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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 sizes.

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.

 
 

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