How to Start a Magazine - Ad Pricing

[Keyare]

Here's a method of pricing ads that I use when starting a magazine.
D-Zine is thinking of starting a magazine so I thought I'd post it here maybe to help her out and anyone else who might be starting one up.



#1) Printing: Get a rough price on the printing of the magazine and what you think future expansions will cost you, because hopefully you will grow. Example: 5000 copies of a 32 page magazinemight cost $1000 to print. That's with 2 colours on the front/back centre spread. That's your worst case scenario - you might add pages or go full colour or add spot colour - but you'll never go below this.



#2) Distribution: Price out at least two methods of distribution. Take the prices of the higher one because sometimes deadlines or holidays or bad service will force you to go with a backup plan. Let's say $200 through a special free distributor up to $600 for ad-mail. We'll go with $600 for now.



#3) Wages: What is your staff going to cost? Think salaries and not per-hour. Lets say Two part time helpersat 1500 a month. Plus what do YOU want to make? I want to make at least $4000 a month - don't you? This is where you decide that your'e in this for money or fun. Trust me, it's not all fun so theheadaches you'r going to encounterhad better be worth it.



So we have:



Printing: 1000
Dist: 600
Wages:6000



That's $7600 you NEED to make to break even. Don't think you can sacrifice your own wages because you might want to sell the company one day and you HAVE to show that it's paying realistic wages.



So round it up to $8000 per issue to cover transportation, office supplies and maybe some rent (because at this levl you really don't need much office space)



#4) Ad-to-Editorial ratio: How much space do you have to sell? Let's say 50/50. You can sell half of each page. That's a lot of ads, but look at the biggest mags out there - there's a Ton that run higher ratios than that! So you have 16 pages you can sell. So - bottom line, you can sell a full page for $500. That's your WORST-CASE SCENARIO.



#5) Does this cover my added distribution charges (weight) and printing if I go up to 48 pages? Yup. : : )



#6) Gravy: If you are going to charge extra for design - then do so, but you will make more money if you include it. Here's how: It takes just as long to design a 1/16 page ad as a full page sometimes, so you have to build it into the price. Assume the worst - that some twerp is going to completely redesign their 1/16 pages ad every month and wast an hour of your time. These little ads are easier to sell, but also take up more of an ad-reps time. So right off the bat charge an extra $30 bucks for being a pinhead and running a 1/16th page ad. That should cover half an hour of a designers time and the headaches your ad-rep will have. So our rates are like this:



BASE Full page: $500 SELL FOR:$500
BASE Half page: $250
BASE Quarter: $124
BASE Eighth: $62
BASE 16th: $31 SELL FOR: $60



Take a spreadsheet and do some wild percentage calculations and you'll have a sliding scale that will go something like this:



Full page: $500
Half Page: $375
Quarter: $218
Eighth: $117
Sixteenth: $60



NOW! If your ad reps sell nothing but sixteenth page ad because they work really hard but don't get the big sales - You're doing just fine because you're making $16000 per issue instead of $8000. Well worth the headaches isn't it? And no added expense.Unless you put your reps on commission, you can now afford a 15% commission on all ad sales above their salary. You'r still doing fine.



"But we're not making gravy on the big ads now?!" Right. Full page ads are the backbone of your company. Most of them will come camera ready anyway - that's just the nature of things. You can afford to sell those big ads at your base rate because you don't have to move any copy around - you just have to find an empty page. Plus, most of them will repeat anyway!



#7) Choice positions: Back page and inside front cover. Because the back page is the best position and usually has colour - you can charge twice as much. It's up to you - it's your gravy. Same with the inside front, but without the colour option.



#8) Additional Color: See what a plate/film andink mixcharge is to add a colour to one flat in the run. Don't mark this up much at all because this is going to be your base rate for what you charge for an added colour. It covers your cost. BUT! You can sell that colour AGAIN now on three other pages in the magazine because they are on the same flat and it won't cost you a thing- Charge for it - don't give it away because it was your smartypants idea to make a couple extra bucks in the first place.








Post Edited By Moderator (D-Zine) : 1/30/2005 3:17:32 AM GMT

[D-Zine]

Keyare......I must say....you are awesome for giving me this information...and anyone else who needs it! Some of the things you mention here, we do where I work now and I only know that from being there soooo long but you have helped me alot with this so that I can see all the ways I can make a profit. Some things that hadn't even occurred to me until I read your info here! It is bookmarked and I will be referring back to it! Thank youVERY much for taking the time to write it all out for me! Again...yer awesome! Tweek is a lucky puppy...haha <img border="0" src= "smileys/smiley2.gif">

<img border="0" src= "http://coastalcarousel.com/GDF/mataSIG.jpg">



Who says doodling isn't constructive?!

[Ryan8720]

This should go in Resources with something like How to start a Magazine as the title.

http://<img border="0" src= " http:/...rg/ryan2.gif">



If life gives you lemons, give them back.



It is better to be pissed off than pissed on.

[Kool]

Great info Key, I feel like I want to go and start a magazine.

<img border="0" src= "http://home.comcast.net/~rnick9/sig.jpg">

"I used to be with it. But then they changed what it was. Now what I'm with isn't it, and what's it seems weird and scary to me." Abraham Simpson

[D-Zine]

This is still some really great info!

I had it bookmarked on my desktop computer but I had taken that down and wiped it clean and realized that I didn't have it bookmarked on my new laptop! I spent a good hour looking for the thread again last night and FINALLY found it...so I decided to take Ryan's advice from above and move it to the resource section - bc hey its DAMN resourceful and also to pin it at the top.
It will never be lost again - YAY!!

Thanks again Key -

Power to the Oldschoolers

[morea]

nice! neuro and I have been talking about something similar. You guys are the best... your advice is invaluable.

Power to the Old Schoolers! and btw, if you can't say something nice, shut the hell up.

Nice Key! I'm starting a dry hump magazine. It will be dedicated to, well dry humping.

Graphic Design Heroes! Call me Captain Type Caster. I’ve fought off “The Evil Cosmic Sans” for year but it seems “Dr. Extreme Untalent” keeps bringing him back. I must find a way to defeat this evil creature.

Capt. Creative bring me those comps…

[jaarjohnson]

this is terriffic cuz i'm wanting to start a magazine myself..have a target audience of a few thousand to start with, and i'm working my way up from there...but ad pricing is my dumb zone...what are you calculating exactly to get up to $16k per issue from just selling 16th ads...what specifically are you using to calculate?

[Keyare]

16 ads on a page at $60 each is $960 per page.
Your magazine is 32 pages, roughly half of which is Advertising, the rest is editorial.

$960x16=$15,360.00

Pretty close eh?

Throw on a back page ad or increase your ratio to 17 pages and you'r over $16,000.00

Of course, you wouldn't REALLY want to sell ALL 16th pages. It would look like a classifieds rag and be a lot more time involved in creation.

[Image]

5000 32 page mags cost 1000 bucks? WHAT? 160,000 sides, coallated, folded and saddle stitched, packaged, that can't be gangrun? WHAT?

Assuming your cover is full color on both sides, which would be way cheaper because it can be run on a 4 color offset gangrun press, it alone would run like 800 wholesale, which you can't buy unless you're a print broker and have a resell number that says so.