13 Ways To Reduce Advertising Costs
(1) Form your own In-House Advertising Agency and save 15%
on advertising placements, plus an additional 2% (cash discount)
on net cost if you make payment within 10 days from invoice date.
Don't be misled by the publication's advertising rate card that
indicates the agency commission (your discount) is available to
"Recognized Advertising Agencies" only. Publications cannot
discriminate against your agency because it serves just one
"client." To avoid any problems which may occur, you should
maintain a professional Ad Agency appearance with a separate Ad
Agency checking account, imprinted letterheads and envelopes, and
acceptable insertion order forms.
(2) Advertise in the lower-priced "Mail Order" or "Shopper"
sections of publications, whenever available. Mail Order Display
ads are grouped together in a section, usually in the back of
the book. Advertising rates are lower in the back, and smaller
ads usually pull much better in these sections than randomly
placed elsewhere in the publication. Readers who buy merchandise
by mail specifically seek out these sections for interesting
shopping values.
(3) Inquire about special "Mail Order" rates or "Direct
response Advertiser Discounts." Many publications that do not
offer "Shopper" sections do allow Mail Order Advertisers
reductions of 10% to 25% off the regular rates. These rates may
be expressed in absolute terms, or as a percentage discount from
the regular rates. (For example, a Mail Order Advertiser in
SPORTS AFIELD would first calculate the ad cost using the regular
rate card, then deduct a flat 25% "Mail Order" discount.) It is
important to note that you will not always find these lower rates
disclosed on the publication advertising rate card. In such
cases, be sure to ask. If you quote the regular rate on your
advertising insertion order, that is what you will most likely
pay.
(4) If you sell your own published material directly from
space ads, ask the publication if it will grant you the (little-known)
"20% Publisher's Discount" from the listed rate. You will very rarely
find this discount noted on the advertising rate cards.
Magazines that do offer this discount usually allow it to
publishers placing ads of 1/6 page and better. Couple the
"Publisher's Discount" with your 15/2% In-House Ad Agency
"commission," and you save more than 33% from the gross rate.
For a Mail Order book-seller running a full-page ad in a magazine
carrying a listed rate of $5,000, that's a savings in advertising
costs of $1,668.
NOTE: Keep in mind that your In-House Ad Agency commission
is allowable after taking advantage of all the lower rates and
discounts mentioned in these pages. We illustrate this "double
benefit" only one time in #4 above to avoid repetition of this
point.
(5) If you run small Display ads, consider placing
Classified Display ads. You can have your Display ad set in the
Classified section of the magazine. Space rates are usually much
lower there, even taking into account the often narrower columns
in these sections.
For example, a 1" x 1.75" Classified Display ad in a major
magazine currently costs approximately $330. This compares quite
favorably to the regular 1" x 2.25" rate of $860, and even to the
"Shopper" section (1" x 2.25") rate of $510. Also, your
Classified Display ad will stand out sharply in the regular-
worded classified advertisements. Most publications that sell
Classified advertising by the "word" also sell Classified Display
advertising by the agate line.
NOTE: There is another valuable benefit to Classified
Display advertising. Many popular publications do not allow
regular space advertising of less than 1/6 page. Yet you can run
a Display ad in the Classified section, buying space as small as
one column inch. This gives you the opportunity to test Display
advertising without the need to invest in 1/6 pages of space.
(6) Take advantage of frequency discounts where your ad
pulls well, or just breaks even at the regular rates. These
discounts commonly run from 2% to 12%. To earn such discounts,
you usually have to run a certain number of consecutive inserts,
or a certain number of inserts within a 12-month period. You'll
find the "specifics" on each publication's advertising rate card.
Here is how the discount may be applied:
(a) When you place the "qualifing insert," you pay the
lower rate and also receive credits for the rate differential on
previous inserts.
(b) Some publications allow or require you to first sign a
contract, committing you to the necessary number of inserts for earning
the frequency discount. You pay the lower rate immediately. But if you
should somehow interrupt the insert schedule, you have to reimburse the
publication for the (frequency discount) rate differential deducted on
previous inserts.
Here's an example of how you might benefit from the frequency
discount: Publication X offers a 10% discount on all inserts if
you place 4 inserts within a 12-month period. During the first
9 months of the year, you have run your 2-inch display ad in this
publication three times, at the regular rate of $200 per insert.
Results have ranged from break-even to a small profit. However,
by placing the 4th insert within the next three months, you are
almost assured a good percentage return on your out-of-pocket
cost, which now drops to $120 for this placement. ($200 less 10%
discount--$20--this insert, less $60 in credits earned on the
previous three ads.)
(7) Take advantage of ad-size discounts when feasible. Most
magazines reduce the per line rate with each increased standard
unit of space. These are 1/6 page (half column), 1/3 page
(column), 1/2 page, 2/3 page and full-page. If your ad is doing
very well in 1/6 or 1/3 page of space, it may be worthwhile to
test increases in space while incurring significantly lower
percentage increases in cost. In one magazine, for example,
increasing space from 1/3 page to 2/3 (100%) increases your
advertising cost by 60%.
In certain situations, you can also benefit from ad-size
rate discounts with smaller ads. For example, if you're running a
4-inch ad, it will most likely pay for you to add another inch of
space and qualify for the 1/6 page rate. In one publication, the
one inch rate is currently $147, so a 4-inch ad costs you $588.
The 1/6 page rate is $695. The extra inch of space costs you $107.
(8) Take advantage of summer or off-season rate discounts
offered by many major publications. Such discounts may range from
10% to 25%. These are granted by publications as an incentive to
stimulate advertising space sales, usually during the slower
summer months. You will not find this discount listed on the rate
card because a publication's policy in this area may change from
year to year based on space sale projections. If you are on a
publication's mailing list as a recent advertiser, you may be
notified of the discount by mail a few weeks before the final
closing date.
In most cases, however, you will probably have to make your
own inquiries. And you will find different kinds of "deals."
This past year, one publication offered advertisers a 20% rate
discount if they placed an ad of one column inch or better in
both the July and August issues. Another offered advertisers a
10% rebate on May and June inserts if they scheduled the July
issue as well.
NOTE: There is usually a double benefit to summer
advertising sales. The first, of course, is the advertising cost
savings. The second is less competition in the pages. Most Mail
Order advertisers still cut back their promotional budgets during
the summer months, while gearing up for the Christmas selling
season ahead. But readership for most publications have been
growing stronger during this period, as average vacation/travel
time per consumer continues to diminish in this economy.
(9) If you are a new advertiser to a publication, ask if it
will grant you a one-time test rate to minimize your risk. A test
rate may cost you from 20% to 30% less than the publication's
lowest listed rate. Since decisions are made on an advertiser to
advertiser basis, publications that do allow test rates usually
don't publicize it. Advertisers who are potentially big
promotional spenders obviously stand a better chance of being
given a test rate. And if you are represented by an Advertising
Agency that gives a publication a large client business, it
certainly helps the situation.
NOTE: Being a large advertiser in a publication similar to
one that you're asking for a test rate may actually work against
you.
Assume you have run a few successful full-page ads in
Popular Handyman. You now approach Handyman Illustrated, and as a
new advertiser to this publication, you ask for a special first
time test rate. You might be denied on the basis that you will
most likely test this publication with or without being granted
a test rate.
(10) Be on the lookout for remnant space opportunities.
Remnant space consists of one to three pages of unsold
advertising space in a publication at press time (national or
regional editions). Rather than plugging in non-income producing
editiorals or public service announcements, the publication may
make last minute attractive offers to unscheduled advertisers by
selling them the open space at large discounts, 40% to 60% off
the regular rates.
To be informed of remnant space when available, write to the
publications you would be willing to try at lower rates and to
those you intermittently schedule. Let them know that you could
be interested in purchasing remnant space and ask if they will
place you on their "contact list." You might also hook up with
an Advertising Agency specializing in such purchases. Quite
often, Ad Agencies are contacted first when this space becomes
available.
Finally, be aware that remnant space buyers are not usually
granted regular billing terms. In fact, because of the large
discount involved and to "firm up" the telephone transaction,
many publications require the large remnant space buyers to wire
transfer the funds within hours of accepting the deal.
(11) Take advantage of group rates whenever feasible. The
advantage to group space or word buying is that you place one
order (one payment and ad copy) with either a publisher or
publisher's rep. The same ad appears simultaneously in at least
two (or perhaps 100) publications at a lower rate per issue than
if you advertised separately in each. Groups comprise the
following:
(a) Two or more publications reaching audiences of
similar interests.
(b) Two or more publications reaching audiences of
different interests (usually a better buy and often offered by
a publisher owning many different types of magazines).
(c) A combination of (a) and (b). Group buying may
save you from 10% to 50%.
(12) Establish co-op advertising programs with other Mail
Order advertisers. There are many alternatives here, the two most
common are:
(a) You purchase a large amount of space and take advantage
of an ad-size discount. You sub-contract smaller portions of that space
to other advertisers at a higher line rate than you paid, but at a lower
per line rate than each advertiser would pay if he purchased that small
unit of space directly from the publication.
(b) You and one or more advertisers equally share a large
amount of space and split the costs accordingly. Example: You reserve
a full-page of space in a publication at the full-page rate of $2,900.
You and two other advertisers of related products each run a separately
bordered and couponed 1/3-page ad in that space under a common headline.
You each pay $966.67 toward the cost of the page. If any of you scheduled
your own 1/3-page ad in SO, it would have cost $1,450. You each save
$483.33.
(13) If and when you are able to commit to large amounts of
space in any publication in the future, you might be able to
"break the rate card." This means negotiating a separate
contractual arrangement with the publication which allows you to
purchase fixed amounts of advertising space for long periods of
time at rates even below the full-page 12X rate. (Also referred
to as "dealing off the rate card." Although running large monthly
ads in the same publication results in diminishing returns, some
advertisers receive such large discounts through such
arrangements to make it realy worthwhile.
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This resource is (c) 1996 by, and compliments of
The Smart Business Supersite (tm)
It originally appeared in the Copley Mail Order Advisor.
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