Setting the Record Straight on Principal-Based Buying (formerly called Barter or Corporate Trade – YES, IT’S ALL THE SAME). ~via Gordon Zellner, Founder/CEO of Evergreen Trading.

➡️ Originally posted at… https://lnkd.in/eE9JUNYC ⬅️

So called, principal-based buying (PBB) is the Holding Company’s not-so-new shiny penny and has become one of the most discussed—and misrepresented—concepts in media today. I am speaking out because it’s more than principal, it’s the principle!

This past week at the ANAAFM Conference, I had the opportunity to clarify the conversation and raise awareness around what principal-based buying truly has been, and still is today. It has been around for 30+ years.

Evergreen partnered with the ANA on live polling at the conference that confirmed confusion is widespread. And why? Because some of the large Holding Companies are selling a false narrative to their clients about PBB (Principal-Based Buying). They offer PBB services, but they don’t actually act as principals. To be a financial principal, you have to use your own money and take financial risk. For that increased risk, you get increased reward (Finance101, Risk/Reward). Using your client’s money to make volume commitments with no penalty for shortfalls is not a principal risk model. It the exact same model agencies have always used. It sounds more like Principal Based INVOICING, not buying.

For over 30 years, I’ve built businesses, partnerships, and client trust on a real principal-risk model that’s grounded in arms-length, 3rd party objectivity and auditable value verification.  So, when PBB is misrepresented by large companies with big megaphones, the “broad brush” doesn’t just distort the business model… it puts decades of hard-earned trust at risk.

PBB—born out of Barter and Corporate Trade—requires three non-negotiables:
✔ Our own real capital risk… (not relying on client dollars)
✔ Independent media planning… so the media plan is not prepared for agency margin purposes (separation of Church and State)
✔ 3rd Party Objectivity… transparency and audit rights (apparently you cannot audit your AOR’s PBB buys)

At Evergreen Trading we’ve spent close to two decades proving how powerful this business tool can be, when done right. I’m grateful to the ANA for engaging in this conversation and a white paper of survey insights will be released soon.

Until then, I’m offering complimentary consultations for any brand or partner who wants to understand the gold standard for Principal-Based Buying… reach out at Gordon Zellner [email protected].