There’s the potential for making lots of money in the newspaper and magazine business.and some have grown up from almost nothing at all. You want to be very careful about your use of credit, your use of trade-offs or bartering (advertising for goods or services). For the purposes of advertising potential, you may find it more profitable to mass mail the paper to an entire market.
That can save you money on each address mailed out, since you would “saturate” each mailing route included in your market area. And it can also allow you to truthfully say that you reach everyone in a given market. What’s a market? Well, it can be the town or community you cover, if you’re producing a neighborhood or community paper. Or it could be all the businesses in your area, your country, or your state or region.
or it can target a certain kind of business, profession or other specialized market niche. You may end up with something more like a magazine, featuring coverage on a very specialized interest group.
Subscriptions also have their own appeal. For one thing, everyone receiving the paper is paying for it. That can help to at least cover the printing or mailing costs (seldom both). And the fact that you have fewer readers can be a good thing when it comes to paying for printing or mailing. And the fact that people really want your paper is a good advertising edge, since your advertisers will know (because you tell them) that paying subscribers tend to make the time to read your publication. If people are really looking at your paper, that means that people are actually looking at ads. And that is what your advertisers want to know.
Where the money is:
As you may have gathered by now, your greatest potential in profit is not the selling of subscriptions. Subscriptions are a useful tool, yes. But the real income for any newspaper is in the selling of business “display” ads.
A display ad is a regular ad that usually (but not always) includes graphics or photos of some kind. It may be small or large, but it’s always income for the paper. It may be for a business, a group of businesses, an entire industry, or for a non-profit group of some kind. And you may charge differing amounts depending on the type of customer. I have often given true non-profit organizations free or discounted advertising as the space was available. By “true” non-profit, i mean church, community or charity groups, not commercial industry.
How much can i charge for advertising?
That’s a question you will need to answer for yourself before you get too serious about starting a paper. And it’s a question that takes more than a few comments from me to answer.
You need to have some idea of what the competition or what other similar publications similar markets are really charging. Ask for a rate sheet from a local paper or periodical that’s similar — in physical size and readership — to what you want to produce. That’s the first place to look. But it’s only the beginning.
Getting the real story
Every industry has its published pricing and then it has another level of pricing for important clients. Newspapers and periodicals are no different. So you may need to do some checking with people who advertise, to get an idea of the real prices being charged for ads.
Once you know where the other guys are, then you must determine where you have to be. How many readers can you claim to have? You may claim, for example, that every copy of your paper (every mailing address or each copy sold in a store, for example) has the potential for 3 readers. Some publications, like radio stations, claim astronomical numbers, stretching things well beyond any possibility of reality or fact. If you are wise, you will be conservative. Produce a good publication, and let it sell itself.
Breaking it down
After talking with printers, and deciding which press will run your paper, look at the available space you have to offer. Let’s say you decide to run 16 pages (papers usually run in multiples of 8 pages, large sheets folded down to make a paper “signature”). And let’s say that each page is exactly 11 inches by 17 inches, and that you will leave a 1/2 inch margin all around (just to make our example easier to follow). That gives you a total space per page of 10 x 16 inches. And if you divide your pages into a default of 4 columns, each separated by a 1/8″ gutter, then you have 4 columns (each one about 2.40 inches wide) of 16 “column inches each.
So, then, if a page has four columns of 16 inches each, that gives you 64 column inches per page. And 1,024 column inches in the entire 16-page paper. But not all those inches are for sale.
To start with, you have a footer and/or a header for each page. And you must have something of interest on each page (some actual content that will make readers want to pick up and read your paper). One standard for the industry is roughly 50/50. So let’s say you go with that standard. In a 16-page paper, you won’t count the front page, since that should be filled with news and features to draw people into the rest of the paper. Always reserve your front page for news and items of interest.
You may also have other pages that you won’t sell ads on. But for now, let’s figure you have 15 pages, half of which you can sell advertising on. That gives you 64 column inches, divided by half to leave 32 col. Inches per page, multiplied by 15, to leave you a total of 480 column inches to sell.
That may not sound like much right now. But it’ll seem like more when it’s time to go out and sell 480 column inches of ads for the very first time. Then again, once you get busy selling, it’ll be fun. It can be one of the best parts of the publisher’s job. Everything else is more serious work.
Counting the costs:
Let’s say you’re printing about 5,000 copies in the first issue. And let’s also say that you mail them all out at 18 cent each (an arbitrary number, based on standard rates for the postal service). The print shop charges you $600.00 and the post office charges you $900 for postage. There are other costs to factor in, such as your gasoline, your rent, your own labor and time, any photo-processing or other related costs, any wages you must pay for help, and so on.
But to keep it really simple, let’s say your first issue costs you $2000 to produce. That doesn’t count any profit, and we must have a profit, so let’s factor in 25% for your pocket, a generous but fair amount to start with. Many publishers don’t actually take anything for themselves during the first year or so, and others take out much, much more from the very beginning.
Take the $2000 and multiply it by 1.25 to reach the amount you want to make on this first issue (some do a reciprocal, dividing $2000 by 75% or .75, to reach a slightly higher figure). $2000 plus $500 (25%) will give you a figure of $2,500 that you really need to make in sales from your first issue.
$2,500 divided by 480 column inches equals out to $5.20 per column inch. So that’s the starting figure you need to work with when selling ads. But not all your ads will be charged at that rate. In fact, you should never actually sell an ad at that rate.
Here’s why.
A person who buys a one-column-inch ad for just one issue will not get the better rate you should offer the loyal business customer who advertises with you every single issue, and who buys a 4th of a page at a time. And you need to work up the rates for everyone to see (just like the other papers who provided you with their rate sheets. Quantity and frequency rates help you to sell the bigger ads for more issues at a time. And the bigger the ad, the less people you must visit with to sell the same amount of space on a given page. And the more issues they agree to advertise in, the less often you have to go around to see everyone.
Your time is all you really have in the newspaper business, especially if you are the salesman as well as the publisher, reporter, and janitor. So reward those who save you time and who invest more with your paper.
Selling add space
Building a base for long-term success
As mentioned on the previous page, bigger ads and ads that run for more issues should cost the advertiser less (per column inch) than ads that are tiny or that run just once. It makes good business sense. The advertiser who buys in greater volume or who buys more often will appreciate that consideration.
You can control a few of the factors, but not all of them.
How you actually price out your ads is your own business. But if you want to stay in business, you must make a reasonable profit. You must also be able to compete in the market. These two facts of business should always be in your thoughts when you price ad space.
For example, if you run a beautiful, “full” color (actually called “process” 4 color, 5 color, or 6 color) publication, and your market is mostly upscale businesses and their clients, then you can rightly demand a better price. After all, your costs are greater, and the product you’re selling is of a very high quality. If there are enough advertisers who can afford to run ads with you, and if they agree that your publication is worth the extra costs, then you’ve got an edge on the market.
Another edge is the numbers of actual readers, as mentioned before. You may run a simple, black ink publication, but if it reaches a huge market, then you have that edge in your favor.
The quality of content is the biggest edge of all in print publications, just as it is on the internet. If you provide what readers want to read and see in their paper, then you have the basis for a long lasting publication. But you still have to pay your bills, so be careful how you sell your ads.
make the numbers work:
You cannot afford to undercut yourself for anyone. If you figure that you must have $12 per column inch to cover all the basic costs and some tiny margin of profit, then the very lowest price you can ever afford to give any advertiser is $12 per column inch.
Working with that number ($12/column inch), if you have a tabloid paper with 11×17 pages, then you will have about 64 (maximum) column inches to sell. So if an advertiser buys a whole page, you must charge him or her at least $768 for that page. And even if they want to buy the page every issue for a whole year (and pay you for the whole thing up front!), you must still charge them at least $768 per insertion (that is, for each issue).
So then, if the local bank wants to buy a full page ad for only 3 issues, you can’t get all excited and give away the pages for the same price you’d have charged them for a whole year of the same size ad. You can’t allow your gratitude or enthusiasm to make the sale put you out of business. Know your bottom line, and work hard to stay away from it, or at least on the top side of it at all times.
You want to build a base for long-term success.
On the other hand, be careful not to go to the other extreme. Pricing is by no means the only important factor, as noted at the beginning of this section. But pricing is where most of us live, both in business and in our personal decisions. So you need to be able to offer a fair price to the guy who only wants to buy a small ad and run it just one time.
In fact, lot’s of smaller businesses start advertising this way, especially if they’re not in the habit of advertising. They’ll only see the price of the ad, and it scares them. They want to try it out, but they can’t see how they’ll ever afford it. So they only commit to one or two ads at a time. If you blow them out of the water with a huge price, you’ll probably run them off without ever seeing that first ad.
Bonus help for the local businesses:
One thing you can do to help such advertisers, is to have a business column in your paper that features new advertisers (but you may not want to say that right out loud), and you can offer to feature a new advertiser in your column, or to at least make some mention of the business. I’ve had business owners contact me and become advertisers in a paper just to get into the business column, without any selling effort on my part at all.
A powerful help for new advertisers is a rate sheet that shows them just how much they will save on their ads by committing to 3 or 5 or 6 at a time. Once you figure your bottom price (the price you must never go below) then you can begin to work your way backwards to the one-time-only ad, and also price the smallest ad size.
Price your way backwards, by size & frequency:
This will take you some time. Don’t try to cheat by taking the rates from another publication. You don’t know how they may have arrived at those ridiculous prices. Many publications, for instance, have other charges that also get added to the final bill for any ad, such as the cost of building the ad, the addition of graphics or photos, and copywriting, etc.
Or the guy who figured the pricing may have been drunk, or on some mood-altering medication for all you know. I’m more serious than you may think.
Step 1 if you can afford to sell a full page for one whole year at $12 per column inch (that is, if you sold all the available pages in your entire paper for that price and you could still pay all your bills), then you make that figure your rock bottom price for the customer who buys the whole thing. That’s your give-away price, where you simply cover your costs. And no one — not even your mother —should ever get that very special rate.
Step 2 what if you can sell only half of your ad space? With that thought in mind, pick an arbitrary figure, a figure for the smallest ad, for a one-time-only buyer. Maybe it will be the price you were quoted when you called the nearest competitor to your market and asked them how much for a 1inch ad for just one issue.
Now you need to work within these two numbers — the very lowest and the very highest. You’ll probably adjust your pricing several times before you finish all the figuring, but you need to have a general idea of where you want to go, and what the guidelines should be.
The easiest way to keep track of what you’re doing is to offer a set percentage discount for each increase in both size and frequency of appearance. But it cannot be some huge amount, or you will run out of room before you reach the end.
You may want to set specific levels, such as all ads from 1 col. Inch up to 5 col. Inches will be $18 per col. Inch. And then the ads from 5.5 col. Inches up to 8 col. Inches will be $17 per col. Inch, ad so on. Keep it simple as possible, but make sure it works.
Feel lost? It’ll pass
Even if this whole idea is brand new to you, it’ll start making sense as you keep working with it. Before long, you’ll have a very good idea of what you need to do. And as you face your first customers, you’ll be able to make refining adjustments, if needed. But be close before you face anyone, and be firm, because some folks will test your resolve simply because that’s how they do business. If you cave in at every challenge, you’ll soon be holding an auction to scrap your business.
Some papers will sell certain kinds of ads at specific rates in certain sections of the paper, such as trade ads (for plumbers, tv repair, etc) in a “local services” section. But be careful. You do want to help out the little guy (why force him to advertise with someone else?), but you do not want a business that can afford better ads to hang out in the “economy” section. So be sure to set rules, or better yet, use rewards of some kind to entice the bigger advertisers to do more.
Other source of income:
Inserts & classified ads
Inserts and classified ads are other sources of income for newspapers. They can come in handy, but they won’t pay any bills, unless you are running a shopper, and then you’d better make sure they do pay your bills.
Inserts are usually easy money. You do have to stuff the papers with them (or hire a youngster or two to do it) but otherwise, they are just income.
Just be sure the inserts won’t add too much weight to the papers you’ll be mailing. Postage can hit you hard, and it can take away all your profit, more than making up for the little income you thought to gain by the inserts.
Don’t be afraid to try. As a rule, inserts are nice things. You can price them according to size (8 1/2 x 11 or 11 x 17, etc), according to weight or the number of pages, for sales papers, and so on. You may offer a discount for repeated insertions.
Think about it…
One thing to remember is that you’re saving the advertiser money. If he doesn’t insert his material in your paper, he must use the post office (very expensive, by comparison) or another, usually larger (and therefore more expensive, newspaper.
Not all businesses will be attracted to your paper for inserts. Some will want a much greater coverage of your community or region than you care to offer. But many will like the coverage your paper has. And you can help them out while you make a little more money.
Classified ads are a world in themselves. Some shoppers (papers that only have ads of all kinds) make a lot of their money on classified type ads. Take the time to see what’s not being done, or not being done adequately in your market.
You may not even want to charge anything for classifieds. But i believe that even a small, insignificant charge for classified ads is better than nothing. Don’t ever give the impression that your paper, no matter how small it may be, is worthless or “cheap” in some way. Always produce a clean, first-class publication, and always let people pay you for what they want.
Make sure businesses pay a commercial rate for their classified ads. You don’t want every advertiser trying to use classified ads just to save a buck. There will be times and certain circumstances when you should give a free ad or free coverage of a commercial event. For example, you may give a free classified ad to every display ad buyer.
Read 75617 times last modified on tuesday, 24 january 2017 19:02
