Magazine Advertising - Trade Secrets
http://www.studio1productions.com

For updated information on Magazine advertising, please read our new FREE guide to producing Special Interest Videos.

In this report, we hope to enlighten you to some of the secrets to magazine advertising. This report is made up of questions that we have been asked over the years marketing various Special Interest Videos.

How to Determine the True Circulation of a Magazine

When trying to market your SIV tape, most of us turn to magazine advertising. Magazine ads can be very expensive, so the first thing you need to know is how many people does the magazine reach. After all, you want to make sure you are spending your money with the right magazine.

Now, some of you might be thinking that all you have to do is call the publisher and they will tell us how many people the magazine reaches, right? Wrong! The magazine will most likely quote you a readership figure, but they may not even print that many magazines! There is a game that is played in the magazine world and it has to do with the readership numbers or distribution numbers.

For example, a magazine may tell you that your ad is going to reach over 70,000 readers, but they only print 35,000 magazines each month and 10,000 of those magazine go to dealers or newsstands for sale. That leave only 25,000 subscribers, but remember, your ad is going to reach 70,000 readers. Well, maybe not.....

Now, you are probably a little puzzled on how you are going to reach all 70,000 readers, when they only print 35,000 copies. It doesn't make sense, does it? This is because, some magazines base their figures on what they call a pass along rate. This is where the magazine publishers feels you will pass the magazine on to someone else once you have finished with it or if the magazine is going to an office, then they will count a few more readers to that one issue, since it is going to be seen by other people in the office. Also, if the magazine is going to a library, they will count that as several readers. These are just a few of the ways they add in the number of readers to their magazine to get their readership numbers up.

Have you ever filled out a reader response card? On some of them, they will ask you how many people are in your office. If fill out this box, then that is how many people they will say is reading this magazine. Clever little trick, isn't it. This is very true of magazines that are primarily sent to businesses.

Other magazines will give you distribution figures instead of readership figures. The distribution figures are how many copies of the magazine are sent out each month. But, you still have to be careful with the distribution figures. I know of a magazine that sends out complimentary subscriptions to institutions and businesses to help boost the number of magazines that are distributed each month. Some of these institutions are prisons, school libraries, mental health hospitals, nursing homes, etc. While it is fine that they are sending free copies to these places, however, these copies are not reaching your target market. After all, not too many prisoners are going to be placing orders from the advertisers. Relying on only distribution figures may not give you a clear picture of the readers that will be seeing your ad.

As you can see, there are lots of ways the magazines can fudge their numbers. When you run an ad in a magazine, you really need to know how many of these people are qualified readers. I have found that the reader that has paid money for a subscription to receive the magazine is the qualified reader. That's why I recommend to only look at the number of paid subscribers.

If you ever come across a magazine that will only quote the readership figure or the distribution figure for the magazine, ask if they are ABC (Audit Bureau of Circulation) audited. If they are, ask for the most recent copy. This will give you a lot of information about the magazines sales, including the number of paid subscribers.

If they are not ABC audited, there is another way to find out the number of paid subscribers. At the end of the year, most magazines have to publish a "Statement Of Ownership, Management and Circulation". This is required with magazines that are mailed out second class mail. They print this statement once a year and it can generally be found in the November, December or January issue of the magazine. Don't expect this statement to jump out and grab you. It is most likely going to be buried someplace in the back of the magazine, with very small print, so you are going to have to look hard for it. In some cases they may reprint a reduced copy of the actual postal statement, which will make it easier to read.

So what does this Statement Of Circulation tell you? In the statement they will list, Paid and/or Requested Subscriptions, Sales through Dealers or Newsstands, Free Distribution, Left Over Copies, and Returns From Dealers and Newsstands.

These are the real numbers. When I personally place an ad in a magazine, I look at ONLY the number of subscriptions. I don't bother with the Sales through Dealers or Newsstands. The reason is, some Dealers won't send back the copies that didn't sell. Instead, they may resell them to a magazine shop that buy back issues. We have a magazine shop like that around Harrisburg. You will find back issues to magazines that are anywhere from 10% to 80% off the cover price and some of them are up to 18 months old. Most people that purchase old magazines are buying them for the articles, not to see what's new from the advertisers.

You might be asking, why don't they just send the magazines back and get credit for them. Well, it really depends on the distribution agreement that they have with the magazine. Some magazines are sold at a lower price to the dealer, if the dealer agrees to keep all unsold issues. For example, the magazine may have a cover price of $3.95. The dealer may pay $1.50 per issue on the agreement that there is no return privilege if he can't sell all of the issues that month. On the other hand, the dealer may pay $2.95 per issue and then have the right to return the unsold copies for credit. Some magazine publishers don't want returned copies from dealers, as it lowers the total number of magazines that were distributed for that month and that lowers their overall distribution figures. Since I really don't know how many copies from dealers are really making it to customer hands, I don't count those sales.

If they are a small magazine or a newsletter and they are not putting stamps on each issue, then they had to fill out a form for the post office in order to mail with a bulk postage permit. This will be their paid postal receipt stating how many pieces were mailed and it should be stamped by the post office.

Back when we were selling the SIV tape for the Tandy 1000 owners, we ran an ad in a small magazine that was geared towards 1000 owners. In a letter the magazine sent to me, they stated, "we have over 4800 subscribers". We ran a half page ad in the magazine for 4 months. Our sales were terrible, however, in other magazines, such as PCM magazine, our sales were great. I called the magazine's publisher and asked him exactly how many subscribers he had to the magazine. This time he claimed over 7,000 readers. I asked him how many of the readers were subscribers. Well, for the next few minutes I got the run around. I then asked him point blank, for a copy of the paid postal receipt that he has to fill out when mailing the magazine out first class bulk mail. He said that he didn't have to fill one out. At that point I knew he was lying. I called the post office where he had the first class bulk permit from and asked them if he was filing a form 3600-R each time he was mailing out the magazine. They confirmed that he did. I called the publisher back and told him that post office had them on file and I informed him that I wanted to see a copy.

To make a long story short, about two weeks went by and I received a copy that was stamped by the post office, to verify it was real. It showed he was only mailing out 524 copies each month. He had committed fraud, by stating in the letter that he had over 4800 subscribers, when in reality he had only 524. Needless to say, we received 12 months of free advertising. After that we pulled our ad.

It's important for you to make sure your ad is really published. Don't rely on just a tear sheet. (A tear sheet is where the magazine sends you a copy of the ad, that they have ripped out of an issue.) Ask for a copy of the entire magazine, this way you can see where your ad was placed in relation to the article content. Most publishers do this automatically. If they won't send you the entire issue, be careful about advertising with them. Back in the mid 80's, there were computer magazines popping up everywhere. For that matter, so were computer companies. Some of these magazines were nothing but advertising scams. They would line up advertisers, print only a tear sheet and mail the pages out to the advertisers. They never printed any magazine and the advertising was never seen by any potential readers. Bottom line, the advertisers where ripped off. These fake magazine companies would close up after a few months, and move to another town and open under a different name. This problem with the fake computer magazines doesn't happen often, in fact it is rare in most industries. However, it is something that everyone should be aware of.

IIf a publisher contacts you to advertise in their magazine, and you have never heard of them, ask them send you 4 to 6 back issues before you advertise with them. Check out the magazine before you sign up and run an ad. You may even want to start with a small ad to see if you get any response. When placing ads in magazines, be careful of the publisher or ad representatives claims without written proof like we described above. You could be paying for a very expensive ad, that really isn't reaching all the people that the magazine claims.

Media Kits

Whenever you contact a magazine about advertising make sure you ask them to send you a media kit. The information you can gain from a media kit can be very valuable and it can give you some insight into the type of people who read that particular magazine. br />
A Media Kit will generally include:
1) A sample issue of the magazine.
2) A rate card - explaining the advertising rates, allowable discounts, positioning, etc.
3) Advertising specifications - listing the dimensions for the different ad sizes, what is needed for black and white and color photographs, what material is camera ready, etc.
4) Circulation information - Depending on the magazine this maybe nothing more than a cover letter stating the number of "readers". With most magazines this information will be a little more detailed. You will find demographics on the readers and other statistical information.

Here is an example of statics from a video magazine:

VVideo Camera     Currently Use     Plan to Buy
S-VHS                     40%                 22%
Hi-8                         31%                 15%
VHS/VHS-C             17%                 10%
8mm                        12%                 11%

Animation
3D Animation             12%                 15%
3D Modeling               10%                 14%
2D Animation                6%                 3%

And so on....... br />
As you can see this information can be very useful. It allows you to get a profile on the type of people that read this magazine and where their interests are in relation to your product. Sometimes they will go as far as listing the income brackets for the readers or the amount of money they spend towards their interests.

As an example, we will say this magazine has a subscription base of 100,000 and you are thinking about running an ad in this magazine for a video on 2D Animation. Using the above information, there are only 9% or 9,000 readers of this magazine that are interested in 2D Animation. Depending on the rates, you might do better finding another magazine that specialized in Animation. If you are dead set on advertising with them, another possibility is when the ad rep calls, you can always use their own statistics to work out a lower ad rate, since their magazine doesn't hit a lot people with an interest in 2D Animation.

TThis has worked very successfully for us when we were advertising in computer magazines that didn't really cater to the Tandy owner. According to their own statistics only 10% of the readers were Tandy owners. We used this information to lower our advertising rate by nearly half. I do want to point out that there were a few magazines, that would not budge on their rates. In these magazines we either ran a small classified ad or no ads at all.

Advertising in Newsletters

Advertising in a newsletter can work well, especially in niche markets. It can sometimes reach potential customers easier, as most people who subscribe to a newsletter usually read the whole thing, unlike a magazine. But, display ads may not always be the most cost effective way to advertise in a newsletter. br />
There are some newsletters that will charge you only a few dollars for a half page ad. While others will charge you an outrageous price. For example, one computer newsletter that we ran in charged only $20 for a half page ad. It was mailed out to just under 500 people. Our feeling was, we couldn't reach 500 people using direct mail for only $20, so this was a bargain.

Another newsletter which we looked into, when out to around 1200 people wanted to charge us $495 for a half page ad. We felt this was way too expensive to reach just 1200 people. After all we could have sent a post card to 1200 people for a lot less than $495. Needless to say, it was not cost effective to run a display ad with them. We did, however, run a classified ad which did very well. We also found that some of the smaller computer magazines that reached 15,000 to 20,000 people were only charging between $500 to $600 for a half page ad at that time.

Please keep this in mind, advertising rates in newsletters vary greatly. From dealing with different newsletter publishers, some feel that their ad rates have to be in line with what the big magazines are charging. This is fine for them, but as an advertiser you have to watch how you spend your advertising dollars. You want to reach the most people you can with each advertising dollar spent.

As a side note, most of the newsletters that had the higher advertising rates, had very few advertisers. Where the newsletters with the lower ad rates, had lots of advertisers and this seemed to add value to the newsletter in most peoples opinion.

WWe ran several tests in newsletters using both display ads and classified ads. Each ad had a different phone number for people to call on. In most cases, sales were better from the classified ad. We found that with most newsletters, people read the classified ads more so than in a regular magazine. You will need to do some testing on your own in the markets that you are producing your video for. But, whatever you do, don't overlook the classified ads.

Tracking Your Sales

One of the most single important things you can do for marketing analysis is to ask the customer this following question. "What magazine did you see our ad in?" Then write it down, keep it in a log or track it with your computer software. This information is vital, as you are going to want to know which magazine is pulling the best for you and which ones are you losing money in. I have talked with too many people who don't track where their sales are coming from and they haven't the foggiest idea which ad or magazine is pulling the best response. They're just happy they are making money and selling tapes. br />
By tracking all of our sales, at the end of the day, week, month or year, I can tell you exactly which source of advertising (including which magazine, internet, mailings, referrals, repeat sales, etc.) are generating sales and how many sales from each source. Armed with this information I know exactly where to spend my marketing money and where not to.

(NOTE: We have been asked many times about our software package that we are using to run the business with. It is a custom package that I wrote. At this time it is not for sale, but who knows, maybe down the road it will be.)

Some books I've read and people I've talked to say, advertise everywhere. If the customer sees your ads everywhere, it will increase their chances of buying from you. However, from our own personal experience from owning a computer company and from owning Studio 1, I can tell you that's not always true. If you are running ads that are advertising a product that is sold through distribution or resellers, then yes that works. But, if your ads are selling a product direct, such as your video tapes, it doesn't always work. Now some of you may say, "you'll make money on the backend, when they customer comes back and buys more products from you." Yes, that is true. However, the software we use to run our business has taught us a few things. Not only does it allow us to track the total amount of sales that each customer has made, it also allows us to track the profit off of each sale and the source of the customer. When you look at all of the data together it, well just check out this next example.

After running an ad in a computer magazine for 6 months we looked at the number of sales, the profit from the sales, the number of times the customer came back to us as a repeat sale and the total cost of running the ad for 6 months. Here are the numbers for a half page ad that we ran in one of the smaller computers magazines.

6 months x $1245 per ad = $7470 total ad cost
Total sales from this ad was 116
Total profit from the video x $33.65
----------------------------------------
Total profit made $3903.34

Repeat sales 70
Total profit from repeats $33.65
----------------------------------------
Total profit on repeats $2355.50

Grand total of profit made from this magazine was $6258.84
With an ad cost of $7470.00
------------------------------------------------------------------
We lost a total of - $1211.16

Since this magazine did sell tapes we didn't pull the ad all together, but we did reduce the size of the ad from a half page to a 1/6 page and ran for 6 more months. Here are the numbers for the 1/6 page ad.

6 months x $420 per ad = $2610 total ad cost
Total sales from this ad was 87
Total profit from the video x $33.65
----------------------------------------
Total profit made $2927.55

Repeat sales 60
Total profit from repeats $33.65
----------------------------------------
Total profit on repeats $2019.00

Grand total of profit made from this magazine was $4946.55
With an ad cost of $2610.00
------------------------------------------------------------------
We made a small profit of $2336.55

In the above example, the magazine had a very small circulation of somewhere around 10,000 to 12,000 people. Their ad costs vs their circulation was high. In another computer magazine back then, we were paying about $825 for a half page ad in magazines with a paid subscriber base of 80,000 people. (These rates are from several years ago) This ad was pulling upwards towards 100 orders per month, with around 600 orders for a 6 month period.

All of the above examples were based on only 1 tape. As we added more videos to our line, overall tapes sales went up. The first magazine where we had lost money during the first six months, really started to make money when we added 3 more tapes to our line. The half page ad stayed the same price, but we were now selling 300 tapes in a 6 month period, which allowed us to make a profit on the front end and the backend.

HHad we not been tracking our sales so closely we would have never known if we were making money on the ad. Since we were, it allowed us to adjust our ad size to make the ad more profitable for us. After all that's the name of the game, to produce a profit and to build a business.

Choosing the Correct Ad Size

As you saw in the above example, when we reduced our ad size from a half page to a 1/6 page, sales didn't drop too much. The cost of the ad sure did. You may find that if you are the only one advertising a video on a particular subject in a magazine that a small ad may work well. Whatever you do, start small and let the ad size grow. Don't jump in with a single video and take a full page ad, unless the ad space is very cheap.

People are very different and so are their perceptions of a company advertising a product. Some people will only purchase from someone with a large ad size, as it gives them more confidence in the company or product. We have found that this isn't always the case when selling a video tape or a series of videos. Some of our best ads were 1/3 page vertical ads that listed all of our videos. Depending on the market and the number of videos that we are offering, we will usually run anywhere from a 1/6 page to a 1/2 page ad. Whatever you do, don't let the advertising rep "help" determine the best ad size. They will most likely try to put you into a larger ad than what is really needed.

Track your sales so you can monitor the number of sales to the size of the ad. In some magazines you will find that a 1/4 page ad will pull just as well as a 1/2 page ad. It all depends on the market. When you test the size of the ad, let it run for at least 3 months. This will give you enough time to determine if the increase in size is working.

The exception to this is, if you are adding another video to your line and you need more space in order to sell the video. Then you have no choice, but to increase your ad size.

You may want to start with a classified ad or a small 1 or 2 inch display ad in the classified section. As sales come in, increase the ad size for more visibility. Not everyone will have luck selling in the classified section, so don't be discouraged if your video doesn't sell there. Other SIV producers have told us that in some magazines they did great in the classified sections, while the same tape in another magazine's classified section did poorly. If this happens, try a small display ad for a few months.

Classified ads are great for a two step sales approach. This is where you offer some free information or a free report on what your video covers. In some markets this approach works better than trying to sell the video directly from the ad. Look at the classifieds in the magazine and see if other people are selling directly from the ad or if they are using a two step approach. You may want to follow their lead and do what they are doing.

Whether classified ads work well in a particular magazine is largely dependent on the type of reader who reads the magazine. In our experience, some magazines that cater towards the do-it yourself type of person, classifieds worked very well. In the magazines that were geared towards professional people, the classifieds didn't seem to have the draw. Display ads worked best in those situations. Whatever you do, don't be afraid to try classified ads.

IIn the Special Interest Video Business Kit you'll find a small report titled "The Secret to Placing Classified Ads All Over America for as Little as $0.51 Each". For those of you who will be placing ads in newspapers for your video, this is an excellent and cost effective way to market your video.

Ad Placement.

Where should your ad be placed? In the front, middle or back of the magazine? Does it really matter? Yes, ad placement in some magazines can be very important. br />
When you place a display ad you can sometimes request certain positioning of the ad. For example, you may request the ad be place on the right page, outside edge, near the front of the magazine. Depending on the publication, you may or may not get what you want. Most magazines will charge extra for positioning an ad, usually between 10 and 20% of the ad cost. Some magazines may have restrictions on the ad size in the front of the magazine. We ran into this once, only full page, 4 color ads were allowed in the first 40 pages of the magazine. The smaller the ads got placed towards the back of the magazine.

Ads that are placed next to text generally tend to pull better. The reason behind this thinking is, while the reader spends time on the page reading the text, they are more likely to glance over at the ad that is next to it. You need to make sure you have a good strong and interesting headline. Once your ad has their attention, you want them to read the rest of the ad. Ads that are 1/3, 1/2 and 2/3 page in size are usually the only ad on the page and will be placed next to text. (Although this may vary from magazine to magazine.)

Some magazines will block the ads to certain sections of the magazine. For example, in some photography magazines, the manufacturers almost always seem to be up front in the magazine, but the dealers that are selling the equipment are located in the back of the magazine. This really isn't a problem in this type of magazine, as most readers know this and when they want to purchase a camera or another piece of equipment, they will head straight to the back of the magazine to find the dealers. If the magazine you are advertising in is laid out like this, then you might do better in the back of the magazine. But, what about the ad getting lost among all the other ads in the back? It may get lost to a point, so you will have to make your ad stands out among the rest by using bold headline or reverse print. (Black background with white letters for the headline) Remember, if the average reader goes to the back of the magazine to look for products to buy, then chances are they will read or glance over all of the ads in their search.

There is a section in some magazines that is made up of all ads. This area is usually a "Market Place Section". Sometimes the ads are all the same size or they may be a variety of sizes. The "Market Place Section" is usually near the back of the magazine and this section will most likely have a lower ad cost than a regular display ad. When talking with different SIV producers, most of the SIV producers said they did quite well in the "Market Place Section", as they felt most readers would stop and look over this section to see what is new. There were a few that didn't like advertising in this section, as they felt their ad was not being seen. It was getting lost among all the other ads. The key to advertising in this section is to make the ad really stand out. See how much extra it is to add a single color, such as red to the ad. Using red in the headline or the border will make the ad stand out among the other ads. This has worked for us, when we advertise in the "Market Place Section" of a magazine.

IIf the magazine has ads all throughout that are selling directly to reader, try to have the ad placed next to an article or a regular column. We have found that ads that are placed in certain sections like product reviews, don't always pull as well as they do when placed next to an article. This is due to the fact that not everyone reads the product review sections, but most people read the articles and regular columns.

Ad Costs

There are several ways to reduce your advertising cost. br />
1. Ask for an in-house agency discount. This is usually a 10 to 15% discount off the published advertising rates. You will need to submit your own camera ready art work. Most magazines will accept an ad printed with a laser printer or ink jet printer as camera ready.

2. A frequency discount. This is where you agree to run an ad for so many times. For example, you want to run a 1/6 page ad for your video in a magazine, you may find the rates listed like this:

1 Time rate $100
3 Time rate $90
6 Time rate $80
12 Time rate $70

As you can see, the more time you commit to running your ad, the lower the ad cost.

3. Direct Rates or Mail Order Rates. Companies dealing directly with the public and not through resellers are considered a mail order or direct sales company. Some magazines will a have discount rate for this type of advertiser. Make sure you ask the ad rep at the magazine if they offer any special rates to direct sales companies or mail order companies.

4. If you are a new advertiser, see if the magazine has any type of new advertiser discount. This has worked for us, we have received a 12 time rate on a 3 time contract. This allowed us to see if the magazine would pull for us. At the end of the 3 time run, we went on to commit to a 12 time contract.

5. Negotiate the rates. We have talked with other SIV producers who have been able to negotiate better rates than what are printed on the rate card. This all depends on the market place and if there are competing magazines.

WWe wish you good luck and prosperity in your magazine advertising efforts. I hope that we have enlightened you to some of the secrets of magazine advertising. It is important for you to keep in mind that different markets and different magazines will produce various results. If what you are doing isn't working, then don't be afraid to try something different. We weren't and we succeeded where other thought we should have failed.

For updated information on Magazine advertising, please read our new FREE guide to producing Special Interest Videos.