Published on .

Most Popular

Just last week we approved of an American Association of Advertising Agencies plan to offer membership to all agencies in specialty disciplines. It was sound, logical and necessary. Many specialty shops, owned by ad agency-based parent companies, already were Four A's members. Why, then, exclude others?

Now it's the Association of National Advertisers rolling out the welcome mat to new members-surprisingly, to ad agencies, a big step beyond its normal constituency. Ordinarily, readers will not find a discouraging word here when advertisers propose action to build closer working ties to ad agencies. This plan, however, strikes a wrong note.

Advertisers and agencies, as businesses, often have very different agendas. Consider compensation: For an agency, the goal is to be paid more; for advertisers, it's to pay less. Regarding major advertisers' use of outside consultants, particularly those that conduct account reviews, do agencies have the same points of view as those of ANA's current membership? We doubt it. Looking ahead, it seems certain that in some future ANA debate its new agency members will be asked to leave the room; and, as an advertiser trade association, that would be only right.

The one obvious benefit for the agencies invited to join ANA is the opportunity it provides to rub shoulders with advertisers and, possibly, gain new business. Unfortunately, many agencies will feel real pressure to join ANA for that reason alone.

If working together more closely with agencies is ANA's objective, the answer is for it and the Four A's-two independent, and independent thinking, industry organizations-to have joint meetings, not joint membership. With this new ANA membership strategy, "joint" could turn out to mean "wedge"-as between two fine, old, essential industry organizations.

Rate-card trap

Magazine rate cards are virtually useless, and the sooner publishers recognize that and shift to a more sophisticated negotiation model, the quicker they can get back to selling magazines based on qualitative as well as quantitative measures.

As Advertising Age reveals this week, many leading consumer magazines sell space for less than two-thirds published rates. Yet every year, they print up rate cards that no one reads, and tack on increases that buyers view as padding to be stripped away during negotiations. Then magazines grumble about being treated as commodities.

Unfortunately, some marketers and agencies do treat magazines as commodities. Editorially, the titles known collectively as the Seven Sisters have little in common these days; with one or two exceptions, each has carved its own niche. Yet space buyers still pit them directly against one another and base final decisions almost solely on price. That's not fair, but it is reality. And the same thing happens in the newsweekly and other fields.

The best way to combat that problem is not to rail against rate negotiation but to neutralize it. As our story this week notes, many buyers today track historical costs for a category rather than depending on rate cards as the basis for negotiations. Smart sellers focus on profits per page. And they're willing to walk away from money-losing business rather than accepting it to puff up page counts and create an illusion of prosperity.

Publishers who bury their heads in the sand when it comes to discussing the flexibility of magazine pricing do the industry a disservice. If they instead develop a sophisticated approach that allows marketers to get the best rate while preserving margins, they can spend less time haggling over price-and more time selling advertisers on such important attributes as editorial quality, circulation vitality and reader involvement.

In this article: