Creative pricing touted as a way for newspapers to increase advertising p. 12

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By: George Garneau

‘Big Ideas for Small Newspapers’ session at
the annual Newspaper Association of America
convention yields several other suggestions sp.

CHANGING TIMES CALL for new approaches, and J. David Tipton said it’s time that newspapers bucked tradition and created more flexible advertising prices.
For too long, said Tipton, marketing director at Nixon Newspapers Inc., newspapers have adhered slavishly to rate cards and failed to capitalize on one of their major strengths: frequency, the power to repeat a marketer’s message day after day.
At a session about small newspapers at the Newspaper Association of America convention in San Francisco this week, Tipton expanded the discussion beyond tips for making money on special sections.
He challenged newspapers to change their mindset and come up with more innovative pricing schemes.
As an example, he related how Nixon’s “creative pricing” policy was bringing in more newspaper ad revenue and more business to retail advertisers.
Nixon’s “creative pricing” offers up to 66% off if advertisers agree to run six days a week for six weeks. Advertisers get six days of coverage for about the price of two, he said.
“This gives more retailers the opportunity to use newspapers’ strength of daily frequency,” he said.
The increased spending on newspapers comes largely at the expense of competing media.
Because of widespread changes in retailing and marketing, “we need to be creative and innovative,” he said. “Flexibility is a tool you need to use.”
Tipton disputed criticism that deviating from basic rates prostitutes the value of newspaper advertising.
Instead, “creative pricing” takes the widely accepted practice of volume discounts a step further and opens a new section in the rate card.
Because newspapers traditionally treat rate cards as something akin to the Bible, “I believe newspapers have been our own worst enemy in a way,” Tipton said.
“We have not taken a page out of our best customers’ books: retailers. They have been doing this kind of thing for years.”
While it is more common to hear publishers defend the integrity of rate cards, Tipton’s admonition received some interest at a crowded 8:30 a.m. Sunday session of more than 100 publishers, at least half a dozen of whom asked for more information.
The plan is open to large and small advertisers, from Pizza Hut’s 40-inch ad with coupon to a local plumber’s one-inch ad.
Pizza Hut increased its schedule from once a week to six times at about double its weekly ad spending, Tipton said.
Both advertisers increased their business, but the plumber was forced to cancel his ad because it worked too well: He was swamped with more business than he could handle, Tipton said.
For sales representatives, the lure is a commission equal to the increased ad revenue in the sixth week of the offer.
While a change in ad rate structures might require a break with tradition, tips at the “Big Ideas for Small Newspapers” session revealed a lot of new ideas.
They included:
? Yellow pages-style business directories at Nixon papers. Ranging from 24 to 80 pages, they effectively take $60,000 to $100,000 in ad revenues out of the market.
“We hit some nerves with the phone companies,” Tipton said. “You can fight them.”
? In an arrangement with a florist, the Marin Independent Journal, Novato, Calif., offered $30 National Secretaries Day classified ads that included a hand-delivered rose. It generated $1,500 and helped an advertiser, said Phyllis Pfeiffer, president and publisher of the paper.
? The Independent Journal also created a “For Sale by Owner” category that has grown to fill a double-truck slot in real estate classifieds. Real estate agents weren’t thrilled, but homeowners pay higher rates.
? Beth Clark of the Corvallis (Ore.) Gazette-Times told of its Baby Book, distributed through hospitals to all new mothers. Advertisers pay per baby. About 3,800 are born a year, for a total of $30,000 to $50,000 in revenue a year.
Similarly, a Guide to Corvallis is distributed to people who call the local visitors’ bureau and generates similar revenues.
The paper compiles a weekly summary of Oregon State University sports coverage and mails it to fans for $30 a year. It also publishes a monthly magazine delivered to upper-income homes via alternate delivery service in plastic bags.

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