WPP launches new corporate trading unit
WPP launches new corporate trading unit
Operating company will be called The Midas Exchange
NEW YORK — 23 April, 2010 – WPP [NASDAQ: WPPGY] today announced the formation of a new corporate trading division to help clients secure media credits in exchange for underperforming assets.
The new company, named The Midas Exchange, will be powered by GroupM, the world’s leading media investment management company and will initially operate in the United States.
The Midas Exchange was formed at the request of clients who asked that WPP, in cooperation with GroupM, enter the corporate trading arena to complement current services, seamlessly deliver a media plan consistent with objectives and be fully accountable for the total media product.
The new division will be headed by Kathy Kladopoulos, who has been named president of The Midas Exchange. Most recently Kladopoulos worked as EVP and managing director of Carat Trade, which she launched nine years ago.
Kladopoulos pointed out that many WPP clients already engage in corporate trading with independent companies, but prefer that transactions be implemented by the same media agency network that handles their traditional media responsibilities.
“Independent trade companies working outside a network don’t always work toward the common goal, which is to deliver an optimal media product and use corporate trade where it is most advantageous to the client,” Kladopoulos said. “The key to the process is to maintain the integrity of the media plan consistent with set objectives and use corporate trade where it can add value and efficiency. The integration of this service with the strategic media plan is critical to achieve success.”
The Midas Exchange will purchase under-performing assets from a client at up to full book value for “trade credits” or sometimes cash. These assets could include discontinued product lines, excess inventory, real estate, capital equipment, transportation vehicles and any other assets that the client cannot liquidate at book value. The client will then use the “trade credits” as a partial payment substitution to purchase media or other goods and services.
Also, because of its relationship with WPP, powered by GroupM, The Midas Exchange is in a unique position that will allow it to trade original television programming for advertising inventory, a significant difference from traditional corporate trading operations.
“We plan to work directly with WPP through GroupM Entertainment to produce and/or license TV programming to television networks in exchange for inventory access to be used by The Midas Exchange,” Kladopoulos said. “This will provide much greater access to key inventory on the most desirable TV networks, which generally are less inclined to participate in corporate trade deals.
Kladopoulos also pointed out that while the new company will work for GroupM agency clients, it will remain an autonomous operation totally separate from the agencies and their buying teams. The execution of media activity funded by media credits will be managed directly by implementation personnel at The Midas Exchange and not through the traditional GroupM/agency trading groups who place traditional paid media.
WPP is the world’s largest communications services group. Through its operating companies, the Group provides a comprehensive range of advertising and marketing services including advertising; media investment management; consumer insight; public relations and public affairs; branding and identity; healthcare communications; direct, digital, promotion and relationship marketing and specialist communications. The company employs over 138,000 people (including associates) in 2,400 offices in 107 countries. For more information, visit www.wpp.com
GroupM is the leading global media investment management operation. It serves as the parent company to WPP media agencies including Maxus, MEC, MediaCom, and Mindshare. Our primary purpose is to maximize the performance of WPP’s media communications agencies on behalf of our clients, our shareholders and our people by operating as a parent and collaborator in performance-enhancing activities such as trading, content creation, sports, digital, finance, proprietary tool development and other business-critical capabilities. The agencies that comprise GroupM are all global operations in their own right with leading market positions. The focus of GroupM is the intelligent application of physical and intellectual scale to benefit trading, innovation, and new communication services, to bring competitive advantage to our clients and our companies.