A recent article by Stuart Elliott in the New York Times notes that the economic slowdown that has diminished (advertising) demand among marketers, and being made worse by the effects of the terrorist attacks, has executives at media companies scrambling to determine what to charge for ad pages and commercial time in the fourth quarter and the start of 2002. Mediaweek reported last week that the big broadcast television networks are trying to avoid steep cuts in commercial prices, as well.
The result, says Joe Mandese, editor of Media Buyer's Daily, " is proving to be the softest advertising market place ever." The sagging market has emboldened advertisers and the agencies to resist price increases, and even to demand significantly lower rates. Pricing, particularly for print, "has gotten very much out of whack," said Jon Mandel, co-managing director at MediaCom in New York.
Condé Nast is raising ad rates 4% for 2002, compared with an 8% increase in 2001. Forbes, has decided against raising ad rates for 2002 after two years of what James S. Berrien, president at the Forbes Magazine Group in New York, called "very aggressive increases. This is a competitive market place," he said, "and this is the year for us to take an aggressive pricing strategy in the other direction."
Fortune, plans "a very modest increase" in ad-page rates, in the low single digits, said Mike Federle, publisher in New York, "the most modest we've taken in my six years here."
The New Yorker, though, is increasing both ad rates and the rate base for 2002. Its ad rates are going up 10.5% as the rate base goes up 6.3%, to 850,000. "It's going to be a tough six months," said David Carey, vice president and publisher at The New Yorker.
Karen Jacobs, senior vice president and director for print investment at Starcom Worldwide, said "More clients are choosing to wait until the last minute to make financial commitments to advertising. They're not necessarily spending less money, but there's less willingness to let go of the money." She described the current mode as "just-in-time media buying," the term used to describe the cost-saving parts-delivery strategy pursued by many manufacturers.
You can read more at the New York Times site.