List Exchange Value Proposition—Would It Be Better With Barter?

June 23, 2010 By Chris DeMartine

multipage

For list owners, it is important to recognize the value of exchanges when reporting budgeted versus actual net list rental income. It may not be realistic to calculate the actual value of every exchange order, especially when multiple selections are involved. However, there are best practices for list owners to recognize exchange value in a consistent manner.

I'd recommend an approach based on opportunity cost. Ask yourself the question, "How much would I have made in list rental income if I had not offered these names on exchange?" The easiest way to answer that question is to take the average list rental cost per thousand for the period and apply that to the exchange volume. After all, you could always reciprocate a list rental with your income. Other methods may work better for your business, but it's wise to speak with your controller regarding potential tax implications of these arrangements, and other forms of revenue recognition versus expense.

Chris DeMartine is director of business development at NextMark, a Hanover, N.H. firm that provides tools and resources that support the use of mailing lists for direct marketing efforts. He can be reached at (603) 643-1307 x114, or via e-mail at cdemartine@nextmark.com. Read more about social media, direct marketing and list marketing freeconomics on the NextMark blog.

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