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.’
