But when you strip away the obfuscation surrounding rate cards, the bottom line is this: Advertisers are paying slightly more for magazine pages this year, and there are signs the buyers' market is shifting a bit toward sellers.
The survey of major buyers shows advertisers are getting an average volume discount of 32.1% off rate card across 32 magazine categories, up from 31.5% for those categories a year ago. The number of pages needed to qualify for that discount dropped to 4.3 from 5.9, suggesting it's easier to get a deal.
Ad Age has conducted the survey four times in six years, and discounts have risen each time. But the new survey shows the smallest increase in discounts to date. Buyers and sellers cite two reasons: Annual rate-card increases have slowed in the economic downturn, leaving less room to maneuver. And more importantly, buyers say the market might have hit bottom.
"Recovery in print is getting a little traction," says George Sansoucy, senior VP and co-managing director of the print division at Interpublic Group of Cos.' Initiative Media, New York. "We're starting to see a little resistance from the sellers. The balance of power is starting to tilt slightly and slowly."
"We are at rock bottom," adds Robin Steinberg, VP-Pfizer print services at Aegis Group's Carat North America, New York. "The magazine discount is so heavy now it can't get any deeper."
some requests rebuffed
Publishers appear more willing to turn away business. "We have steered clear of unrealistic requests from buyers for steep discounts," says Ed Kelly, president-CEO of American Express Publishing Corp., whose titles include Travel & Leisure and Food & Wine. "We'd rather walk [away] from business than risk the long-term effect of rate-card erosion."
Hachette Filipacchi Media U.S., seen by buyers as one of the bigger discounters, also has rejected some low-price deals, says Nick Matarazzo, senior VP-director of corporate sales. "It's sixth grade math," he says. "It either fits into your financial parameters or it doesn't."
In the Ad Age survey, volume discounts rose in 17 of 32 categories and fell in 13. Women's fashion/beauty was unchanged from last year; Hispanic is a new category for the survey. Discounts ranged from 16% in gay magazines to 56.5% in women's service.
Among the 10 categories with the smallest discounts, the discount level rose in just two. Magazines on this end of the chart tend to be focused, special-interest titles where buyers pay to reach a targeted audience.
"The stronger the relationship with the reader, the lower the discount," says Tom Busse, senior VP at Rodale, publisher of such outdoor and specialty-interest magazines as Backpacker and Runner's World.
Meanwhile, discounts increased in nine of the top 10 most-discounted categories. Women's service, always the top discounter, saw its average discount jump to 56.5% based on a commitment of 4.8 pages.
Buyers say average volume discounts increased to 49% from 33.1% a year ago in the hard-hit computer/consumer tech category. Tim Castelli, VP-publisher of category leader PC Magazine, says his average discount is "significantly less," adding the 49% also isn't representative of discounting for the magazine's parent, Ziff Davis Media.
Jeff Hamill, Hearst Magazines' senior VP-advertising and sales, notes discounts vary greatly among his company's 16 titles, with women's service magazines-Good Housekeeping and Redbook-offering volume percentage discounts in the mid-40s to low 50s while Hearst's upscale women's entry, O, the Oprah Magazine, "does not budge off the rate card."
Even within a category, rate-card comparisons in the magazine industry aren't simple because other programs may alter the effective price per page.
rate card a relic
"There is no such thing as a rate card anymore," says Kent Brownridge, general manager of Wenner Media, publisher of Rolling Stone, Us Weekly and Men's Journal. "It's a relic, and it ought to be shipped to the Smithsonian Institution." A discount is "a bogus percentage off something that doesn't exist. The only rate that matters is what the client paid last year."
Volume discounts become moot in an era when large advertisers demand a low rate simply for "the promise that they might run," he adds. Every Wenner advertiser has a rate, and "that's the real rate card," says Mr. Brownridge.
At Reader's Digest Association, Reader's Digest gets more than 75% of its advertising from clients with an existing rate structure, says VP-Publisher Eric Gruseke. "For existing advertisers, rate cards are pretty irrelevant," he says.
Carat's Ms. Steinberg says rate cards have value as a starting point for discussion. "Everyone goes off rate card-and if they don't, they create one for you," she says.
How much of a rate-card increase sticks? The consensus: Rate cards this year increased an average 5% to 6%, and buyers on average will end up paying 1% to 2% more than 2002.
Cyndi April, U.S. director of the print group at Omnicom Group's OMD USA, says the small actual increase this year follows a flat or slight reduction in prices in 2002.
"The print business is probably tracking to what the economy is," she says. "It's cautiously moving forward. It's fragile."