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The advertising edge.

Is your association magazine a financial drain instead of a valuable member benefit? Are rising production and mailing costs straining your budget?

One solution is to boost your publication's advertising revenue. But with a small, overextended staff and a limited budget, how do you do it? Hiring an experienced out-of-house sales representative may be the answer.

Two years ago, the National Association of Alcoholism and Drug Abuse Counselors, Arlington, Virginia, came to a crossroads with its 52-page bimonthly magazine The Counselor. At the time, its design and editorial more accurately fit the description of a "magaletter" communicating mostly association news to NAADAC's 12,000 members - drug abuse and alcoholism counselors working in hospitals and other treatment centers, both public and private.

NAADAC wanted a more attractive, substantive publication that would help position the association as a leading health care organization and better meet the information needs of its members.

Improving the design and readability of the magazine and increasing the number of articles authored by top experts in the field would increase the credibility and recognition of counselors, and provide an educational resource with the latest information. Those improvements would also attract the interest of nonmember professionals in related health fields - psychologists, social workers, doctors, and nurses. A magazine format gave the association the opportunity to integrate the elements of a journal with the graphic appeal of a magazine.

NAADAC's board of directors, executive director, and associate executive director for marketing (responsible for selling advertising) shared the desire to upgrade the overall quality of The Counselor. As the only staff member who promoted the association's programs and services, the associate executive director could not provide adequate attention to the sales task. As a result, advertising sales for the magazine got pushed to the back burner. While other competitive publications were successfully tapping the market, The Counselor had only a few token ads.

To support the desired improvements to the magazine, NAADAC realized it had to focus on increasing revenue - and to increase revenue a full-time sales effort was essential. The association also realized that in a marketplace with limited advertising dollars, The Counselor risked losing both current and future advertisers if it didn't position itself quickly as a competitive publication.

NAADAC based its decision to hire an out-of-house sales representative on convenience, expediency, and dollars. With eight full-time staff and a budget of approximately $685,000, NAADAC did not have the financial capability to hire an experienced full-time, in-house sales specialist, equip a supporting operation, and fund the repositioning costs of the magazine.

Two years later, the decision to use outside sales representation has proven to be a wise one. Without substantially increasing its size, The Counselor has doubled its advertising revenues - from about $50,000 to $100,000 - and won two awards. Its success in attracting nonmember subscriptions - 300 to date - convinced the association to hire a marketing assistant to concentrate on this income source. Membership in NAADAC has also grown 10 percent annually.

Essential to the publication's ultimate advertising success was the commitment by NAADAC's board to fund and implement all editorial and design changes necessary to position the magazine within its market. Once that commitment was made, the association was prepared to address who would sell advertising.

Positioning your magazine

Before addressing the issue of advertising sales representation, NAADAC took a hard look at its current place in the market as well as its future potential by surveying the competition. At the time, one commercially published counterpart - a 96-page, four-color, bi-monthly magazine - and a handful of related national magazines and tabloids carried most of the market's advertising.

Although it was evident that NAADAC was attracting few if any of those advertisers, the association believed it could compete with these for-profit publishers with an aggressive sales approach and changes in the design and content of the magazine.

It's rare to find an association magazine that doesn't have a commercially published competitor. For-profit publishers exist in all industries and professions and are adept at soliciting advertisers. Typically, these publications have a national sales force, shape their editorial to appeal to advertising interests, and have a variety of sales tools including slick promotional materials and sophisticated reader statistics to attract advertisers.

Without the same kind of concentrated sales program, the small association can seem at an overwhelming disadvantage. However, the one fundamental element these publishers cannot replicate is an association's commitment to the industry or profession it serves.

As the primary source of authoritative information, an association magazine can offer reliable editorial that is devoid of commercial implications. An association magazine also has a select audience of readers dedicated to professional advancement. These advantages can help position the association magazine as a more prestigious publication in which to participate either as an author or advertiser.

Selecting your rep

Standard Rate & Data Service, Glenview, Illinois, and the Society of National Association Publications, Arlington, Virginia, publish the names of advertising (or publisher) representatives. NAADAC, however, found its advertising firm through a personal referral.

Before you contact an independent advertising representative or firm, decide what will work best for your association. Do you want the representative to be located near your association? What size firm can best serve your needs? What, if any, services other than sales do you need? What level of personal service do you want from the firm's principals?

NAADAC wanted its rep to be an integral part of its publishing team. As a result, it chose Judy Solomon Associates, an advertising representative firm in the Washington, D.C., area.

The major factors leading to the firm's selection were JSA's size, proximity, 20 years of association experience, and positive references.

In our initial meetings with JSA, it was clear that JSA's major objective for clients was to generate as much revenue as possible by motivating its sales team. JSA reps meet regularly to discuss their projects and goals; a company flow chart tracks ad sales for all clients; and yearly bonuses are based on gross sales.

Requisite to the sales effort, however, were the necessary tools: a competitive editorial product, a contemporary format, a comprehensive media kit, and ongoing marketing and promotion.

At JSA's recommendation, NAADAC hired a new magazine design firm to redesign the magazine in a more contemporary format - at a cost of less than $2,000. It also increased its budget - from $3,200 for design per issue to $5,000 - by approximately 50 percent to accommodate the design change from a two-color cover to a four-color cover and art for the feature articles in each issue.

As part of its make-over, NAADAC decreased its coverage of association-related activities and expanded editorial to include articles appealing to nonmembers as well, which created a broader reader market for The Counselor.

NAADAC also developed a media kit that included a detailed rate card and editorial calendar. The editorial calendar provides JSA with targeted editorial to sell against and includes deadlines for advertisements and editorial.

Setting dollar goals

Both short-term and long-term financial goals are necessary to ensure a successful venture. Try to determine whether you want to merely offset publication costs or generate substantial income. Also realize that launching an ad sales program takes time - don't expect results overnight. It often takes two years to make headway.

Pinpointing the potential for ad sales can be especially tricky, given the many variables involved: quality of the media kit, publication's niche in the marketplace and its overall quality, market (industry) conditions, and so forth. Rely on the expertise of your advertising rep to establish reasonable goals - especially a dollar amount for ad sales for each issue on a yearly basis. Having clear objectives helps the representative and publishing team measure efforts and progress.

A membership survey indicated NAADAC members regarded The selor as a major benefit - a valuable educational resource providing information on new developments in the field. Given the magazine's importance, the association regularly subsidizes 30 percent to 35 percent of the magazine to balance advertising pages with a healthy amount of editorial. For example, in 1990 the magazine generated $103,000 in advertising sales and $7,000 in subscription income, while the operating costs of the magazine totaled $161,000. The goal is to achieve continued increases in ad sales so that the publication pays for itself.

NAADAC projects the number of ad pages based on its sales history and industry trends. The rate base depends on circulation, what the industry will bear, and what competitors charge. Rate increases also depend on industry trends, and assuming advertising pages per year increase or are equal to the previous year, new rates can account for substantial increased revenue. Revenue estimates for each issue are based on the season and editorial focus. The three issues associated with the association's annual meeting (preview, conference issue, and highlights) generate the greatest revenue.

NAADAC's major goal is to develop a base of advertisers who want to regularly Counreach the magazine's readership. Therefore, advertising rates include frequency incentives for contract advertisers. Special advertiser incentives are also promoted throughout the year to attract add-on, editorial-specific, and special-category advertisers.

Maintaining a successful

partnership

Like any partnership, the long-term success of an ad sales program depends on commitment, communication, and clear roles and responsibilities.

Commitment and communication. It's a good idea to include your representatives in magazine planning activities so that they are invested in meeting the association's goals and are committed to the same standards of excellence. Personal motivation, however, is perhaps the biggest factor, because a representative's income is solely dependent on how much advertising space he or she can sell. The commission rate for ad sales is negotiable, but usually is around 20 percent (see sidebar, "The Contractual Agreement").

This is an important benefit when working with a contractor. Unlike an in-house sales force that may need motivational incentives such as meetings, bonuses, or schedule breaks, advertising representatives are on their own. Nevertheless, the impact of the quality of the publication is still a motivating factor. Positive feedback from advertisers with regard to response and satisfaction encourages the representative to find new prospects.

It is important to communicate with your representative. Regular meetings help evaluate progress and create new directions, since successful magazines must adapt to the times and market demands. With their experience and independence from the association's daily work schedule, ad reps can also bring fresh ideas and objective viewpoints to the publishing team.

At NAADAC, the editorial staff and representative meet several times a year to develop or modify goals and strategies. Administrative details, prospect information, and problem-solving are routinely handled through daily telephone or fax communication.

As part of its team emphasis, NAADAC treats its advertising firm as a staff member to foster understanding of the organization and the members it serves. The JSA representative is invited to staff functions, receives congratulatory feedback when appropriate, and, like other staff, is introduced to newly elected association leaders.

Roles and responsibilities. Functioning as an out-of-house advertising sales office, NAADAC's advertising representative reports directly to the associate executive director for marketing, who supervises the entire operation of the magazine. Specifically, the ad rep is responsible for * soliciting and servicing advertisers; * building and maintaining a data base of current and prospective advertisers; * soliciting and selling advertising through telephone calls, fax transmittals, media kit mailings, and personal sales calls; * providing administrative ad tracking; and * writing all promotional materials.

NAADAC in turn is responsible for * maintaining advertiser financial files; * invoicing advertisers; * production administration; * producing informational and promotional materials; * supplying the advertising representative with appropriate sales materials such as business cards, letterhead and envelopes, media kits, promotional flyers, and magazines; * implementing bulk mailings of special promotions; and * paying the rep's travel expenses to the association's national conference and other association-related conventions.

Although it is the ad rep's responsibility to solicit advertisers, NAADAC staff help identify prospects. This is logical, since staff have daily contact with individuals and companies who might be interested in marketing their products or services.

At NAADAC, the editor and assistant editor provide the representative with prospects gleaned from the editorial of various issues. For example, a company may want to complement its scheduled editorial listing with a display advertisement or take advantage of an article that ties into its advertising message. The director of marketing also plays a key role in providing the representative with the names of conference exhibitors, sponsors, and association members and participants. It also provides the ad rep with outside publications that carry prospective advertisers to The Counselor.

As NAADAC's experience has shown, small associations can compete in today's publishing environment. A defined editorial concept, a distinctive niche in the marketplace, and a shared commitment by publishing and advertising sales staff to the magazine are important requisites for any publishing campaign. However, they must be augmented with aggressive sales and marketing strategies that allow an association publication to compete effectively for its share of the market.

The Contractual Agreement

Successful advertising sales efforts are built on friendly and supportive relationships between publishers and their advertising sales representatives.

But misunderstandings can occur in any business transaction, so signing a legally binding contract is a necessity that also makes good business sense. Here are some of the basic concepts to include.

Territory. Your sales representative might sell ads on your behalf throughout the United States or could be limited to a particular group of states. Alternatively, territory can be defined by advertising category, such as hotels, rather than by geography.

Commission. Spell out whether the sales representative receives commission on all advertising, whether it comes in "over the transom," is sold by association staffers, or is handled completely by the rep.

Usually, reps receive commission on all ads regardless of the source. However, the commission rate you pay is negotiable. Frequently, the commission rate is lower for an established publication with strong advertising revenues and higher for an unproven publication. Commission is based on net revenue, which is the actual revenue received by the association for the ad after any advertising agency discount is subtracted.

Split commission. If you have more than one sales representative, you will need to decide how to handle advertising that is placed by an agency in one territory when the client is headquartered in another. Frequently in this circumstance the commission is divided equally between the two affected reps.

Payment schedule. Sales representatives prefer to receive payment immediately after publication of the advertisement. However, many publishers wait until payment has been received from the advertiser, or agency. If you do pay upon publication, you probably will need to include a clause that explains what happens if an advertiser refuses to pay, declares bankruptcy, or receives a rate adjustment.

Call reports. While a professional representative usually provides ongoing reports of advertising sales progress, having an item in the contract helps reinforce the importance of frequent, complete feedback to you.

Expenses. An outside sales representative usually pays for all travel and entertainment related to soliciting advertising, as well as all office rent, postage, and telephone expenses. A publisher usually provides copies of publications, stationery, business cards, and other promotional materials.

Personnel and conflict of interest. Sometimes publishers specify that a particular person in a large sales representative firm is to handle the publication. Frequently, a contract prohibits the sales representative from handling two competing publications.

Term and renewal. Many advertising representation contracts call for automatic renewal after one year with a provision for early termination and with a specific explanation of how commissions will be handled. A new publication may be asked to sign a multiyear contract.

Disputes and change of ownership. You may want to specify the venue and method of handling disputes. For example, you may prefer arbitration to traditional legal remedies. Also, to provide for a smooth operation should a sale of the publication or the representative's firm occur, however unexpected, include a statement that the contract is binding on heirs, successors, and subsequent owners.

The standard Publisher-Representative Agreement developed by the National Association of Publishers' Representatives, New York City [telephone: (212) 505-9521] is a good starting point for developing a contract specific to your publication's requirements.

Ingrid Montecino is associate executive director for marketing, National Association of Alcoholism and Drug Abuse Counselors, Arlington, Virginia, and Judy Solomon is president, Judy Solomon Associates, Bethesda, Maryland. For more information on related topics or ASAE's Communication Section, call Sheryl' Morton, (202) 626-2722.
COPYRIGHT 1992 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:Publishing; includes related article; using advertising to boost association magazine sales
Author:Comeaux, Judy
Publication:Association Management
Date:Jul 1, 1992
Words:2723
Previous Article:The power of research.
Next Article:Members sustain association meetings.
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