delivered.
The most evident benefit is the elimination of cash outflows for advertising purchases. Risks related to unpaid or delayed payments by buyers who normally purchase goods with cash are also eliminated.
The offsetting of active invoices (sale of goods) with passive invoices (purchase of advertising) is regulated by law. It requires invoices to be issued on the same date and for the same amount.
To ensure maximum transparency, Mamma Mia Company is the first company in Europe to have every barter operation certified by a leading auditing firm.This certification guarantees Fair Value and compliance with Best Practices in all administrative, legal, and tax aspects, as well as adherence to contractual sales restrictions with the advertiser.
