But large-circulation papers increased significantly (chart) How rates rank by circulation (chart) FOUR A'S STUDY FINDS PAPERS' RATE GAP PERSISTS

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The gap between newspaper ad rates paid by national and local advertisers declined marginally since 1991, the last year the American Association of Advertising Agencies conducted its every-other-yearly Newspaper Rate Differentials Study.

However, the gap remains a large one with national advertisers paying an average of 74.6% more than local advertisers, compared to 74.9% in 1991.

Moreover, the Four A's notes there was a significant increase in the rate differential among the largest circulation newspapers, the ones national advertisers are most likely to buy.

For newspapers with circulations of more than 100,000, the differential between the two sets of rates rose 13.8%.

The Four A's concludes that the reason for the overall decrease in the differential for all newspapers is largely methodological.

The study is based on rates charged by 1,338 papers as of July 1, 1993, 278 more than the 1991 report. All of the additional papers in the survey have smaller circulations that tend to have a more moderate rate of differential.

In particular, the Four A's notes that papers with circulations under 25,000 decreased their differential by 15.3% from 1991.

"The rate differential remains a serious concern for advertisers that may consider using newspapers," reads the report.

Indeed, among papers with circulations of more than 250,000, the average rate paid by national advertisers was $8,487.93 for a 1,000 annual inch contract, compared with a rate of only $4,095.97 for retail advertisers.

Among some major market newspapers, the discrepancy can be huge. The New York Post, for example, has a 231.7% differential, charging national advertisers a rate of $264, compared with only $79.60 for local retailers.

The Four A's notes that the newspaper industry, under the leadership of trade group Newspaper Association of America, is working to address the problem.

In the last year the NAA has launched two major initiatives to deal with the rate differential concerns of national advertisers: the Newspaper National Network and a one order/one bill system.

NNN, which becomes fully operational within weeks, will serve as a third party offering competitive prices to advertisers in a limited number of targeted national ad categories.

Meanwhile, the NAA also is making order processing available on a national scale.

Under the one order/one bill system, any national advertiser will be able to use Publicitas, Stamford, Conn., to process its insertion orders.

Publicitas handles the entire order in a turnkey approach including scheduling, material tracking, verification, invoicing, collection and payment to papers.

Joe Mandese coordinates MediaWorks.

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