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Establishing the Digital Rate Card

Early adopters share how they’ve set value for their ad space.



By Matt Kinsman
07/27/2009

Digital editions have been positioned as a value-add for so long that first attempts at developing an advertising rate card can leave publishers at a loss.

Used Boat Watch is a bi-monthly digital edition that draws advertising from both sale listings and after-market suppliers. The magazine teamed with Boat U.S., the official publication of the Boat Owners Association, for access to its enormous e-mail list. At first, founder Ed McNew wasn’t sure how to price advertising in the digital edition, which features 100 pages. “The only thing I had heard about digital editions was you can get about 10 percent of what you can charge in print,” he said. “We decided we’d get $700 to $800 per page and maybe $1,000 in the future.”   

U.K.-based Graduate Prospects is an early adopter of digital editions and an example of a publisher actually making money from it. When deciding pricing, there are a number of issues taken into account, according to sales director Allan Brown, including:

1) The Audience—Its size and likely engagement
2) The Package—Is it stand alone or a replica of the paper?
3) The Competition—What could you get online for that price?

“The two main pricing structures we operate are linked to the package on offer,” said Brown. “It is very rare we will offer advertising in a digital edition only, we would normally package web and digital or paper web and digital. If the paper product is the lead, we tend to add in the digital as part of the package at no cost (added value) for a straight replica of the ad. Then we up sell features in the digital edition such as animation.”

While he wouldn’t reveal specifics, Brown says he can charge high rates for digital editions than other online products. “If digital is the lead product, the price would normally be lower than the price we would charge for paper, but higher than equivalent web advertising options,” he added.

Still other publishers are producing digital editions that feature a single sponsor. Hearst’s Project Analog is a digital edition that lets the single sponsor (Microchip) highlight their products to a very specific audience with a high click-through rate.

Don’t Count on CPM Pricing
While CPM pricing has defined other Web advertising such as banners, it can be a problem for digital editions, which typically draw a smaller audience than a Web site (although vendors say digital editions offer more engagement with readers staying longer and looking at more content).

Several vendors, including Imuris, Texterity and NXTbook offer participating publishers the chance to run ads pulled from ad networks and split the revenue. However, publishers should be aware that the typical CPM for such ads is between $1 and $5, while a package bundled directly into the digital edition could range from $10 to $15.

“When we took SLAP magazine all digital last year we started by trying to get current print advertisers to commit to spending the same monthly ad dollars based on a industry standard, impression-based CPM,” said Thrasher magazine group creative director Kevin Convertito on the Folio: MediaPro social network earlier this year. “We were fortunate to have a huge amount of Web traffic already in place that easily ate up all those impressions. If you don't already have a Web presence and active community you probably can't afford to go that route.”

Convertito says pricing can also depend on the digital format, such as the flip-page style or a vertical scrolling HTML. “For high-traffic, html-based sites, you could/should sell a combo of impression-based, click-thru, and/or time-based sponsored rates but for smaller, niche stuff in the page-flip format you'd probably do better to try to continue selling ads and setting rates like you are for the current print magazine and then selling added value like active links and embedded video for much higher CPMs, etc,” he said.

By Matt Kinsman
07/27/2009







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