One of the most important parts of a successful program book is your advertising pricing strategy. Set these too low, and you will be certain to lose money, but set them too high, and you will be certain to lose advertisers. Both of these scenarios are bad scenarios for your program book.
Below, is a brief discussion on why setting your program book ad prices too high is not a good pricing strategy.
More costly specifications become higher prices to the advertiser.
At Onstage Publications, we have seen this repeatedly with performing arts organizations. The thinking goes “if we produce a super high end program book, we can charge more for the ads.” But the danger in this is that higher advertising prices adversely affect the ability to sell, and can adversely impact your performing arts organizations image in the business community.
Alternatively, a number of performing arts organizations will subsidize with money outlays of their own to enlarge or upgrade their program book publication, which then becomes a direct cost to the performing arts organization.
Program Book Advertising Rates are Highly Price Sensitive with the Buyer
Onstage Publications engineers its costs and rates to be as low as possible for the advertisers in the community. The reason for this is price sensitivity. In economic terminology, advertising prices for performing arts program books tend to be highly elastic. As prices rise, the willingness of advertisers to purchase falls sharply.
Is it possible to publish a program book with a small number of advertisers? It can work as a one-time event on a special occasion, but in terms of long-term relationships and community good will, we strongly recommend against it, for the following reasons.
The vicious cycle of elevated prices
- Exodus #1 in year 1: Smaller foundation of advertisers who pay more: A jump in prices will lead to a transformation of the advertiser base from broad to a much narrower group. The smaller group may agree to pay significantly more per ad, but good will is affected as well.
- Exodus #2 in year 2: The loss of the “virtuous cycle” of competition within your program book publication: national and regional sales (from adjacent communities, throughout the region) can constitute as much as 15% of the revenue base in your program book. These non-local advertisers—who are in pursuit of your “out-of-town patrons”—are especially sensitive to higher prices. And you need these advertisers in a special way. But in the absence of such non-local competition, your local advertisers will feel less need to be in the program book. Ads sell ads!
- Exodus #3 in year 3: Future Instability: One year after the loss of a major portion of your advertiser base, this is the fait accompli to follow. The remaining base becomes less stable, having witnessed and being influenced by the exodus of fellow advertisers the year prior.
Thus, higher program book ad prices carry dangers. They can wipe out good will in your community, drive away advertisers, destabilize the program books in the short-term, and damage the image of the your performing arts organization for the long-term.
So you need to find your “sweet spot” that allows for your performing arts organization to publish high quality, cost efficient program books for your patrons but allows for ideal program book ad pricing. By finding your “sweet spot”, you will be able to position your program books securely for the future.