How Ad Sheet Publishers Can Destroy any Publication
Almost 10 years ago I wrote a book entitled "Marketing Your Own Ad Sheet to Make Money". In this book, I advised people to paste-up their customers' ads on a 8"x11" sheet of paper, then send the whole sheet to a tabloid publisher to run at the 8"x11" advertising rate thereby saving money on their printing and mailing expense.
This idea was great advice 10 years ago because only about 50 or less ad sheets existed within a particular market. However, today, there are literally 100's, if not 1,000's of different ad sheets. Many of them come and go overnight. And the ones that stay around and use this old method will destroy tabloid publishers without even realizing it.
Let's take an example to help you understand what I mean. Suppose that Sue publishes a tabloid that is printed and mailed to a 5,000 circulation. Let's assume that each tabloid page costs Sue $30 in overhead expense (printing, paste-up time, mailing.) Sue has advertising rates of $12 per 1" of ad space or $80 for an 8"x11" circular.
Now, Lori has an ad sheet that is also circulated to 5,000 and she charges only $7 per 1" of space. She sells 24 inches of ad space at $7 per inch for a total income of $168. She pays Sue (the tabloid publisher) $80 for an 8"x11" circular and pockets $88 profit.
So, now Lori is getting all the orders. It won't take long before all the higher-priced ad sheet publishers stop sending their ad sheet to Sue's tabloid and Sue feels the effect of the loss of income.
Besides, why should they keep sending their ad sheet to Sue's tabloid? They are not making a dime because all the other ad sheet publishers in the same issue are underbidding them. In the end, Sue's tabloid is destroyed and she goes out of business. And the sad part is that Sue never realized the problem existed.
It would seem the simple solution to this problem is for tabloid publishers to not allow ad sheets to be printed in their publications. But that is easier said than done. How many people could give up a $1,200 or more per month income for their tabloid that is based on the sales from adsheet publishers? They have painted themselves in a corner with no way out.
But there is a way to solve this dilemma without any loss of income. All you have to do is not run ad sheets as one single 8"x11. Instead, cut the ads apart and run them throughout the tabloid instead of all bunched up in one location. Here are the advantages to doing this:
The actual customer who paid to advertise in the ad sheet will get a better response since their ads are not mixed in with 24 or more other ads in the same location.
The ad sheet publisher can run their masthead as a separate advertisement, thereby still generating an income for their particular ad sheet. This way, lots of different ad sheet publishers can advertise in the same tabloid with different rates eliminating competition with each other.
The ad sheet publisher will also still get their price break. If they pay Sue $80 for an 8"x11" ad sheet, the ad space is only costing them $2.96 per inch, compared to the $12 per inch that Sue normally charges.
Sue's tabloid still makes money. In fact, she makes a good steady income since she eliminated the unnecessary competition between her ad sheet publishers.
But even with all this spelled out in black and white, some of you out there will still not accept this method. Why? Because you are probably from the old mail order school of doing things (or were taught by people who were from the old mail order school of doing things.) You would rather keep doing what you have been doing for the past 20 years although you see no evidence of making more money. People like you, I'm sorry to say, cannot see the forest for the trees.
However, you have to realize that what worked 30, 20, 10 or even 5 years ago may not necessarily work today. That's because there are more home-based businesses and more people living on the planet Earth than ever in recorded history. This fact alone changes the various ways of marketing. Besides the general buying public are of a different mindset than they were 5 years ago. Just look around you.
So, because of this on factor, we all have to bend and make changes in our business or we will never grow and prosper. Always remember that marketing (finding ways to sell a product or service) is a PEOPLE business. You have to change with them to supply their wants and needs.
But for those of you who are happy with barely getting by with your publication, forget everything you just read. It would take effort for you to make changes and I certainly wouldn't want to ask you to do something so strenuous!
At this stage of the game, everyone is happy. Lori made a $88 profit from her ad sheet and Sue made a $50 profit from her tabloid. But did she? Let's see what happens when Sue's tabloid is published:
Lester receives a copy of Sue's tabloid and he really likes it. He plans to advertise. However, he notices that he can send Lori his advertisement for her ad sheet and pay only $7 instead of sending it to Sue and paying $12. Which person do you think Lester will order from? Lori, of course! Sue just lost a $12 sale!!
Over a period of a few months, Sue notices her income for the tabloid dropping significantly. On the surface, she doesn't suspect that Lori's ad sheet is the problem. All she knows is that Lori keeps sending her a monthly ad sheet, which is guaranteed money she can depend on. Sue would never think of eliminating Lori's ad sheet since she is a repeat customer.
Sue then assumes that it is to her benefit to offer her tabloid's $80 per 8"x11" advertising rates to more ad sheet publishers and markets to publishers in this fashion. In a few months, Sue has 15 different ad sheet publishers running their full-page ad sheets in her tabloid. That's a monthly income of $1,200 for Sue and therefore she finally feels she has been successful in her marketing.
But guess what? When Lester receives Sue's tabloid this time, he noticed that Frank was running an ad sheet with rates of $5 per 5,000 circulation. Rather than send his money to Lori's ad sheet this month, he sends it to Frank.
In the next issue, Tony comes along and underbids Frank by advertising a 1" ad to a 5,000 circulation for only $4. Lester keeps getting cheaper advertising while all the publishers are losing money.
Pretty soon, Sue's tabloid is filled with nothing but page after page of ad sheets. Each one is in direct competition with each other due to the different advertising rates for each ad sheet. The person with the lowest priced advertising rates gets the business.
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