Print Ad space: analysing pricing strategies

Abstract

The pricing of ad space in newspapers has always been tricky. The existing literature on this topic(mostly done in developed countries) consider circulation as the most important factor in determining ad rates In India, the English dailies are seen as premium and the ad space in these is sold to clients that are into high end products and hence the ad spaces in English dailies always sells at a premium. To understand these factors which affect the pricing strategies of dailies and bundles of dailies models were created during the course of the study based on rate cards of Indian newspapers. The model developed to identify pricing strategy of dailies used circulation, size of the ad and the location of the ad on the newspaper as some of the key factors of determination. The model was developed by regressing ad rates with the above mentioned factors. Brand image, duplication of readership and area of circulation were some of the additional factors that were considered while developing a model for the pricing of bundled services. Since these variables were qualitative, dummy variables were assigned and regression of these multi variables was done using SPSS. The models developed helped in identifying the intensity of impact of each factor on ad rates and the discounts offered. But on a practical case, the impact deduced was on a smaller scale. It was found, through interviews, that client relationship actually plays a key role than the above mentioned factors. Thus the empirical model developed helped identify the correlation between the factors mentioned and the ad rates and the base rate on which all these factors are applied depends in personal relationship between the publisher and the advertiser.