Q: How do magazine publishers set their advertising sales prices?
Answer: Setting advertising sales rates is
a complex topic that is covered thoroughly in our book, Starting
and Running a Successful Newsletter or Magazine. Here's
a tiny overview:
Advertising sales rates are always related to circulation, meaning
the number of paid or unpaid subscribers and newsstand buyers
of your magazine. The relationship is called "Cost per thousand
readers" or CPM. Every advertiser always divides your page
prices by your circulation. If you have 10,000 readers and your
ad pages cost $1500, then they'd divide $1500 by 10 and your
CPM would be $150. The calculation allows advertisers to compare
the prices of magazines with completely different circulation
Publishers compare their prices to competitors' using CPM. You
will find that magazines in a niche tend to charge the same CPM.Take
the time to study what CPMs are common among your prospective
competitor magazines or websites.The easiest way to set your
prices is just to pick something close but possibly lower than
your competitor's CPM. If theirs is $50, yours could be $45.
Something like that.
Publishers always give advertisers discounts off their basic
CPM for certain kinds of "good behavior." For example,
if an advertiser agrees to buy an ad in every issue you publish
for the coming year, you usually give them a discounted price
for each ad. Those are called frequency discounts. You may see
other kinds of discounts.
Before you set your ad prices, buy and read Cheryl Woodard's
book, Starting and Running a Newsletter or Magazine. We hate
to be so bold, but really, you'll find its the best $20 you ever
spent. You can find out more about the book here. You can order
it from Amazon.com or
you can telephone the publishers at 800-992-6656 and order it
that way. It's also available in bookstores and libraries.
You will also find valuable advice and step-by-step instructions
in our simple advertising rate
card worksheet ($30)
Next, call all your competitors or visit their websites. Ask
for their media kits and then study their advertising prices.
Trust us, its a tradition in the publishing business to borrow
ideas from other publishers, so do yourself a favor and study
some magazines like the one you want to publish to see how they
price their products.