Proposal for flat rate of $100 color. Let’s Discuss

Copied below is a letter from Jamie Nesbitt, publisher of the AWNA member newspapers, Brooks Bulletin and Weekender. He urges members to act now to change their approach to the national advertising marketplace, particularly in how community newspapers set their color rates, citing the example of a recent AMA campaign that appeared in Alberta dailies but bypassed community weeklies entirely.

If you want to respond to Jamie’s letter, he can be reached by email or please feel free to use the comment section below this post, or in the Facebook Group “AWNAmembers”. Discussion is most welcome.

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March 7, 2014
Hello all:
I assume there isn’t one newspaper owner in Alberta, and Saskatchewan for that matter, who isn’t experiencing a severe downturn in national advertising. According the AWNA, national ads are down 20 per cent from last year and I believe they are down that much more from the year before. And as we see today, this trend is stretching right into the spring of 2014.
The only positive for several papers is Chrysler, Ford and GM. But this will not last. What, then, when they go?
I noted in October that the Calgary Herald was quite full of nationals that I thought should be in our papers. There were ads from Travel Alberta, AMA, Telus and several of the banks…I thought for sure AMA and Travel Alberta should instead have been in our papers. I clipped a stack of these ads and sent them to AWNA executive director Dennis Merrell with a note. Basically it said that while I realized that the Herald and other dailies tell agencies that they sell enough papers in rural Alberta therefore making it unnecessary for them to purchase ads in weeklies, I considered this a challenge and suggested that perhaps our sales force should be knocking on agency doors and pointing out this may not be true. Perhaps adding another sales person in south Alberta would be something to think about.
But the more I thought about this, I couldn’t help but think that AMA and Travel Alberta reps are very savvy people who would realize that Alberta weeklies are their best bet for advertising. So, why then, were they not? What would be so drastic as to turn these people, long time customers of our newspapers, to leave us out of their campaign?
I thought AMA’s quarter page in the Herald cost them about $4000 or perhaps a bit less. But using this as a base number I figured if they put this ad in five major dailies in the province it would cost about $20,000 to $25,000.
I then asked Jeff at AdWest what it would cost to put a full color quarter page in each of Alberta’s 122 weeklies. He put together an ROP advertising quote in five minutes.
The total cost for the campaign was $74,481.94 less the agency discount of $11,172.29 for a net cost of $63,309.65 based on our National Rates. But what shocked me was of that net amount $30,000 was the charge for color. We charge $75 for color. We believe it’s a seller and I know we sell more local ads because at times we give it away for nothing. But color rates at AWNA papers are all over the map—from a low of $75 to a ridiculous high of $390.
How can we expect our sales effort to propose a competitive alternative to someone like AMA when the first thing out of their mouths is that color will cost them $30,000? This is a non-starter. No wonder they (and more and more agencies) are leaving weekly papers out of the mix.
A while ago we established a new retail rate for advertising that shaved 17 per cent off the line rate for clients meeting specific criteria. At the time I thought it was a good start because our national ad line rates have been creeping up every year while, for many of us, local rates have remained relatively low. For years we thought nothing of increasing our national line rate to counter higher and higher volume discounts that were offered to agencies. Coupled with high rates for color, they have made our papers fairly unattractive as we see in today’s numbers. Obviously we have hit the wall and the dailies (which for some reason we got into bed with at CCNA but that’s another story) are reaping the benefits.
I suspect this lack of advertising has encouraged newspapers to sell directly to agencies while others, like us, are looking for ways to get it across to some agencies that we would always entertain discounts for advertising and we come with cheap color. I told Jeff that for a full page ad each week we offer a discount of 25 and sometimes 30 per cent and why can’t AWNA do this?
But according to AWNA’s discount structure, an advertiser would have to buy 2.2 million lines before a discount like this would kick in. On an average tabloid page that amounts to 1,666 pages. For a single paper that’s a full page/week for 32 years! To get any discount at all, the minimum lines purchased would need to be 33,000.
But like Jeff said, it doesn’t make a bit of difference if we offer our own discounts. We have to act as a group to attract group buys. I agree.
I sense a dramatic shift in the way agencies purchase weekly newspaper space. Gone are the days of multiple newspaper purchases and large budgets and we must act accordingly. AWNA members must have a good discussion about this with the aim of ultimately lowering line rates and those for color so that weekly newspapers are the first thought in any campaign. We know we are read and that we are the first choice for news in any community. But this doesn’t matter to anyone if we have priced ourselves out of the available budgets.
We must be affordable. To this end I suggest that discussion centre around AWNA proposing a flat rate of $100 for process color and an overhaul of our rate structure. We must have a rate structure that is affordable and makes sense or we can say goodbye to more and more advertising.
If we don’t act, newspapers will more and more go directly to the agencies to offer deals on advertising and others will seek allegiances with other papers to sell advertising on a regional basis with rates that make sense. AWNA will suffer greatly. Is this what we want?
I welcome your thoughts.
Jamie Nesbitt,
Brooks Bulletin