Rate Base. What does it mean?

Magazines sell advertisements based on rate base, which is the circulation guaranteed to advertisers. Rate base is also how magazines compute the price per ad with CPM, meaning cost per thousand. (We’ll tap on that in that in another blog.)

The Rate base is the combination of 2 entities:

  • Paid and Controlled
  • Promotional and Giveaways

Paid and controlled is the total number of paid subscribers and pre-qualified distribution, meaning qualified complimentary distribution. It also includes “single copy” newsstand and specialty store sales. A specialty shop for a bicycle magazine would be a bike shop, for a cat magazine would be a pet store, etc.

Look for a high percentage of paid and controlled circulation when shopping for a magazine to advertise in. Magazines that people pay for are more apt to be read thoroughly, thus optimizing the overall visual impact of your marketing material. Conversely, magazines that are given away to anyone and everyone are not as likely to resonate with the recipient as they likely have less connection with the magazine’s content.

Promotional and giveaways are any magazines given to media events, sponsored events, etc. Basically it is magazines that are handed out for free to help encourage subscriptions and promote the publication. When a publication is new it will have a high percent of giveaways and promotional to encourage subscriptions. It is also a way for magazines to inflate their rate base to increase their advertisement costs.

Having a spreadsheet with a breakdown of rate bases for each publication you are considering advertising in, would be the best way to analyze where you will likely see a higher ROI (Return On Investment).

 

 

Posted in Bicycle Times News, Dirt Rag News, Uncategorized

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