ANALYSIS: NEWS ANALYSIS - Is the press stocking up now to stave off the new-year chill?/Colin Grimshaw asks if industry-wide rate hikes will really be sustainable

The Sun’s decision to raise its ad rates by 6 per cent - its first increase in three years - has caused a few raised eyebrows. The Sun’s advertising director Richard Webb argues that the move is necessary to cover cost increases, adding: ’We’re still offering the most competitive cost per thousand in the market.’

The Sun’s decision to raise its ad rates by 6 per cent - its first

increase in three years - has caused a few raised eyebrows. The Sun’s

advertising director Richard Webb argues that the move is necessary to

cover cost increases, adding: ’We’re still offering the most competitive

cost per thousand in the market.’



But other papers are catching the pre-millennium wave and making

aggressive rate hikes.



The Times and Sunday Times are implementing hefty increases,

particularly on colour positions, which are being raised by around 5 per

cent, while The Daily Telegraph will bring out a new ratecard in

January.



The Daily Mail implemented an above-inflation increase in April,

although ad director John Teal says there are no plans for a further

increase ’at the moment’. And The Mirror increased its rates in August

by 5.5 per cent, also its first rise for three years.



But will these increases result in a long-term increase in yields? Or is

it, as some media buyers insist, mere posturing?



’It’s more a declaration of intent,’ says BMP Optimum’s deputy managing

director, Tim McCloskey. ’Nobody achieves 5 or 6 per cent rate

increases.’ Theresa Coligan, managing partner of Zenith Media, is just

as sceptical.



’Every transaction is a negotiation. Strong-arm tactics to increase

rates don’t normally work.’



MediaCom TMB’s director of press buying, Steve Goodman, is in

agreement.



’It’s hard to justify rate increases when circulation is flat. Nobody

pays ratecard anyway.’



Interestingly, The Guardian, which hasn’t raised ad rates for two years

and has no immediate plans to do so, takes the same line as the media

buyers. Advertising manager Stuart Taylor says: ’Newspapers can usually

up-page, so demand doesn’t outstrip supply. Therefore, rate increases

need to be allied to added value, such as a circulation increase.’



Since most regular advertisers have long-term negotiated contracts, the

customers who will be immediately hit by these rate hikes are those who

advertise only in the pre-Christmas season. The milking of these

accounts in the frantic run-up to the millennium may be the real

objective.



Ad directors are certainly bullish. ’Demand is huge,’ says The Sun’s

Webb. ’Both display and classified volumes are bigger than ever

before.’



And Jonathan Wilson, group ad manager at The Telegraph, adds: ’The

colour market is particularly buoyant and we are struggling to get all

our advertisers in.’



But agencies are quick to pour cold water on such talk and make bleak

predictions of post-Christmas blues .



Zenith’s Coligan says: ’The pre-Christmas market last year was excellent

with Sky and ONdigital launching their digital boxes, and it’s good now,

but there’s a big question-mark over January and February.’



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