In the US, the TV networks are trying to avoid cutting prime time prices, but this put the power in the buyers’ hands and they are resisting price increases and demanding lower rates. As a result of this situation, advertising rates have fallen to artificially low levels.
“Costs have gone up dramatically in the last year,” said Steven Florio, president and chief executive at CondÊ Nast Publications in New York. “On the other hand, if we passed all those costs on to the advertisers, we wouldn’t sell much advertising.” Consequently, CondÊ Nast is raising ad rates by 4% for 2002, compared with an 8% increase in 2001. The increase is “fair for us as a company,” Florio said, “and fair – and marketable – to the advertising community.”
Some magazines, including Forbes, have decided against raising rates altogether in preparation for another challenging year; others that have enjoyed significant rises in readership have capitalised on this less than they might, instigated just modest rates rises.
At The New Yorker ad rates are going up 10.5%. “I don’t think anyone can say going into 2002 they’re feeling very bullish,” said David Carey, vice president and publisher at the paper. “It’s going to be a tough six months.”
Before 11 September, ad pages at The New Yorker were down about 3.5% compared to the previous year. However, since the attacks Carey says they have “given a fair amount back because travel and retail [two ad categories hit particularly hard by recent consumer anxieties] are the drivers in the fourth quarter.” He went on to speculate that newspaper would end 2001 with a decline in ad pages of around 12%, compared to 2000.
