Newspaper Advertising?

[DStyle]

After the failure to launch my app idea (I have a thread on here about it) I have got the idea to launch my own monthly newspaper.

In my local area there is currently 2 competitors producing monthly newspapers which are filled with ads. I got a copy of the rate cards and they are turning over in excess of £20,000 a month each. Having researched the costs of printing and circulating (approx £6500 a month) there is potential so earn a few quid every month.

The business consists of 2 parts:

Firstly by keeping our overheads and staff costs to a minimum we can still offer businesses advertisements at a fraction the are currently paying and still make a healthy profit. An example of one advert which cost £800+Vat in one paper, we could do for £350+vat and still make profit.

Secondly is the content, out of the 2 competitors, 1 is filled with adverts and out of date news - generally a month old and there is nothing worth reading in it. The other is filled with adverts and business editorials - promoting the businesses that placed adverts so nothing really exciting to read.

I genuinely can't understand who actually reads the papers other than pensioners.

This makes me wonder why businesses advertise in them and pay a large amount of money per month.

We have come up with some great content ideas which would appeal to people in their early 20's and 30's which would seem to suit 80% of the advertisers who pay the competitors.

The Pitch?

As a brand new company with a brand new product my idea for selling this to businesses was to print up sample copies and go out and demonstrate the content and quality of the print along with promoting the lower prices and our target market.

Is this a stupid idea?

Or should I just launch it and offer people free ads for the first couple months then they can see the benefits?

 

[NickGrogan]

No one pays ratecard for advertising. I'd expect to pay 25-33% of ratecard at most.

 

[DStyle]

No one pays ratecard for advertising. I'd expect to pay 25-33% of ratecard at most.

I did phone one to do a bit of digging. They offered 25% for my first advert only and my friend who advertises with them every month has never had a discount from them so the rate card does seem not to be flexible with one of them.

 

[Mr D]

Don't bet on making money every month even after you have circulation sorted. Which itself is a job.

 

[Mr D]

I did phone one to do a bit of digging. They offered 25% for my first advert only and my friend who advertises with them every month has never had a discount from them so the rate card does seem not to be flexible with one of them.

I had an advert done through an agency, cost for the advert was about 20% of the best offer the paper ever offered me.
I wasn't however spending tens of thousands of pounds a week on advertising with the group.

 

[NickGrogan]

I'd suggest your friend has a word with whoever is arranging his advertising, they're ripping him off.

 

[DStyle]

I had an advert done through an agency, cost for the advert was about 20% of the best offer the paper ever offered me.
I wasn't however spending tens of thousands of pounds a week on advertising with the group.

I understand that an ad agency would get a discount but I assume they would be buying a lot, maybe I am wrong on that one.

I'd suggest your friend has a word with whoever is arranging his advertising, they're ripping him off.

He isn't a massive business just a local trades man and wouldn't use an ad agency or anything. They phone him every month to confirm he wants an ad but no discount is given.

 

[DStyle]

But the purpose of the thread is that if a business you never heard of came to you with a sample paper and content along with prices and target market, would that be enough to convince you to buy an advert or what would you need to be sold on the idea?

 

[NickGrogan]

They must love him, why doesn't he ask for a discount?

 

[NickGrogan]

But the purpose of the thread is that if a business you never heard of came to you with a sample paper and content along with prices and target market, would that be enough to convince you to buy an advert or what would you need to be sold on the idea?

No chance, not without verified circulation figures and copies of past issues to see the quality of the content.

 

[DStyle]

They must love him, why doesn't he ask for a discount?

He did, they said everyone pays the same price to keep if fair. So he cancelled and all of a sudden got loads of telephone calls to come out to price jobs and when he went out the address didn't exist. Not saying they did that but it didn't stop until he took out more adverts.

No chance, not without verified circulation figures and copies of past issues to see the quality of the content.

Thanks for the input

 

[NickGrogan]

He did, they said everyone pays the same price to keep if fair. So he cancelled and all of a sudden got loads of telephone calls to come out to price jobs and when he went out the address didn't exist. Not saying they did that but it didn't stop until he took out more adverts.

Sounds like a great place to advertise...

 

[DStyle]

Sounds like a great place to advertise...

I agree.

 

[Mr D]

But the purpose of the thread is that if a business you never heard of came to you with a sample paper and content along with prices and target market, would that be enough to convince you to buy an advert or what would you need to be sold on the idea?

I'd need to know how many people and what area was seeing the ad.
Without a distribution system I'd not advertise.

 

[Mr D]

I understand that an ad agency would get a discount but I assume they would be buying a lot, maybe I am wrong on that one.



He isn't a massive business just a local trades man and wouldn't use an ad agency or anything. They phone him every month to confirm he wants an ad but no discount is given.

Yes the agency would get a considerable discount.
Now suppose 80% of the advertising you sold was to big companies spending a lot - and wanting massive discounts.
Oh and not forgetting of course you producing and distributing the paper before they have to pay... 30 days credit, maybe 60 or 90 days credit. That's you lending much bigger businesses some money for so many days.

 

[DStyle]

I'd need to know how many people and what area was seeing the ad.
Without a distribution system I'd not advertise.

Great, forgot to include that. Though the circulation figures will be a little bit more that the competitors the delivery method will be with the same company.

 

[DStyle]

Yes the agency would get a considerable discount.
Now suppose 80% of the advertising you sold was to big companies spending a lot - and wanting massive discounts.
Oh and not forgetting of course you producing and distributing the paper before they have to pay... 30 days credit, maybe 60 or 90 days credit. That's you lending much bigger businesses some money for so many days.

As its a local paper I highly doubt the local small businesses will be using ad agencies. Maybe some might but I doubt it will be a lot.

Credit terms that I was thinking was first ad 50% on booking advert and 50% 14days after it is circulated. Once we have built a relationship I would be offering 30 days credit.

I think the days of 60+ days credit are long gone.

Both competitors are payment in advance only with no option of any credit.

 

[Mr D]

As its a local paper I highly doubt the local small businesses will be using ad agencies. Maybe some might but I doubt it will be a lot.

Credit terms that I was thinking was first ad 50% on booking advert and 50% 14days after it is circulated. Once we have built a relationship I would be offering 30 days credit.

I think the days of 60+ days credit are long gone.

Both competitors are payment in advance only with no option of any credit.

Why not?
What is there about paying for an ad campaign that limits it to doing all the work yourself.

Wouldn't know about 60 plus days credit being gone, was offered it by over a dozen businesses last week at the trade fair. We saw less than 50 businesses.
You want to get people signing up to your business, give them a reason to sign up. Some may well take a 30 day credit facility and turn it into 60 days. What will you do, drop the customer?

Both competitors are payment in advance to you.
You cannot know what deals they work with others.

 

[DStyle]

Why not?
What is there about paying for an ad campaign that limits it to doing all the work yourself.

Wouldn't know about 60 plus days credit being gone, was offered it by over a dozen businesses last week at the trade fair. We saw less than 50 businesses.
You want to get people signing up to your business, give them a reason to sign up. Some may well take a 30 day credit facility and turn it into 60 days. What will you do, drop the customer?

Both competitors are payment in advance to you.
You cannot know what deals they work with others.

Not sure what you are asking why not?

If you're asking why a lot don't use ad agencies, its because I am targeting small businesses and the area I am based isn't exactly hiving with ad agencies. A quick google search just the nearest ad agency is 64 miles from me.

So why am I different?

I will offer 50% upfront and 50% 14 days after with the possibly of 30 days credit which is more than my competitors. The prices will be around 50% cheaper than my competitors, the circulation will be around 4500 homes more than my competitions. Is that not reason enough? compared to what they are currently offered?

With regards to my competition, I can know because I have seen the terms and conditions of both, I have experience with one and the other is well known in the area for only working in cash sales as well.

 

[intheTRADE]

You are going to need to do a first edition price in order to firstly make sure you fill the paper first time round and secondly demonstrate the results to those advertising in it.

If your aim is to take the current companies advertising in the other newspapers they aren't going to pay anywhere near what they are currently paying to speculate in a new publication.

I know you said circulation numbers will be similar but are you also delivering to the same area?

 

[DStyle]

You are going to need to do a first edition price in order to firstly make sure you fill the paper first time round and secondly demonstrate the results to those advertising in it.

If your aim is to take the current companies advertising in the other newspapers they aren't going to pay anywhere near what they are currently paying to speculate in a new publication.

I know you said circulation numbers will be similar but are you also delivering to the same area?

Yes its the same areas with the addition of one area of around 4500 homes. I like the idea of a first edition price. great advice.

 

[Mr D]

Not sure what you are asking why not?

If you're asking why a lot don't use ad agencies, its because I am targeting small businesses and the area I am based isn't exactly hiving with ad agencies. A quick google search just the nearest ad agency is 64 miles from me.

So why am I different?

I will offer 50% upfront and 50% 14 days after with the possibly of 30 days credit which is more than my competitors. The prices will be around 50% cheaper than my competitors, the circulation will be around 4500 homes more than my competitions. Is that not reason enough? compared to what they are currently offered?

With regards to my competition, I can know because I have seen the terms and conditions of both, I have experience with one and the other is well known in the area for only working in cash sales as well.

The ad agency I used was almost 200 miles from me.
We have these things called phone and email these days. Gone are the days when I have to physically walk in the door of a place to arrange anything to be done.

You cannot know what deals your competitors will be doing with businesses. Some of the places wanting to advertise may be considerable in size - you going to turn away multinational companies with local shops / depots in your area simply because they aren't small enough?

I'd suggest you are going too cheap. What happens the first time one of your costs goes up?
What happens in a quiet month where you don't have sufficient advertising?

 

[DStyle]

The ad agency I used was almost 200 miles from me.
We have these things called phone and email these days. Gone are the days when I have to physically walk in the door of a place to arrange anything to be done.

You cannot know what deals your competitors will be doing with businesses. Some of the places wanting to advertise may be considerable in size - you going to turn away multinational companies with local shops / depots in your area simply because they aren't small enough?

I'd suggest you are going too cheap. What happens the first time one of your costs goes up?
What happens in a quiet month where you don't have sufficient advertising?

I understand what you're saying however knowing the area there is not many multination companies. Its a local area and the locals are a strange breed. I am not saying I would turn away ad agencies but the chances of 80% of my ads being from them is very very slim and of course I can regulate the ad space and set limits on how many I put in per month.

One of my competitors is well known for not offering credit terms and working in cash only so this I can guarantee and my best guess (based on my friends experience) is that they won't budge on their terms even it if means losing business.

Regarding prices, if my running cost increase then I would adjust the prices accordingly the same as every business does.

 

[NickGrogan]

He did, they said everyone pays the same price to keep if fair. So he cancelled and all of a sudden got loads of telephone calls to come out to price jobs and when he went out the address didn't exist. Not saying they did that but it didn't stop until he took out more adverts.

What do you expect them to do when you open up in competition and start offering credit?

 

[Ian J]

Selling advertising in free newspapers or magazines is tough especially when you are up against established competition. Who is going to do the selling for you?

Getting the buggers to pay afterwards is equally tough with many having a great deal of expertise in wriggling out of paying.

Like you I thought it easy and 35 years ago I left the cosy world of commercial finance to set up my own free newspaper with the USP of being the first full colour newspaper in the UK.

To say that it was not a success would be a gross understatement. We couldn't sell enough advertising against the long established local rival and we couldn't get the customers to pay for their adverts so the project was comparatively short lived costing me a small fortune in the process

 

[DStyle]

What do you expect them to do when you open up in competition and start offering credit?

I would expect my prices and service would retain the customers. Also I hope that the content will also entice businesses to stay as well.

Selling advertising in free newspapers or magazines is tough especially when you are up against established competition. Who is going to do the selling for you?

Getting the buggers to pay afterwards is equally tough with many having a great deal of expertise in wriggling out of paying.

Like you I thought it easy and 35 years ago I left the cosy world of commercial finance to set up my own free newspaper with the USP of being the first full colour newspaper in the UK.

To say that it was not a success would be a gross understatement. We couldn't sell enough advertising against the long established local rival and we couldn't get the customers to pay for their adverts so the project was comparatively short lived costing me a small fortune in the process

It will probably be me selling for the first couple of months until I can get a couple sales people on board.

I don't expect it to be easy money as I have about 200 things that need done every week so I will be busy. Payment is an issue but if I get 50% upfront then at least I am only chasing half the money instead of it all.

I also hope to build a bit of loyalty with businesses so we can work with businesses struggling to pay.

 

[DStyle]

What do you expect them to do when you open up in competition and start offering credit?

Sorry Nick I read your post incorrectly. I expect them to do a lot of things and I have prepared for some of them. Time will tell

 

[sumisbeat]

If you think for online advertisement on premium news sites, I may place my candidature there. I have access on several News Portals where you can place your advt.

 

[DStyle]

If you think for online advertisement on premium news sites, I may place my candidature there. I have access on several News Portals where you can place your advt.

I am not sure what you even mean?

 

[fisicx]

Who is going to write all content? Where are you going to source the content?

 

[Mark T Jones]

Like many a wannabe business-owner before you, you are trying too hard to sell the idea to yourself (there is no point selling it to us, we won’t be affected in any way by the outcome)

At this point you should be researching and challenging assumptions - not clinging onto naive beliefs. This might put you off the idea, but the exercise itself will be educational

To paraphrase points raised:

Sales: You will effectively running a
Telesales operation with a newspaper at the end of it. Outside of chefs, outbound telesales is the most volatile, psychopathic work environment going. What experience to you have in teleselling or running teams?

Payments: no experienced buyer expects to pay rack rate, nor do they expect to pay 50% in advance. You will have to offer very compelling reasons for them to do so. After managing sales people, collecting money will be the next biggest challenge

Distribution: I don’t know what qualifying criteria are, but you will need a reliable distribution network and verified numbers

Content: is probably on the list somewhere. But pretty low down TBH many just rely on advertorial

That said, there is money to be made - which is evidenced by many that do so. As always, success or failure will lie in the execution not in the idea itself

 

[Ian J]

That said, there is money to be made - which is evidenced by many that do so. As always, success or failure will lie in the execution not in the idea itself

My opinion is that to a successful startup in this industry one must either be a salesman or editor and as already mentioned I speak from experience

 

[DStyle]

Who is going to write all content? Where are you going to source the content?

The content is already source for us by another company, this comes at a small charge.

Like many a wannabe business-owner before you, you are trying too hard to sell the idea to yourself (there is no point selling it to us, we won’t be affected in any way by the outcome)

I am already sold to be honest, I am just listing all the facts on the thread to stop people making assumptions.

At this point you should be researching and challenging assumptions - not clinging onto naive beliefs. This might put you off the idea, but the exercise itself will be educational

What naive beliefs?

To paraphrase points raised:

Sales: You will effectively running a
Telesales operation with a newspaper at the end of it. Outside of chefs, outbound telesales is the most volatile, psychopathic work environment going. What experience to you have in teleselling or running teams?

This will be my biggest problem to start with, I am not a telesales guy I prefer to get out and meet people, shake hands, and demonstrate the product. I hope to create a sales team in the future that will do sales like this to avoid as much outbound telesales as possible.

Payments: no experienced buyer expects to pay rack rate, nor do they expect to pay 50% in advance. You will have to offer very compelling reasons for them to do so. After managing sales people, collecting money will be the next biggest challenge

Again my payment terms are more flexible than the current competitors. I agree they must have payment up front to avoid chasing debt.

Distribution: I don’t know what qualifying criteria are, but you will need a reliable distribution network and verified numbers

Distribution has been price and sourced by a big company. I can also get ABC verified at some point.

Content: is probably on the list somewhere. But pretty low down TBH many just rely on advertorial

This is what the competition do however as I stated who actually reads it? I mean if people have no reason to turn the page then having your advert on page 30 is pointless. The content has been source and comes with a small fee.

That said, there is money to be made - which is evidenced by many that do so. As always, success or failure will lie in the execution not in the idea itself

 

[DStyle]

My opinion is that to a successful startup in this industry one must either be a salesman or editor and as already mentioned I speak from experience

I do have some experience as a sales person but as I said I prefer the face to face approach rather than a telephone call. Lets face it how many calls do businesses get every day from people wanting money. I prefer to sell the idea first.

 

[Mark T Jones]

What naive beliefs?

You know nothing about tele sales. Critical in this sector

You know nothing about credit control. Critical in this sector

You know nothing about publishing (arguably) critical in this sector

Your market research appears to be limited to looking at competitors’ rate cards and talking to mate who advertises because they make spoof enquiries if he doesn’t.

Anyway I’ll duck out now and hope someone comes and tells you what you want to hear (to get their post count up)

 

[DStyle]

What naive beliefs?

You know nothing about tele sales. Critical in this sector

You know nothing about credit control. Critical in this sector

You know nothing about publishing (arguably) critical in this sector

Your market research appears to be limited to looking at competitors’ rate cards and talking to mate who advertises because they make spoof enquiries if he doesn’t.

Anyway I’ll duck out now and hope someone comes and tells you what you want to hear (to get their post count up)

Mark, sorry but you have made some assumptions without any evidence which are incorrect.

Happy for you to "duck out" as you haven't really brought anything to the table except miss information.

Insult and run away doesn't make you look very professional.

Goodluck

 

[Root 66 Woodshop]

Slight injection... the idea that you have all sounds good and well, however there are quite a few scam companies out there doing the exact same thing, or perhaps claiming to do the exact same thing the reality of it is that you may struggle to get even the first edition up and running before you've even started...

The big problem with what you've said that I can read for me, as a potential customer is that the content is out-sourced... therefore surely, and I mean no disrespect here... surely if it's from an outsourced company/editor they're already providing said newsletters? therefore why would I choose you over them, if they've been going longer and have the same content... or even worse, plagiarised content...

The fact that your friend is already suffering from one, i.e. he's left them once, now he's stuck or he'll get bogus calls suddenly, should be screaming out to you... they're expensive because their a scam... by coming in at a better priced advertising... all they'll do is match or beat your price, after all they're a scam, they don't care if the content is published or not... they just want to scam money out of hard working people... the cheaper they become, the more people may fall for their scam... thus albeit not directly, you'd be indirectly helping the scammers out there...

 

[DStyle]

Slight injection... the idea that you have all sounds good and well, however there are quite a few scam companies out there doing the exact same thing, or perhaps claiming to do the exact same thing the reality of it is that you may struggle to get even the first edition up and running before you've even started...

The big problem with what you've said that I can read for me, as a potential customer is that the content is out-sourced... therefore surely, and I mean no disrespect here... surely if it's from an outsourced company/editor they're already providing said newsletters? therefore why would I choose you over them, if they've been going longer and have the same content... or even worse, plagiarised content...

The fact that your friend is already suffering from one, i.e. he's left them once, now he's stuck or he'll get bogus calls suddenly, should be screaming out to you... they're expensive because their a scam... by coming in at a better priced advertising... all they'll do is match or beat your price, after all they're a scam, they don't care if the content is published or not... they just want to scam money out of hard working people... the cheaper they become, the more people may fall for their scam... thus albeit not directly, you'd be indirectly helping the scammers out there...

Some great learning points thanks.

I am aware of the scam problem. I'm hoping that being local and being a bit known in the community would help with the trust issues.

I wonder if I offered to provide evidence of the copies printed and distribution figures such as invoices etc would that also help?

The content will be outsourced yes but it will be different than the 2 competitors. As I said one prints news articles which can be a month old news and the other just prints articles from businesses that advertise.

I am hoping a change in content would make people want to read the paper and would mean people adverts would be seen more.

The one competitor isn't really a scam just not very honest (but what newspapers are these days). Them dropping the prices would be a concern but I was hoping that if the content was different and interesting then businesses would see that and want to advertise in it more than one that is barely read.

 

[Ian J]

I am hoping a change in content would make people want to read the paper and would mean people adverts would be seen more.

Have you done any research on what your target market would actually want to read in a newspaper?

 

[DStyle]

Have you done any research on what your target market would actually want to read in a newspaper?

Market research has been carried out on potential readers which was very positive. I am guessing that businesses will want to advertise where the readers are at? maybe I am wrong about that.

Research

Mark, again insulting people online doesn't make you a big man. I thought you had "ducked out" of this thread anyway.