Q: While I would like to advertise in bigger mediums than I do, I am usually frightened away by the high cost of mass media advertising. What suggestions might you have for an entrepreneur like me?
Amy
A: One thing I would suggest would be to avoid paying retail for your ad buys, if at all possible. What do I mean by that? Simply this: When people buy media time or space, they are quoted a fee from the “rate card” by the ad rep for that media outlet. The rate card is tantamount to an automobile’s sticker price, and you wouldn’t pay that, would you?
The fact is, radio and television stations, as well as newspapers and magazines and websites, often have plenty of wiggle room when selling ad space. So a good rule of thumb is this:
Never pay the rate card.
However, it is only that, a rule of thumb. Yes, rate cards can be negotiated (just like a car’s sticker price can be negotiated), but not always. As with any negotiation, it depends upon the situation.
For instance, if you want to advertise in your major local paper, negotiating the rate card will be difficult if it is the only show in town; the paper has no incentive to negotiate. However, if there are two main papers in town, negotiating the rate card with either is much easier because there is competition for your business. And if there is a smaller paper in town, negotiating the rate card is almost expected.
There are two ways to negotiate the rate card. You can either hire an ad agency or media buyer to do it for you, or you can do it yourself. A great media buyer should be able to reduce the cost of your media purchase between 15 and 50 percent, and in some situations, maybe more. If you are looking at a comprehensive campaign involving, print, radio, television, and so on, hiring an established media buyer is a must and can save you much more than if you tried to purchase and negotiate it all yourself.
How can an ad agency get such reduced prices? When an ad agency or media buyer places a large order, they get a 15 percent discount. This is called the “agency rate.” It is standard practice in advertising to give an agency the reduced agency rate. Beyond that, media reps know the players, the inventory, and the needs of the different media sources, and as such are able to use that knowledge to your benefit. In the right circumstances, media buyers can save you a lot of money.
If you decide to buy media yourself, know that a great trick is that you can still ask for the 15 percent reduced agency rate. They will give it to you, maybe reluctantly, but they will. Whether you can get them to reduce it beyond 15 percent is up to you, but know this too: There is usually at least another 15 percent “cushion” built into the rate card. Thus, getting 30 percent knocked off the rate card is not out of the question.
Another way to reduce the rate card rate is to ask for the “local” or “retail” rate; ask your ad rep if they have a reduced rate for local small businesses. Many do.
Whole books are written on effective negotiating, and so I cannot get into all possible techniques here. Suffice it to say that sometimes it works to be a bit outrageous and unreasonable sometimes. No, you do not have to be a jerk, but you can ask for the stars. Who knows, you just may end up getting the moon.
Today’s tip: Aside from the rate card, there are some other things that are negotiable when purchasing ads: