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Sometime in the next few months, you may get RFPs from agencies asking for your advertising proposals and rates for 2007. If these RFPs follow the form of the past several years, there will be three messages:
• We will not pay more in 2007 than we did in 2006.
• While you hold prices constant, we expect more—free insertions, free merchandising, free coupons, more and more free things.
• We hate you.

If you dare to not hold your rates, you will likely receive a call from a 22-year-old media buyer who will shriek into the phone your need to meet agency demands, or never sell advertising in this town again.

Welcome to media buying 2007, which looks more and more like clearance days in Filene’s Basement. It’s enough to make a publisher wonder whether there is an easier way to generate revenue--like selling a kidney, maybe.

Unfortunately, too many publishers react to arm-twisting on rates by asking what may be the least relevant question of all: “Are other people raising their rates next year, and, if so, by how much?” Setting rates by building in the average rate increase of other publishers would be like deciding on your healthy weight by asking how much other people are gaining each year. If you weighed 300 pounds to begin with, adding the one pound everyone else was would still leave you on track to coronary disaster.

Rather than following the pack, the best approach to setting ad rates is an old and simple one, first written by the advertising consultants who inscribed their counsel on the ancient Temple at Delphi: “Know Thyself.” This breaks down into three strategies: know where you stand in relation to other titles in your particular field, know what special values you possess, and know how to leverage those values to maximum profit.

Knowing Where You Stand
Head to the SRDS Business Publication Advertising Source for data to begin your competitive analysis. Because publications in different industries may have characteristic prices ranges, define a competitive set of publications, including both association and for-profit titles. Calculate the cost per thousand impressions (CPM) by dividing the one-time four-color full-page rate by the paid (or, if a controlled publication, requested) circulation. This will give you a first ballpark estimate of how your rates compare to those of competitors.
It is only a ballpark, however, for several reasons. First, many publishers don’t stick to their published rate card, but use it as the starting place for discounting and dealing. Publications that appear expensive on the sheet may not be expensive on the street. Second, the quality of circulation statements can vary widely. Even in the wake of circulation scandals that turned the spotlight on dicey circulation claims, some sworn statements contain figures that appear questionable. Finally, CPM depends on the focus of the publication. A publication that reaches a targeted audience of influential decision makers can command a higher rate than a publication with a wider audience of non-managerial readers.
Though these factors make it hard to compare the CPM of your publication to those of competitors, they will at least give you a first clue about how media buyers will initially evaluate your rates, and what the range of rates is within your field.

Knowing Your Own Value
By itself, a CPM that is high for your industry doesn’t automatically mean your publication is overpriced, and a low CPM doesn’t necessarily mean you are underpriced. To know whether you are priced fairly, you have to know your publication’s value.
Enter research, from either a syndicated survey or a custom survey conducted by a respected independent research firm. To command higher rates, you will need to show that your readers are highly engaged with the publication and are the people who make or strongly influence purchasing decisions. You should have the data to demonstrate impressive answers to questions such as these:
1. How much time do readers spend with your publication? How many of the last four or six issues have they read, and how thoroughly do they read a typical issue?
2. Do they keep the publication for future reference? How many other people also read their copy?
3. What percentage would select your publication over other publications? Is it considered a “must read” in the industry?
4. What authority do they have to select advertisers’ products? Are they the final decision makers or do they strongly influence purchasing decisions?
5. What positions do readers have within their companies? Are they C level or high-level decision makers?
6. How clean is your circulation? Are you BPA audited, or, if not, can you produce postal or print records to prove circulation claims?
If you can’t demonstrate favorable responses to these questions, then use the results to think hard about retooling your publication for greater reader engagement and allegiance. But if you have strong results—and most association publications do—then it’s time to leverage your findings to the best advantage.

Knowing How To Leverage
Because media buyers often first approach a publication with demands for discounts and deals, publishers are often tempted to react defensively and agree to hold or cut rates. Don’t--at least not before you have identified the unique value that your publications alone can deliver to advertisers. Many association publications deliver access to an engaged readership available nowhere else, and it is foolish to sell that access short. Focus on offering media buyers more value, not lower prices.

Comb your research data for gems that set your publication apart. You might emphasize the allegiance of readers (“90% read an average issue cover to cover”), their purchasing authority (“95% are final decision makers on capital purchases”), or the scope of circulation (“Reaches 88% of C-level executives”). Whatever your strongest selling points are, don’t put them in a media kit and expect buyers to remember them. Put them in every communication vehicle you use—media kits, print promotions, Web sites, e-mail signatures, and more. It may take seven or ten exposures before a media buyer begins to remember what makes you a leader deserving of higher rates.

So steel yourself for the coming pressure on 2007’s rates. Forgo the beach book and spend the summer writing the book on how valuable your publication really is. Then, when the demands come for holding your rates, you will be ready with the proper response: No.

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