1. Media Rates After finishing this section you will know:
How various media rates are set
The costs of print media
The standards for selecting promotional media

2. Media Costs
Advertising uses a set format that is defined in terms of time or space
Media costs vary greatly with the type of media and geographical location

3. Media Costs
Standard Rate and Data Service- publishes rate cards for most major media according to general categories
Audit Bureau of Circulation- print media publishers subscribe to ABC to have it verify their circulation figures
Important because advertising rates for print media are based on circulation

4. Newspaper Rates Newspaper rates- classified into two categories
Classified ad- grouped or classified into specific categories, such as help wanted, real estate, and auto sales

5. Newspaper Rates
Display ad- involve creative illustration of the product being advertised
A mix of art, photographs, headlines, copy, and logo of the product or business
Generally larger than classified ads and cost is based on the amount of space used
Quoting display ads- price per column inch- one column wide by one inch deep

6. Newspaper Rates
Run of paper rate- allows the newspaper to choose where to run an ad in the paper
Color ads run at a higher rate than those which run in black and white

7. Newspaper Rates
Open rate- a.k.a. non-contract rate, the basic charge for a minimum amount of advertising space
Open rate varies depending upon when the ad will appear in the paper
Contract rate- business who advertise regularly get a rate discounted from the open rate

8. Newspaper Rate
Bulk space contract- guarantees that a minimum number of column inches within a 12 month period
Cost per thousand (CPM)- the media cost of exposing 1,000 readers to an ad
Cost of the ad X 1,000/circulation = cost per thousand

9. Magazine Rates
Magazine rates- based on circulation, quality of readership, and production technique

10. Magazine Rates
In order to determine the cost of magazine ads, one needs to become familiar with the following terms:
Bleed- half or full page ads are printed to the very edge of the page, leaving no white border
Magazines generally charge between 15-20% more for bleeds

11. Magazine Rates Color rates- offered for color ads
Full color- four color advertisements which cost the most
Premium position- where ads are placed in the magazine on the back cover or inside the first page
Frequency discounts- advertisers who run the same ad several times during the year
The rate per issue decreases as the frequency increases

12. Magazine Rates
Commission- a percentage of sales given by the magazine to the advertising agency for placing the ad for the advertiser—typical 15%
Cash discount- offered for paying the bill earlier than its due date

13. Online Rates
Online rates- based upon the type of format the customer desires
Barter arrangements- each advertiser agrees to run banner ads for the other
Lead to more traffic for each business’s Web sites

14. Radio Rates
Radio rates- when purchasing radio time, businesses need to determine which type of advertising to use
Network radio advertising- broadcast from a studio to all affiliated radio stations throughout the country
Broadcast ads simultaneously to several markets

15. Radio Rates
National spot ratio advertising- used by national firms to advertise on a local station-by-station basis
Used to target select markets
Local radio advertising- done by a local business for its target market
Limited to a specific geographical area

16. Television Rates Television rates- vary with time of day
Class AA time- during the hours of 8 and 11 p.m.
Class A, B, C, D- lower based on diminishing viewer-ship

17. Cooperative Advertising
Cooperative advertising- a cost-sharing arrangement whereby both a supplier and a local advertiser pay for advertising

18. Promotional Budget
There are four common promotional budgeting methods:
Percentage of anticipated sales- budget is decided on a percentage of past or anticipated sales
All you can afford method- turns all monies to promotional activity only after all other company expenses are paid

19. Promotional Budget
Following the competition- the competitor’s promotional expenditures are matched or spending is planned in proportion to market share
Objective and task- the company determines goals, considers the necessary steps to meet goals, and determines the cost for these promotional activities

20. Assignment
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Reviewing Key Terms
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