Classified Development

...Classified Nuts & Bolts Solutions...

Rate Structuring

Rate Structuring:

Odds are you don't know how your rates got to where they are in terms of level or structure. Each year, most newspapers simply go up a percentage on the existing rates without the slightest investigation as to whether the current rates are structured correctly for the current market situation. In all fairness, most of the people making these rate decisions have never been trained in how to do such investigations, nor do they have the time to do them. When a major change is needed, many simply copy something that worked at another newspaper.
When it comes to rates, one size clearly does not fit all. Every newspaper has a particular market situation, order distribution pattern, history, potential, cost factor, and set of goals for the classified department's print and online products. Knowing how to set rates correctly for each market is the primary foundation of Classified Development's success. From the time Basil Smith pioneered the principals of proper classified rate structuring methodology back in the 1910's and 1920's, these methods have NEVER failed.
Even though there have been tremendous changes to the classified product over the last 100 years, the basic principals of order distribution analysis and cost analysis have not changed. The only major difference is the speed that modern technology brings to the analysis process. Once the data is in place, setting rates correctly is actually a relatively straightforward process.
The resulting rates are double scaled (or balanced) to encourage advertisers to purchase more lines as well as more days. This means that discounts are given for more days as well as more lines. These discounts are not arbitrary, but rather take into consideration the cost savings from having only one transaction cost for a larger package of description, days and editions. Also considered is the amount of discount needed to motivate advertisers to buy more description and more days. This is where the 30% of rate structuring that is art and experience comes in. Even though this last part is more subjective, it is heavily guided by how the current rates and rules impact the distribution pattern of the current orders.
As for the old argument of whether rates should be by the line or by the word, Classified Development feels that this is another area where one size doesn't fit all. Both methods have advantages and drawbacks, and these have to be weighed out for each set of rates proposed. Sometimes a third option, per-set-of-three-words, is used when a compromise is called for.
Classified Development doesn't ask you to simply trust that the right rate structures have been calculated, but rather provides documentation for every step and consideration for every combination of lines and days. Classified Development also provides a simple and clear policy statement that governs when the different rates should be applied.
Pricing the classified product correctly is the first and most important step in growing your franchise and improving your sales.

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The mission of a Classified Ad-visor is to educate both existing and potential advertisers about the value of the local entity’s combination of Print, Internet-based, and other products, balancing the short-term desire for efficiency with the long-term necessity of building positive relationships with advertisers.

 

A major part of this effort involves ethically guiding each of these advertisers into the type of ad that will most effectively meet the informational needs of our readers/viewers, thereby satisfying the advertisers’ need to reach the most-qualified prospects. 

 

This results in the type of classified content that will meet our local entity’s revenue goal attainment requirements, while simultaneously strengthening the local classified franchise. 

 

By passing along customer feedback to mangers, Ad-visors provide a valuable tool for measuring the effectiveness of current operations and the design of future offerings.

 

            To be successful, Ad-visors must understand the nature of the trust factor inherent in the company’s strong local brands. 

 

Ad-visors must also continually strive to improve their contribution to this equation through ongoing training, broader experience, and increased product knowledge.