Madison Avenue Tells Mags Not To 'Bleed' Advertisers

magazinesThe Association of National Advertisers and the American Association of Advertising Agencies are flexing their collective clout in a weak media economy and are once again pressuring magazine publishers get rid of "bleed charges," an incremental fee charged for ads that have no border and fill an entire magazine page. Bleed charges originated in an era when the process required extra handling by printers, and generated incremental costs for publishers that were passed along to advertisers and agencies. But modern printing technology has gotten rid of those costs and Madison Avenue has been lobbying the magazine industry to get rid of "bleed charges" for years.

Officially, the ANA and 4As merely "encouraged" their members to "discuss" incremental charges for bleed ads, but their stance was clearly opposed to the "outdated practice."



According to the two ad organizations, incremental charges for bleed ads are no longer necessary; advances in printing and production technology allow publishers to deal with misprints at minimal cost. (A big step forward from the days when presses had to be stopped and printing plates switched out.)

The organizations further stated that the incremental charges for bleed ads carry a significant premium - 5% to 20% - at 442 out of 2,820 magazine titles surveyed by media services agency TargetCast tcm. During a sharp economic downturn, advertisers are more likely to balk at even small premiums that are viewed as unnecessary. The ANA and 4A's added: "There is no apparent cost-based rationale for why they still exist."

The appeal appears especially timely, as Madison Avenue recently convinced the Big 3 broadcast networks to get rid of similar extraneous costs that padded their network TV advertising buys. After years of lobbying, big ad agencies have finally gotten the networks to discontinue so-called "network integration fees," a charge that was added in the early days of television when technicians had to manually switch tapes to insert a national TV commercial into programming.

Advertisers, however, are likely to face broad opposition from magazine publishers, however, as the latter face one of the most precipitous declines in ad pages in decades. 2001 is still the low point in recent history, with a 17% drop in ad pages compared to 2000, but magazines appear to be on their way to a longer, steeper decline in 2008-2009.

After total ad pages tumbled 11.7% in 2008, the first months of 2009 appear to be even more abysmal. Monthly magazines are down 19% in January-February compared to the same months last year.

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