How To Buy Magazine Ad Space at a Discount. Tough Negotiations – an Insider’s “How-To!”
By Jeffrey Dobkin
You can get a hugh discount on your magazine ad. You just have to know how to ask. Here’s how to handle those tough negotiations.
How to get discounts on your advertising space: the inside secrets to successfully negotiating with publishers. This is a short but tough course on magazine and newspaper advertising and the specifics of how to get the most magazine exposure for the least cost.
First a question: How do you think magazine publishers come up with their rates?
Answer: They make them up.
That’s right – they make them up. The cheaper magazine publishers who aren’t too profitable meet in their basement offices and figure out the cost of paper, typesetting, and layout; then they have a juice and smoke session with shitty weed and cheap tequila and talk about their circulation, what a reasonable price for ad space is, and what the traffic will bear. Then they make the prices up. How else did you think they do it?
The more profitable magazine publishers go out for a nice dinner, smoke the good stuff we don’t seem get to see around here, drink single malt Scotch and then do the same.
As far as I can tell, most prices for magazine advertisement space are based roughly on what’s reasonable for their circulation and audience. Accommodations are then factored in for charging what the client will bear. (Hey, if you publish a magazine in the medical field, I’m pretty sure the pharmaceutical companies – you know: the one’s who have ALL the money – don’t bitch too much about the cost of your ads.) No sense charging less – the publishers lose profits. No sense charging more – no one buys. So the magazine publishers constant high-wire dancing act is to get as much as they can without leaving any pages blank.
But you say you never see blank pages. Oh, yes – white holes. It happens more than you think. Blank pages. Blank half-pages. Sixth-page white holes. Why do you think you see so many house ads – ads for the United Way, the American Heart Association, and so on? Filler. Filllller.
If you talk to the publishers, they’ll tell you they plug in a price formula. Sure, any of the two or three of dozen formulas available to them for price per page. This gives them a range of between, oh, zero dollars per page and $80,000 per page. Nice spread, huh? With so many formulas they can choose from, they choose the one that creates the price of what the client will bear, of course loosely based on their circulation and their audience.
All magazines have a CPM, or Cost Per Thousand, which means the cost to the advertiser to reach one thousand people. This figure is published in some reference directories, and it has more meaning for the less specialized consumer magazines. The big advertisers like General Motors and Tropicana use this figure to measure their reach in different markets. But to us direct marketing mortals with limited budgets, these figures are much less important. Advertising to precisely the correct audience is more important. Accuracy over breadth. I’d rather reach 100 people who will buy than 1,000 who won’t.
Enough chatter. Here’s how to negotiate.
First, get the publication’s rate card by calling and asking for a media kit and a few recent copies. They’re free. Ask if they publish a directory or annual reference issue, and get that, too. Some magazines charge a pretty penny for their directory issue, but they always send one to potential advertisers at no charge.
When you get the media kit, note the agency discount. As an advertiser who sends in camera-ready art, you already get a 15% agency commission by mentioning you have an in-house ad agency. No question about this – everyone but the novices gets this discount. Don’t let the rep offer you this and claim he’s a nice guy. If he tries this, tell him to get serious.
Now we’re ready to negotiate. Note that there are several rate columns on the rate sheet – the longer you run your ad, the cheaper it is. This should tell you that most publishers will deal. Exception: the bigger magazines – the really big ones – won’t deal. They don’t have to. They’re fat cats.
With small and medium-size publishers, before placing your confirmed insertion order for ad space, ask for the 12-time ad insertion rate. Heck, it never hurts to ask, and this is a good opening position. If no dice, fall back to the six-time rate. Take my word for it, most publishers don’t want you – and your money – to get away. If you start out at the 6-time rate, your fallback position crumbles fast to my last choice: the lesser position of the 3-time rate. If you have to, reluctantly give in to the 3-time rate, and mention that this is the very least they should do for you, or you think you can get a nice price and a good ad position with their competitor, which you’ve been considering.
Still nothing doing? Hrumph. Thank them and hang up. Call back later. We’ll now create our own modified rate card. Ask for the test rate. If you’re a first-time advertiser to this industry or publication, this makes sense to both parties. If your test ad pays off, you’ll place more advertising – so it’s a win-win situation. This is a reasonable request.
No discount yet? Insist on the mail order rate. Some publishers even have a mail order rate printed on their rate card, and it’s usually a 25% discount. You do sell by mail, don’t you? Tell them that while institutional advertising is nice for getting your name out there, as a direct marketing company your ads have to bring in enough cash to make the ad pay for itself, fulfillment of the product to the customer, and some profit. This is true, and in a reality check for a small firm, nothing else makes sense. If your ad loses money, you won’t be back with more ads.
In truth, some magazine publishers won’t budge on a discount, but that doesn’t mean they won’t negotiate. If your magazine ad salesperson won’t budge (even after he or she has been into the publisher’s office several times on your behalf) and you’re still determined to place an ad, go for an upgrade in ad size. “Gee,” I always say – ’cause it makes me sound kinda backward and sooo innocent – “I’d like to place that ad, but 1/4 page is just not big enough to be effective for a product like ours. If I could get a slightly larger space – like 1/3 page for the same cost….” Lots of magazines that won’t give you a cash discount will free up additional space for a larger ad. If they’re still holding out, thank them kindly, let them know you’d be interested in that as a deal, and hang up. See if they call you back.
Almost all magazines will give you a second color free with any decent- sized ad. Once in a while a publisher can be tough on this, but most, like 80% of them, give in without too much being said. When I have a client who asks me to contract for 1/3 page, I always express my request for a second color like this: “My client wants a quarter page, but I think I can get him to move up to a third of a page if you’ll throw in a second color at no charge.” This can also be followed by, “We need to be in the first twenty pages, too – or I know he’ll cancel.” This statement works for increasing ad size, too.
Let’s talk about positioning. Where your ad appears in the magazine is ALWAYS negotiated.
Don’t take “I don’t know where they’ll place you,” for an answer when it comes to where your ad is positioned in the magazine. The advertising salesperson absolutely does have a say in where your ad runs. Don’t take “I guarantee you good position” for an answer, either. Reason: once the magazine comes out and your ad is on page 80, and your salesperson says “Hey, I got you into the first half of the book – pretty good, huh?” it’s too late to get a refund, or even a free reprint.
The best you can do at this point, if you complain loudly enough, is that the magazine will usually reluctantly run another ad at half price. This costs you more money and is not much consolation if your first ad didn’t draw. Your idea of good position – in the front of the book, upper right-hand page (expressed as Far Forward Right Hand or FFRH) – may be different from your salesperson’s definition of good position. You may be thinking first 20 pages, he may be thinking page 60. Better to specify exactly what good position means. Be explicit.
Now here’s a warning. Your space rep will tell you to run your ad three times and get the three-time rate, which all magazines have. In truth, some magazines just stick to their rate card, and you may just have to do this. If you actually need to purchase space for more than one insertion to get a better rate, do it. Consider it an interest-free loan. If you’re placing an ad in an untested magazine, absolutely do not purchase space in three consecutive months. Reason: if the first insertion fails miserably, it’ll be too late to cancel the other ads.
I also don’t care for the crap about how an ad has to be seen three times for maximum draw. It’s BS. If it fails the first time by a wide margin, it’s not going to work with the next two exposures, either. Period. And I’ll guaran-damn-tee you that. For the real explanation of this, see the article “The Three Ad Myth,” found on this site.
You need to see the response to the first ad before committing another nickel. I also don’t care what special issues are coming up (barring overpowering seasonal necessities). If you have to schedule three ads, schedule the first as planned, then schedule the next ad three or four months after the first one appears. This way you’ll have time to see what draw your ad has – or doesn’t have – and if the ad fails, you’ll have time to cancel the next ads – in writing.
If you have any doubts about the publication’s reputation, send the cancellation notice certified, so there won’t be any question that they received it. If you cancel the rest of your ad schedule, you’ll get the “short” rate – which means you’ll pay the difference between the one-time rate and the three-time rate for the ad you ran. This is a legitimate bill, and you’ll have to pay it. Sorry, too late to negotiate this out. Fair is fair.
Good news! I’ve saved the best for last. You can sometimes get ad space for 50% and 60% off. Maybe even 70% off. Sometimes even more of a discount. It’s called remnant space, and all magazines have it once in a while, although I’ve never really had one admit it until I got the call.
Here’s how it works. Remember the white hole I addressed earlier? A page is white when an advertiser pulls out its ad at the last second. It happens. Arguments. Bankruptcy. Non-payment. Whatever. Call the magazine and ask if they ever have remnant space available and at what discount. Tell them you have a full-page ad, a half-page ad, and a third-page ad ready to go if they have a last-second cancellation. There are no guarantees you’ll be in any particular issue, if any at all. Keep in mind the discount they just gave you is a starting figure for negotiating.
You take your chances with buying remnant space, but if you get the call, it’s a chance to have a full- or half-page ad at incredible savings. Third-page ads are more rare – magazines always have current advertisers whom they can plug in with a 1/3 page ad if they give them a big discount. When they do this, they look like heroes to their clients.
The biggest drawback to purchasing remnant space, besides not knowing if your ad will run, is that your position in the magazine will always be poor – towards the back (and no, not that many people really read the magazine from the back, regardless of what the rep tells you). Poor placement is almost guaranteed unless… you negotiate this when they call you. Reason: they’ll move an ad from a full-paying regular advertiser up if the free space is in the front. This way they look great to their full-price advertiser. So – lesson to be learned here: Always, always negotiate placement of your remnant space ad before committing to contract for the space.
Full-price advertiser? Not likely if they read this article. Geez. All my magazine publisher friends are gonna hate me now… Hey, fellas – I was just kidding. Really…
Jeffrey Dobkin is a tough shrewd negotiator who regularly negotiates advertising rates for his clients. He also manages several national remnant print campaigns for his larger clients. Call for information: 610-642-1000 rings on his desk.