Reed’s interactive group study finds market supports higher prices

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One of the first things Reed Business Information did when it formed its interactive group last year was to start a major pricing initiative across all its online products, including e-newsletters, said Jeff DeBalko, chief Internet officer at the company and president of the Reed Television Group.

The group considered all the factors that drove online prices—including the pricing of print products, position in the marketplace, what prices had been and what competitors were charging—and created a methodology that it applied across the portfolio for its 2007 rate card.

"It led, at the end of the day, to what we felt was a significant increase in pricing across the portfolio," DeBalko said.

Newsletter pricing was based on that same formula, although with different characteristics because it's possible to identify how many people are actually opening a newsletter, he said.

Thus far, the increases have been right on target, DeBalko said. "That means we were pretty underpriced in the aggregate, and the methodology we established was pretty solid."

Advertisers haven't resisted the changes because newsletters are very targeted and accomplish a specific thing, he said. "They're willing to pay that for that targeting."

At the end of the day, however, it's performance that matters, DeBalko said. "And that's why we put so much emphasis—and we're investing so much—on our optimization programs. We can drive pricing if we drive performance. If we can't drive performance, it's going to be very difficult to continue to drive pricing."

Jeffrey Reinhardt, managing director at Berkery, Noyes & Co., said many publishers' e-newsletter ad rates should be higher. "Newsletters deliver tremendous value for the advertiser at what is still, for the most part, an extremely economical price point," he said. "The ability to target, access and influence a finite, difficult-to-reach community should come with a premium."

—Mary E. Morrison

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