Inflation has been driving up the prices we're paying for gasoline, food, and other commodities. In many places, real estate prices have been skyrocketing, too.
Chances are, your station is spending more money on goods and services that used to cost less even six months ago. INSIDE RADIO recently wrote about ad rates going up, too.
So, we have two questions:
1. Will your station be raising rates soon, and if so by how much?
2. How will you address the rate increase with your advertisers?
Please respond in the Quick Reply box below. Thanks!
We don't raise rates just to raise them, we do it because of demand. In the past year, I insisted that new clients pay $100 per minute and also offered a lower price option for 30 second ads. Half the price + $10 is the rule.
Now my sales team is mostly selling 30's and we are able to get more clients on the air at a higher rate per minute.
Yes, we are time based, not unit based as a Talk Radio Station.
Scott, thanks for sharing your situation. I remember, back in the mid- and late-70's in Winona, where we were being trained by Jim Williams, we raised the rates quarterly, simply because we were a better sales operation (hence, a better operation) than we had been in the previous quarter. That was how we viewed our situation. We believed it, we acted accordingly, and eventually advertisers realized that locking in a rate for 52 weeks (or better) was to their advantage, in more ways than one.
Rod, in Indiana, we have elections 3 out of every 4 years. 2021 was the off year. As a news/talk station we generate significant political spending for the May Primary and November General Elections and our rate card includes the Lowest Unit Rate, but that is pre-emptable. We actually charge a premium for non-bumpable ads and urge candidates to use them which they do.
2020 with Covid, we took a small hit in overall spending compared to our original budgets, but we regrouped and lowered operating costs and actually beat our revised Covid Budgets. Part of what helped was 2020 election spending.
Regarding annuals, that has always been an emphasis of mine as a seller and now as a manager. Looking at my 2022 annual budget, we already have 33% of it on the books and by December 31st will have at least 50% on the books before the year begins!
I actually have my annual goals for the next two years so we can continue to move "up and to the right" financially.
From Sandi Conner:
We have been doing a lot of "BOGO" contracts and it was working well...but..inflation reared its ugly head. The good thing is, there is a disclaimer on the contract that says the "BOGO" can end at any time without notice, so we are covered. We have a good product so I do not anticipate a lot of push back. We are a unicorn among the many stations in our area because we are the ONLY Oldies stations and we offer great weekend fare with syndicated programs and all of them are sponsored.
As far as I know we are not looking at a rate increase. I did work for an AM/FM combo that was triple the rate of our competitors. Sometimes it was an issue and we'd say we charge what we are worth. Then we'd ask if they thought the competitor wished they could charge what we charge.
I was also taught the rate doesn't matter. If you pay $1,000 for 10 or 1,000 commercials doesn't matter, the results do. I'll be coming back to look you in the eyes on results, not the rate per commercial.
Bill, I love that last line: "I'll be coming back to look you in the eyes on results, not the rate per commercial." Well stated. And I'm facing a situation where I may use it myself. Because I work with a relatively small number of accounts, most of whom have been with us/me for many years, if not decades, the topic of rate just doesn't come up in our discussions. But now I'm working with a brand new prospect who's interested in putting a daily report on the air on our station, but is balking that the cost is "half" of what the two stations in another market 35 miles away are charging. Obviously, I can't control what they charge, nor am I able or inclined to lower our rate. But it's a work-in-progress and we'll see what happens. Thanks for taking the time to respond.
