The Pitfalls of Paying the "Rate-Card" for Advertising

Understanding the "Rate-Card" in Advertising

Offline advertising can be an effective method to increase traffic, but it can also be costly, especially for those unfamiliar with the industry. Newspapers and magazines typically have a published, fixed rate for advertising, known as the "rate-card" price. This is essentially the price list for ad space in the publication. However, this "rate-card" price does not reflect the average price you can expect to pay. Instead, it represents the maximum price you could ever consider paying. For instance, the "rate-card" price for a publication like the Daily Mirror might be £5000. This is the price the publication would ideally like to receive for all their ads, what they believe the space is truly worth. However, in reality, they rarely ever receive the "rate-card" price for an ad. Most of the time, they receive about half or one-third of the "rate-card" prices.

The Dangers of Paying the "Rate-Card" Price

If you're new to the advertising industry and you call a national newspaper's classified department to inquire about the cost of a half-page ad, they might quote you the "rate-card" price of £5000. You might think this is steep, but if your competitors are paying this rate, they must be getting a good return on their investment. So, you pay the £5000 and send your ad to the paper. However, when your ad appears and the results are less than promising, you might start to question your decision. You might even call the classified department again to express your concerns. They might reassure you that it takes time for people to respond to new ads and suggest you try advertising on a different day of the week. They might even offer you a slightly discounted rate of £4700 for a Friday ad. However, the results are likely to be the same, and you'll end up losing more money.

The Motivation Behind the "Rate-Card" Price

Why would the classified department quote you such a high price? It's not because they dislike you or hold a personal grudge. It's because they earn a commission on each ad they sell. Ten percent of £5000 is £500, and ten percent of £4700 is £470. That's £970 for two phone calls from you. So, while you're losing money, they're making a profit.

In conclusion, it's crucial to understand the "rate-card" price and its implications before diving into the world of offline advertising. Don't fall into the trap of paying this inflated price, especially if you're new to the industry. Instead, do your research, understand the market, and negotiate for a fair price.