The cost of magazine advertising goes well beyond the expense of purchasing the ad, and not properly budgeting and tracking all of the costs associated with placing magazine ads can hurt your bottom line. In addition to your ad space, you’ll need to budget for the creation of your advertisements, any fees or commissions for consulting, placement fees and staff time devoted to managing your buys.
The most obvious cost of magazine advertising is the cost of buying the ad space. Rates are different for every magazine, and there is no industry standard, so you’ll have to visit the websites of magazines that interest you or call for a media kit. To compare the cost of running an ad in magazines with different circulation numbers, calculate the cost per thousand, or CPM, or each magazine. To do this, divide the circulation number by the rate to determine how much it costs to reach 1,000 readers. For example, if a magazine has 10,000 readers, and an ad will cost you $500, the CPM is $50. Expect to pay more if you want your ad placed in a specific area of the magazine, and expect a discount if you purchase multiple ads. Ask about an agency discount, which many magazines offer advertisers who use a qualifying agency.
In addition to what you pay for space, you’ll have an expense to create your ad. You might use in-house marketing people or hire a graphic designer or ad agency. Depending on the size of your contract, you might be able to negotiate free or low-cost ad creation. Calculate the cost of creating your ads and include that in the cost of running magazine ads.
Commissions and Fees
If you use an ad agency, you will be charged a fee or commission. The standard agency commission is 15 percent of what you spend on your ads, if you spend enough to make it worth the agency’s time. For example, if you run one $500 ad, the agency probably won’t take you on for a $75 commission. Many agencies will work for an hourly rate or pre-set fee for a campaign. If you use an agency, you might not pay more than the cost of your advertising buy to obtain the agency’s services. Because many magazines offer a 15 percent agency discount, you pay the agency only the cost of the ads you run, then the agency pays the magazines 85 percent of what you give them, making its money this way. In this situation, you have, in effect, no cost for using the agency.
Don’t forget to consider your staff time spent on hiring and working with an agency or graphic designer, researching and meeting with magazines, tracking results and reviewing budgets and invoices. This staff time should be added to your advertising budget as overhead to show you the true cost of magazine advertising, especially if your staff could have spent this time working on other revenue-producing activities.
Sam Ashe-Edmunds has been writing and lecturing for decades. He has worked in the corporate and nonprofit arenas as a C-Suite executive, serving on several nonprofit boards. He is an internationally traveled sport science writer and lecturer. He has been published in print publications such as Entrepreneur, Tennis, SI for Kids, Chicago Tribune, Sacramento Bee, and on websites such Smart-Healthy-Living.net, SmartyCents and Youthletic. Edmunds has a bachelor's degree in journalism.