Thursday, September 13, 2007

On the New York Times discount to

If you hadn't heard, the New York Post reports that the New York Times gave a pretty big discount to for its full page ad disparaging General Petraeus.

The New York Times dramatically slashed its normal rates for a full-page advertisement for's ad questioning the integrity of Gen. David Petraeus, the commander of U.S. forces in Iraq.
According to Abbe Serphos, director of public relations for the Times, "the open rate for an ad of that size and type is $181,692."

A spokesman for confirmed to The Post that the liberal activist group had paid only $65,000 for the ad - a reduction of more than $116,000 from the stated rate.

A Post reporter who called the Times advertising department yesterday without identifying himself was quoted a price of $167,000 for a full-page black-and-white ad on a Monday.

Before we get ourselves too worked up over this, it should be known that display (not classified) ad sales reps typically have leeway in the prices they charge for ads. Some have the independence to do whatever they need to do to get an ad, some have to get approval for big discounts, but most do have the flexibility to discount. Call it media ad sales' dirty little secret. Price flexibility (i.e. discounting) is used for any number of reasons-a publication or rep may want to bring in a new customer that they see doing a large dollar volume of business over time. The rep or the publication might need to bring in last minute funds to meet a budget. The customer might already be a good customer that is doing an extra buy. The ad might be part of a larger "package" of advertising a customer has agreed to in exchanged for preferential pricing. An ad may have fallen out at the last second and the space needs to be filled. Finally, the rep in question might just be bad at meeting price objections and caves into discounting pressures easily.

This discounting flexibility is not without its problems for media. Most publications are really planned for ads to sell very near the published price, and it is in most reps interest to do so. In some segments of media, there has been horrible price erosion for ads because of discounting and predatory competitive discounting. This leads to some publications having little choice but to discount, sometimes significantly, in order to meet the budgets. In some segments, published prices have almost no meaning anymore. Yes, if someone calls out of the blue and asks for the price of an ad, they are going to be quoted published prices. But if there is any price erosion in that market at all, that first price is little more than the beginning point of negotiations.

I don't know the situation that ad reps for the New York Times are specifically facing. For all I know, this was a good ol' boy discount. I doubt that it is, though, because in most cases the higher ups aren't aware of the price of an ad until long after it is on the books and the ad is published. Some forms of print media are brutal ad markets right now, and I suspect the newspaper business is one of them. With the advent of internet advertising, some print mediums like papers are facing even more pricing pressure. I would think the New York Post is very aware of that, and I'm more than a little surprised that they launched this volley because I'm sure that a look at their books will show more than a few heavily discounted ads, too.

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