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Agenda. Overview. The ORION Advantage. Case Studies. The ORION Advantage. Case Studies. Overview. Clients. The ORION Advantage. Case Studies. Overview. ORION Trading Introduction.

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agenda
Agenda

Overview

The ORIONAdvantage

Case Studies

clients

The ORIONAdvantage

Case Studies

Overview

Clients
orion trading introduction

The ORIONAdvantage

Case Studies

Overview

ORION Trading Introduction
  • ORION Trading is a member of the constellation of companies within Mediabrands and is wholly owned by the Interpublic Group of Companies
    • ORION Trading is a media company that offers barter as a client service
      • Established in 1996 as the first global major agency-owned barter agency
      • Seamless agency integration
      • Sarbanes Oxley compliant
    • Interpublic and its operating companies employ 43,000 people in approximately 130 countries worldwide — serving a total of more than 4,000 multinational, regional and local clients, representing many of the best-known corporations and brand names
        • “Our clients continue to execute multiple transactions and have come to see barter as a strategic initiative for their organizations”
  • Brian McMahon, CEO ORION Trading
orion trading introduction1

The ORIONAdvantage

Case Studies

Overview

ORION Trading Introduction
  • ORION Trading is a member of the constellation of companies within Mediabrands and is wholly owned by the Interpublic Group of Companies
    • ORION Trading is a media company that offers barter as a client service
      • Established in 1996 as the first global major agency-owned barter agency
      • Seamless agency integration
      • Sarbanes Oxley compliant
    • Interpublic and its operating companies employ 43,000 people in approximately 130 countries worldwide — serving a total of more than 4,000 multinational, regional and local clients, representing many of the best-known corporations and brand names
        • “Our clients continue to execute multiple transactions and have come to see barter as a strategic initiative for their organizations”
  • Brian McMahon, CEO ORION Trading
orion trading s global footprint

The ORIONAdvantage

Case Studies

Overview

ORIONTrading’s Global Footprint
  • We know your core creative ideas, brand strategies, and how you buy.

181 offices in 119 countries across the Globe

IPG Network

Orion

the orion advantage

The ORIONAdvantage

Case Studies

Overview

The ORION Advantage
  • ORION Trading:
      • Purchases underperforming/impaired assets at full value in exchange for trade credit on future advertising
      • Clients use this credit to offset up to 20% of cash for media as planned & priced by their advertising agency
  • Benefits of working with ORION Trading:
      • Loss avoidanceon the disposition of assets
      • Increase cash flowas trade credits fund up to 20% of pre-budgeted advertising expenses
      • Preserve advertising budgets and marketing strategies
      • Media execution is based on client’s strategy and will meet or exceed expectations
      • Close collaboration with the client’s advertising agency
the barter process

The ORIONAdvantage

Case Studies

Overview

The Barter Process

Step 1

  • Evaluation
    • Review client’s media plan (pricing, budgets, dayparts, demographics, etc.)
    • Coordinate with both the client’s media team and advertising agency to identify those portions of the media plan that we can effectively deliver to the client’s exact specifications including all added value elements

Step 2

  • Acquisition
    • Specific assets are evaluated - examples: aircraft, consumer goods, real estate, capital equipment, receivables, end of line products and securities
    • Approve resale procedures in accordance with client’s requirements
    • Draft and review the trade agreement

Step 3

  • Fulfillment
    • The client and their advertising agency will retain total control of the media plan and will continue to plan and cost all media
    • Approval for the buy is authorized by client before media is purchased
    • Buys are executed to the client’s exact specifications
    • Post analysis delivered
the barter process alt 1

The ORIONAdvantage

Case Studies

Overview

The Barter Process (alt 1)

Step 1

  • Evaluation
    • Advertising agency/department plan, price and set quality of media schedule and obtain approval and sign off from client
    • The plan is passed to ORION Trading BEFORE activity is confirmed with the media owner(s)

Step 2

  • Acquisition
    • Orion Trading advise client/agency as to anticipated level of barter credits that can be utilised on the plan
    • An inventory of appropriate size is identified by client and sent to ORION Trading along with any re-marketing restrictions and book value details
    • ORION Trading confirm inventory is appropriate and issue contract to client

Step 3

  • Fulfillment
    • Client return signed contract to ORION Trading
    • Inventory is received by ORION Trading
    • The media is then purchased by ORION Trading to the exact specifications set by the advertising agency/department
    • Trade credit utilisation report (balance sheet) is issued to the client each month until all credits are utilised
the barter process alt 2

The ORIONAdvantage

Case Studies

Overview

The Barter Process (alt 2)
  • Advertising agency/department plan, price and set quality of media schedule and obtain approval and sign off from client

Step 1

Step 2

  • The plan is passed to ORION Trading BEFORE activity is confirmed with the media owner(s)

Step 3

  • Orion Trading advise client/agency as to anticipated level of barter credits that can be utilised on the plan

Step 4

  • An inventory of appropriate size is identified by client and sent to ORION Trading along with any re-marketing restrictions and book value details

Step 5

  • ORION Trading confirm inventory is appropriate and issue contract to client

Step 6

  • Client return signed contract to ORION Trading

Step 7

  • Inventory is received by ORION Trading

Step 8

  • The media is then purchased by ORION Trading to the exact specifications set by the advertising agency/department

Step 9

  • Trade credit utilisation report (balance sheet) is issued to the client each month until all credits are utilised
the barter process alt 3

The ORIONAdvantage

Case Studies

Overview

The Barter Process (alt 3)
  • Advertising agency/department plan, price and set quality of media schedule and obtain approval and sign off from client

Step 1

Step 2

  • The plan is passed to ORION Trading BEFORE activity is confirmed with the media owner(s)

Step 3

  • Orion Trading advise client/agency as to anticipated level of barter credits that can be utilised on the plan

Step 4

  • An inventory of appropriate size is identified by client and sent to ORION Trading along with any re-marketing restrictions and book value details

Step 5

  • ORION Trading confirm inventory is appropriate and issue contract to client

Step 6

  • Client return signed contract to ORION Trading

Step 7

  • Inventory is received by ORION Trading

Step 8

  • The media is then purchased by ORION Trading to the exact specifications set by the advertising agency/department

Step 9

  • Trade credit utilisation report (balance sheet) is issued to the client each month until all credits are utilised
the mechanics of the barter process

The ORIONAdvantage

Case Studies

Overview

The Mechanics of the Barter Process

[Company Name]

AOR

With Barter

$1mm

$200k

($800k)

$5mm

$5mm

$1mm

$1mm TC

– 0 –

$5mm

$4mm

  • Plan –AOR
  • Price –AOR
  • Approve – Client/AOR
  • Post –ORION

Asset Revenue Loss

Media Budget:

Cash Outlay

$1mm TC

Media Vendor

ORION

  • Financing + Capital Assets = Leverage

$4mm cash for media

$200kcash from asset

R1:

R2:

$4.2mm

trade credits can be utilized across all media formats

The ORIONAdvantage

Case Studies

Overview

Trade Credits Can be Utilized Across all Media Formats

Television / Radio

Print / OOH

Interactive

International

barter example

The ORIONAdvantage

Case Studies

Overview

Barter Example
  • The ORION Way
  • The Liquidation Way

Inventory Sale

Inventory Sale

Book Value

Liquidation Price

Book Value

Liquidation Price

$300k

$1m

$700kloss on books

$1m

$1m creditsNO LOSS

Stock

Stock

MediaPurchased

Cash Outlay

Media Spendwith $1m credits

Cash Outlay

Media Spend

Media Purchased

$5m

$5m

$5mPlannedExpenditure

$1m

$4m

$5mPlannedExpenditure

$4m

Cash Benefit = $0

Cash flow savings = $1,000,000

barter example1

The ORIONAdvantage

Case Studies

Overview

Barter Example
  • The Liquidation Way
  • The ORION Way

Inventory Sale

Inventory Sale

Book Value

Liquidation Price

Book Value

Liquidation Price

$300k

$1m

$700k loss

$1m

$1m creditsNO LOSS

Cash Outlay

MediaPurchased

Media Purchased

Cash Outlay

Media Spend

Media Spend

$5m

$5m

$1m

$4m

$4m

Cash Benefit = $0

Cash flow savings = $1mm

selected category expertise in regulated industries

The ORIONAdvantage

Case Studies

Overview

Selected Category Expertise in Regulated Industries
  • ORION Trading has extensive experience in a variety of categories. We adhere to all restrictive guidelines; including, but not limited to day, time, programming constraints and ratings guidelines. Industry examples include:
        • Gaming & Entertainment
      • Entertainment Software Rating Board (ESRB) strict adherence
        • Packaged Goods
      • Strong reach, high efficiencies
        • Pharmaceuticals
      • Medical, regulatory, and legal compliance
        • Quick Serve Restaurants (QSR)
      • Highly targeted image/brand campaigns, seamless integration of co-op media budgets
        • Retail
      • Focused targeting with high frequency, targeted towards high-qualitative demographic

Spirits

  • Distilled Spirits Council of the United States (DISCUS) compliant, Legal Drinking Age (LDA) adherence to code of responsible practice

Theatrical

  • Placement restrictive to audience composition and program/area compatibility reach, high efficiencies

Travel

  • Content approval on 100% of schedule, highly targeted
fixing deals from other barter companies

The ORIONAdvantage

Case Studies

Overview

Fixing Deals from Other Barter Companies
  • ORION Trading has extensive experience replacing barter transactions. Below clients had competitors’ trade credits on their books which they could not utilize for a variety of reasons.

Previously with ICON

Previously with ACTIVE

Previously with Other

United States

International

domestic airline carrier saved 22 5 million

The ORIONAdvantage

Case Studies

Overview

Domestic Airline Carrier: Saved $22.5 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

multinational conglomerate saved 6 million

The ORIONAdvantage

Case Studies

Overview

Multinational Conglomerate: Saved $6 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

furniture manufacturer retailer saved 14 4 million

The ORIONAdvantage

Case Studies

Overview

Furniture Manufacturer & Retailer: Saved $14.4 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

premier spirits distributor saved 12 8 million

The ORIONAdvantage

Case Studies

Overview

Premier Spirits Distributor: Saved $12.8 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

domestic airline carrier saved 22 5 million1

The ORIONAdvantage

Case Studies

Overview

Domestic Airline Carrier: Saved $22.5 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

multinational cpg company saved 11 5 million

The ORIONAdvantage

Case Studies

Overview

Multinational CPG Company: Saved $11.5 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

leading regional apparel retailer saved 7 million

The ORIONAdvantage

Case Studies

Overview

Leading Regional Apparel Retailer: Saved $7 Million

Background

Media highlights

Media performance snapshots

*2009 inclusive through 1H

contact information
Contact Information
  • Thank you for the opportunity to share our program with you.
        • Should you have any additional questions please feel free to contact us.
    • Please visit us online:oriontradingworldwide.com
  • Brendon Walker
    • Vice President, Sales212.605.7039
    • brendan.walker@oriontradingww.com
  • Jason Clancy Group Director, New Business Development
    • 212.605.7009
    • jason.clancy @oriontradingww.com
common misconceptions

The ORIONAdvantage

Case Studies

Overview

Common Misconceptions

Quality of Media

  • We review the client’s media plan prior to entering into an agreement
  • We say “no” when we cannot deliver at the same level of quality
  • Contractual guidelines are agreed upon prior to the execution of the deal
  • We work closely with agencies to maintain a seamless transaction

Trade Media pricing is not the same as cash buying

  • We invoice for trade services at the exact rates agencies have negotiated on behalf of their clients
  • Client may request an audit

Trade Company Solvency

  • ORION Trading is 100% owned by IPG

Credits are worthless

  • We only conduct barter deals to scale and with a planned home for credits
  • We work with our client to ensure quick fulfillment of the credits
  • Clients receive quality media

Asset Mishandling

  • We avoid trading for “sensitive” assets
  • We enter into a contractual agreement on the remarketing restrictions
  • We often have the client pre-sell assets for us
  • We provide proof of receipt on the sale of the asset

Trade takes away agency revenue

  • Agency gets commission on full buy
  • Agency employees retain full control of the buy
client analysis and case study
[Client] Analysis and Case Study

Note: this slide’s content is UNLINKED

  • A partnership between 2004 through 2009e* with ORION Trading, would result in accumulated cash flow savings in excess of $340 million or approximately $57 million per annum.**
  • On average, nearly 50% of AB-InBev’s media spend can be applied to ORION’s most dominant media capabilities, identified as “tradeable media”.***
  • The above chart depicts AB-InBev’s total tradeable media spend since 2004. A partnership with ORION Trading over this illustrated example would have enabled AB-InBev to have part-funded this $1.7bn expenditure with over $340mm in trade credits—resulting in an accumulated cash outlay of $1.4bn.
  • Estimate for 2009 has been projected with a multiple of 2 applied to media expenditures based on 1H ‘09.** Analysis looks at all AB and InBev brands and businesses.
  • *** Tradeable Media consists of: Cable TV, Syndicated TV, Spot TV, Spanish Language Nat’l TV, Spanish Language Spot TV, Network Radio, Spot Radio, OOH, Internet
client analysis and case study1
[Client] Analysis and Case Study

Note: this slide’s content is LINKED

  • A partnership between 2004 through 2009e* with ORION Trading, would result in accumulated cash flow savings in excess of $340 million or approximately $57 million per annum.**
  • On average, nearly 50% of AB-InBev’s media spend can be applied to ORION’s most dominant media capabilities, identified as “tradeable media”.***
  • The above chart depicts AB-InBev’s total tradeable media spend since 2004. A partnership with ORION Trading over this illustrated example would have enabled AB-InBev to have part-funded this $1.7bn expenditure with over $340mm in trade credits—resulting in an accumulated cash outlay of $1.4bn.

Data Summary

  • Estimate for 2009 has been projected with a multiple of 2 applied to media expenditures based on 1H ‘09.** Analysis looks at all AB and InBev brands and businesses.
  • *** Tradeable Media consists of: Cable TV, Syndicated TV, Spot TV, Spanish Language Nat’l TV, Spanish Language Spot TV, Network Radio, Spot Radio, OOH, Internet