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More are switching over to modular ad units

Feb 22, 2007

When Robb R. Olsen remembers the old rate card for the Palm Beach Post, he's reminded of a schematic for cold fusion.

It was that complicated, and in fact so complicated that the paper decided to chuck it entirely. Out went the entire tangle of pricing based on lineage and inches going back to the days of linotype operators and hot lead.

That was in 2004. The Post implemented a cleaner look to its pages, switching to modular ads--eighth page, quarter page, half page and full page--and a rate card that didn't take a nuclear physicist to decipher.

Olsen, the Post's vice president of advertising, says the switch has led to cost savings for the paper and has also made it that much more attractive to advertisers.

And all this is good news for media buyers.

Among the biggest complaints buyers have about newspapers, complicated rate cards are near the top of the list. Deciphering rates has long been a labor-intensive process, and buyers complain that they're never really quite sure they come away with the best deal.

But papers across the country are following the Post in making the switch to the modular ads and simpler rate structures. Papers that have made the switch so far include The Wall Street Journal, The Orange County Register, The Chicago Sun Times, The Times Herald Record of Middletown, N.Y., and The Traverse City News in Michigan.

"I think you are going to see more papers in the States and Canada going modular and improving their pricing," says Chris Kubas of Kubas Consultants, a Toronto-based newspaper consulting firm.

The reasons are quite practical, and there are actually quite a few. One big spur, of course, is the pressure of competition. With more media outlets chasing limited ad dollars, newspapers are a lot more anxious to make buying advertising easier.

And advertisers like modular. “It’s a nonissue with advertisers because modular is often easier for them. All they have to do is pick a size from a menu,” says Ed Strapagiel, executive vice president of Kubas.

But modular offers papers advantages that go well beyond.

A modular format makes it easier to reduce the width of the paper, as the Journal did just recently when it went from a 15-inch wide page to 12 inches. The Journal now has seven standard ad units.

But the far bigger appeal of modular is that it allows publishers to structure discounts that encourage both larger ads, which in themselves generate more revenue, and bigger spending commitments from advertisers.

"There’s always a good reason to buy a larger ad, and a spending-based discount structure works hand in hand with modular ads,” says Strapagiel.

As the Post's Olsen explains, the old system of discounts actually worked against the paper by encouraging "advertisers to buy the lesser-valued advertising space at full rate to earn a significant discount on the premium positions. Our initial motivation was to get rid of the decades worth of allegedly temporary pricing incentives that had been put in place but never removed."

Over two years, the Post phased in the modular ads, and with new pricing incentives the Florida daily has been able to increase its average ad size.

“The number of insertion ads increased by 52 percent in retail, one-time ads decreased and the amount of revenue in retail ads increased by 10 percent,” Kubas says. “It’s not just modular, it’s about continuous spending incentives and making advertisers spend more.”

And the new system is also saving the Post money. "The potential cost savings in a more manageable stable of ad sizes was to be realized in all areas of the business, from ad operations to layout and newsprint savings from less 'fill' space."

The change has allowed the paper to move inhouse sales efforts targeting smaller advertisers, relying on phone and fax.

"I'm proud to say that we achieved what we set out to do. In our first two full years, we saw a 24 percent decrease in the number of different ad unit sizes that we published,” says Olsen. "At the same time, we saw an increase in the average ad size of 16 percent."
 



Lisa Snedeker is a North Carolina writer who covers newspapers for Media Life.




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