The ad package payoff; Need more muscle in your market? Create a magazine ad package that will enhance your credibility and boost your sales

Folio: The Magazine for Magazine Management, August, 1989 by Daniel Ambrose

The ad package payoff Are you managing a mature magazine and seeking new sources of advertising revenue? Do you suffer from year-end cancellations? Does your magazine seem too small to sell advertising to certain accounts that like the quality of your audience? Are your advertising sales expenses to high compared to revenue? Have you been pondering how to consolidate you successful growth and protect your market share? If so, this article is for you.

In the last few years, corporate magazine packages have become an increasingly important part of magazine management and advertising sales. It is no wonder--with the publicity surrounding "rate negotiating" in the magazine business, and with the controversy over the economies of scale in the media business fueled by the Time-Warner proposal--that there is a real sense that the magazine industry has matured. More and more publishers are seeking growth by invading one another's territory. At the same time, prudent publishers must consider defending their turf in new ways. One of those ways could be the creation of a corporate or group magazine purchase. Consider the following:

A survey of advertisers and agencies conducted by the Advertising Age's marketing department in 1987 found that--

* 52 percent of respondents said that "the fact that a magazine is part of a package (frequently or occasionally) influences me to schedule it."

* 53 percent said they frequently or occasionally "drop a magazine they like for a competitor because it improves a package discount."

Buying groups of magazines has become so important that SRDS, with the encouragement of its informal advisory group of media directors, instituted a new category, 22A, "Group Buying Opportunities," which premiered in the March 1989 issue of Consumer Magazine Rates and Data.

This article is intended to help you consider and create a corporate or group magazine package to maximize advertising sales. The second part of this article (scheduled for the September issue), will discuss the approach to promoting and selling these corporate packages.

Today, most publishers take one or two of the following three different routes when building an advertising sales package for their magazines. Keep in mind that these approaches are not mutually exclusive.

1. The corporate discount: This is the most common program. Any given corporation earns these discounts based on the total volume from all its divisions and subsidiaries that advertise in a publishing company's magazines. For example, CMP Magazines, a fast growing publisher of computer and travel trade magazines, takes a very basic approach by giving corporations a frequency discount based on the total number of insertions in all of its magazines. No corporate rate card is needed--simply a tracking method to keep track of the insertion levels.

Other magazine companies designate a minimum level of pages or revenue to be reached in each member magazine before corporate discounts take effect. Many publishers, such as Hearst, have escalating discount levels tied to minimum common levels of advertising. Minimum levels are generally based on either revenue or pages.

2. The general accounts approach: This tactic is used in addition to the corporate discount (above) by publishers such as Penton Publishing, Cahners and McGraw-Hill. By defining a group of accounts, such as those "nonendemic" to a trade publication, a group of magazines can pursue business it would otherwise never get.

Publishers may use this category-specific approach for any identifiable group of advertisers without giving away an unnecessary discount on their existing business. This approach can bring new advertisers into a group of magazines, creating growth when the magazine is otherwise mature in its narrowly targeted industry. For example, Penton's 16-title "Executive Network," which includes titles such as American Machinist, Machine Design and Restaurant Hospitality, has been especially successful attracting business travel advertisers such as TWA, Hertz and Best Western Hotels.

3. The independent network strategy: Single-title magazine companies or publishers with several titles that will not fit together can create a strategic marketing alliance--a network--with other titles that are not owned by their company. The California City Magazine Network, for example, combines San Francisco Focus, owned by the local public television station, Los Angeles, and San Diego Magazine, a family-owned operation. Each sells its local advertising independently, but uses the network to sell national advertisers, sharing office expenses in New York and Chicago. In this way, the California City Magazine Network offers enhanced geographic coverage to advertisers and makes the member magazines easier for the national advertiser to purchase.

Another example of the independent network strategy is The Leadership Network. It represents nine small "thought leader" titles including The New Republic, Technology Review, Foreign Affairs and National Review, for national advertising sales only. The Leadership Network operates as a representative organization with a board of directors made up of the publishers of the individual magazines. It employs a group of salespeople and does its own promotion and marketing. Although an advertiser may buy a single title, discounts favor the purchase of more magazines.