It isn’t that last year’s price hikes weren’t an accurate reflection of publishers’ internal cost pressures. For the most part, they were. But advertisers don’t want to pick up the full tab for magazines’ rising paper, postage and ink costs. And when magazines try to pass along too much of the increase, all they succeed in doing is making the negotiation process that much more antagonistic.
That, in turn, leaves price as the primary point of discussion during sales calls with agencies and marketers, further commoditizing the medium.
Conversely, when the price hikes are realistic and-in theory-easier for buyers to swallow, price negotiations become simply one part of the conversation, allowing the pitch to center on the overall product, as it should.
There’s another important lesson here. When the bottom fell out of the magazine ad market in late 1989, publishers turned to their second revenue stream-circulation-but many found that it had been reduced to a trickle. Through much of the ’80s, publishers artificially inflated their rate bases, allowing them to charge more for then-plentiful ad pages. After the last recession, they vowed to turn the focus back to the core reader and increase circulation’s contribution to the bottom line.
While some publishers have trimmed rate bases and taken other steps to reduce waste circulation, readers can still subscribe to some prominent monthlies for as little as $8.97 a year, less than a buck an issue. That reflects poorly on the editorial product and, indeed, the brand as a whole.
It’s time for publishers to show faith in their products by asking readers to pay a fair share. Which can only make advertisers more willing to pick up their own part of the tab.
There’s a lot riding on the Census Bureau’s plan to run $100 million in advertising to encourage everyone to return their census questionnaires in 2000. For each 1% of mail not returned, the bureau estimates, it costs about $25 million to track down those people.
Volunteer agencies and donated media have urged cooperation in the past, but now the bureau wants to pay its way to assure better time periods and demographic targeting.
So the bureau is ready to place a big bet that the effective use of paid advertising can get more people to stand up and be counted, saving taxpayers money in the long run. The pressure will be on the agencies that win this plum assignment as well; the impact of their creative work and media plans will be easily judged by looking at what percentage of recipients return the surveys. If the ads don’t work, the bureau is likely to return to pro bono commercials and door-to-door census takers.
For its part, the media can help by giving the bureau its best deals. Who knows, with full participation, the media may discover their markets are larger than they thought-a bonus for everyone.