Have you audited ad rates recently?


By Pete Van Baalen
Indiana Newspaper Advertising Executives Association

Tax season is upon us, with the April 15 deadline quickly approaching.

One of the tasks at my household over the past few days has been gathering the necessary documentation so that we can visit our tax preparer.

Many people I know do their own taxes. It does save them money, but we pay the fee to obtain peace of mind.

Early in our marriage, my wife and I did our own taxes. One year, we awaited a $545 refund check. (This was long before the miracle of direct deposit!)

When the brown envelope arrived from the IRS, the check was for $45 with an explanation that we had made an adding error and this reflected the proper amount.


That marked the last time we did our own taxes.

There are other reasons for having someone else do them. Most notably, we have a trained professional do them to reduce our risk and likelihood of an audit. After all, who likes an audit?

While audits are generally considered negative, there are good things that can come from an audit.

It’s something I suggest you consider with your advertising department.

When was the last time you audited your advertising rates?

For me, it is an annual ritual – right there with gathering up my Goodwill receipts and W-2s.

Every year, this practice generates revenue for my operation.

The old-school approach was to draw up a new rate card every year, with anywhere from a 1 percent to 5 percent rate increase.

While that might still happen in some markets, it is no longer the common practice. Often times, the traditional newspaper rates are steady, and a newspaper is working on packages and other incentives combined with print to get additional advertising revenue.

While I would love to tell you that we could steadily raise rates and enjoy the bountiful harvest, it is just not the reality we live in anymore. And that is OK.

But we can still look at the rates we’re charging and look for opportunities to tweak them.

The audit process will expose rates that need to be changed, especially the very first time you do such an audit.

In an advertising department rate audit, every rate is subject to review – the published rate card, various service charges and special deals.

Just because you do the audit does not mean you have to change the rates.

But what I have found from past experience is that there are rates that your newspaper is charging now that have not changed in years.

Last year in my audit, I found a rate that had been overlooked for over a decade, and I adjusted it.

The change created a sizeable increase for 2015 revenue. It was like having a medium-sized advertiser open up in my market, and all I did was slightly adjust a rate.

There are a few specific areas that I would review to look for opportunities to change pricing and how you are doing business:

• Premium positions – For most newspapers, premium positions have been a standard offering since the early 2000s. But have you changed your pricing during that time?

• Obituary pricing – It is standard to charge for obituaries at most newspapers. While it is vital content for our newspapers, it is also a strong revenue line. A quick examination of your obit rate structure is very revealing.

• Public notice advertising – I always check the rates allowed by the Public Notice Advertising Law each year. There are state-regulated rates for some categories, and it is very important to verify that you are charging those designated rates. Charging more than is allowed is an obvious problem, but charging less than the stated rates is leaving money on the table.

•Auto and real estate deals – Remember that special package you set up with the local auto dealer when he agreed to increase his advertising over prior-year spending a few years ago? If it is still in place, make sure he is holding up his end of the bargain.

• Post-it notes – Some newspapers can add post-it notes to the front of their publication. This is a highly valued marketing opportunity, which has increased in value in recent years. Has your rate changed?

• Flat charge or sponsorship programs – These programs often are set in place and quickly forgotten. After all, the squeaky wheel gets the grease. These programs are often times good programs with frequent advertisers, so they never get attention. It is always a good idea to take a look and make sure they are still priced properly.

Thankfully I’ve never been audited by the IRS (knocking on wood as I type this). That can be a grueling process I’m told.

In the case of a rate audit at your newspaper, it shouldn’t be a terribly taxing experience for your or others involved. More often than not, I believe you’ll find additional revenue opportunities.

Pete Van Baalen, publisher of The Elkhart Truth, is a member of the HSPA board of directors and president of Indiana Newspaper Advertising Executives Association.