Do this right, and you’ll be set up for success, but do this wrong, and you will be in a world of hurt.
The easiest way to figure out what you should be charging advertisers for an ad in your program book is to work backwards. What I mean by working backwards is to first look at all of your costs for the program book. This includes hidden costs that a lot of performing arts organizations tend to overlook. Also, it is worth mentioning, even though this is a labor intensive task, it needs to be looked at every season before you start selling your program book advertising. The obvious reason for this is printing prices will change, wages will change, rents will change, etc. But once you get your first template set up for this, the following years will be a lot quicker because you can then just plug in the new numbers.
Here is what we look at every time we bring on a new client, or before we start the new season’s program book advertising sales campaign:
- Commissions and/or salary for your salesperson(s).
- Time & wages allocated towards the layout and design of your program book.
- Time & wages allocated towards the layout and design of your customer ads.
- Time & wages allocated towards chasing the customers artwork and ad copy
- Time & wages for program book advertiser account receivables.
- Pre-press and print cost (note: some printer’s will charge separately for pre-press time, others will have this included in the total cost.)
- Fixed cost allocation
As one can see, there is a lot more involved than just your print costs. Unfortunately we see performing arts organizations using only print cost to price their program book advertising all the time.
After you get all of these costs, figure out what your margin needs to be on your program books. This will take some figuring out because if you make this too high, you will find out real quickly that no one will buy your ads because they are too expensive. Set your margin too low, and you’ll really have to think about whether or not keeping your program book publishing in-house is really worth the whole headache.
Once you have these numbers, take your total costs plus your target margin and then divide that by the number of ad inventory pages only. It is important to note, that you need to exclude pages that will be dedicated to sponsor ads and trade ads.
This number will give you the rate for a full page black and white ad.
Once this rate is established for a full page black and white ad, divide this number by two to get a rate for a half page black and white ad. Then, take this number and divide it by two again to get your rate for a quarter page ad. We recommend adding an additional 5-10% onto the rate for your half page and quarter page ads. The reason for this is because it gives the advertiser an incentive for buying a larger ad. If you offer color ads, you can use that same 5-10% premium for color. Remember, your full page black and white ad rate is already covering your costs, so the premium you place on color ads will go towards your margin.
Now that you have your program book ad rate card, it does not necessarily mean that it will work. A large part of the success of program book ad sales will be what the market will bear for this type of advertising. If your pricing is very high, and the market can’t bear it, then something needs to be done on the cost side (i.e. going from a magazine size to a digest size, etc.) So after you start your program book ad sales campaign, you may have to adjust accordingly. But be careful not to go so low that your margin becomes jeopardized. Good selling!