A client wishes to value stock worth €500K. TEC and the media agency isolate €500K of media space purchases (TV, radio, press, internet, posters, cinema) which can be handled by TEC in year N and subsequent years.
TEC and the media agency negotiate with the advertising networks, which accept the €500K by way of barter in year N and subsequent years.
The advertising networks provide the advertising space and then bill.
The advertiser pays its agency media either by deducting the agreed media credits (barter) or by payment in full (100% cash option), depending on the agreement.
The advertiser pays all or part of the media plan to its agency, including TEC's share.
The media agency pays TEC for €500K by deducting the media credits (barter) or by payment in full, depending on the contractual choice made by the advertiser.
The agency pays TEC for all or part.
If the advertiser has chosen the 100% cash option, then, after the funds have been received, TEC pays the advertiser for the stock in cash, as and when it buys the media.
TEC makes an initial down payment of up to €200K in cash for the stock or debits the media credits (barter).
This contract shall continue for a period of between 2 and 3 years.