In an era of more and more print ad dollars shifting to Digital due to the fact that consumers are spending more time reading content via Web sites, tablets and mobile; two huge targets of opportunity continue to be ignored. More client dollars are spent below the line in non-measured expenditures versus traditional advertising. The two biggest categories that most magazines totally ignore are co-op and promotion which combined represents over 16 billion in total revenue.
Over 7 billion dollars a year is allocated for co-p where national advertisers help support major retail customers local efforts. Ironically, almost half of the 7 billion is not spent due to the lack of interest by retailers in supporting their share of the nationally supported local programs. The reason for the lack of support is that in many cases the local advertiser can buy local TV, radio, newspapers, etc., at a lower rate than the national advertiser. Ironically, a national advertiser can purchase advertising in magazines at a much lower rate than local or regional retailers. By using a print ad the way a national advertiser might use TV; a magazine can create a new co-op opportunity for national advertisers.
I know this first hand, as while at Time Magazine I sold co-op programs to national advertisers. Here's how it worked. A national advertiser would buy a page. Their ad would have a 1/8 patch at the bottom that could be changed to feature a different retailer(s) for as many markets as a magazine could break out. For example, back in 1971 Time magazine could break out 110 editions/markets. Obviously there was a charge for each plate change per market. Now the national advertiser could offer key customers a full page ad in a prestigious magazine for just a nominal cost i.e. the retailers' share of the co-op. Even if the retailer attempted to buy a major market on his own i.e. New York Metro, they would not only pay a higher rate but have production charges for the ad as well. This worked so well for Time that I helped Sports Illustrated sell similar programs in the early 80's. For some reason, though, co-op seemed to be an area that most ad sales people and Publishers seemed uncomfortable dealing with? After I left Time Inc. these programs seem to stop.
While some national ads today may feature key retail accounts this is done in most cases by the national advertiser to obtain the much lower retail rate. Magazines need to call on those people at the client who control co-op dollars.
National advertisers spend over 8 billion in promotion each year and these expenditures are projected to keep on increasing at a much higher rate than advertising. Most all major clients have promotion agencies; yet few if any magazine ad sales reps ever call on them. Before any major ad campaigns are launched promotional themes are created for key selling seasons i.e. Christmas, Back to School, Mother's Day, etc. Then the advertising is created to support these programs. Every magazine has major and highly innovative promotional programs that in most cases become free added value programs. Traditional ad agencies do not have promotion budgets. Just as ad agencies have the AAAA, promotion agencies have the Promotion Advertising Association of America. They have yearly meetings which few if any magazines have ever attended.
Again, I have had personal experience seeing how that by calling on a promotion agency one can get a major print schedule. Back in the early 90's I was Publisher of Inc. magazine. Inc. had zero business from GM because our syndicated numbers were so bad. I tried unsuccessfully to explain to GM and their agencies that people who work 70 or more hours a week building a fast growing small company would be highly unlikely to participate in a syndicated survey. That led me to call on one of GM's major promotion agencies that was responsible for dealer meetings. I had a promotional idea for dealer meetings that involved showing dealers how to grow their business. For example, Inc. would pull together successful CEOS of fast growing small companies along with our editors to share the top 10 secrets from each participant on how to grow your dealership. There would be a video and leave behind; plus an Inc. special issue sponsored by GM. GM bought the promotional program after just one meeting and when they asked for ideas on how to promote it to their 100,000+ dealers across the country; it was easy to come up with a plan. GM could buy a one year subscription for the dealers and then have a cover wrap promoting their upcoming dealer meetings along with messages from both Inc. and GM in every issue. GM liked the idea and now since they were using Inc. as a promotional device decided to run a spread in every issue. That grew to 6 or more pages when new models were introduced.
Maybe there is some solid business reason for magazines to ignore going after co-op and promotion? I don't know and I have certainly tried over the years to get magazines interested. I have come to believe it's mainly that old habits are hard to break and that magazine companies have relationships with ad agencies and are more comfortable doing business as usual.
Steve's most recent book You Can't Fall Off The Floor - The Insiders' Guide to Re-Inventing Yourself and Your Career chronicles his 50 year career working for over 25 different companies with 189 lessons learned and insider tips from Gayle King, Cathie Black, Chuck Townsend and 28 others; Blacker is still going strong today as a partner in Frankfurt & Blacker Solutions, LLC. His web site is blacker-reinventions.com and e-mail address is email@example.com
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