Since the magazine generated 11% more circulation than its nearest competitor (1,550,000 vs. 1,400,000) media buyers would pay no more than an 11% premium to run an advertisement They argued that the value of the magazine’s quality was reflected in the number of subscribers drawn to it. The nearest competitor charges $25,000 for a full-page Differentiation advertisement.
Value: Case RESEARCH
Further investigation suggested that the magazine had
better writers and more interesting articles, nicer photography generating more interests in ads, and a more motivated customer base (2.1 versus 1.8 readers per copy, 14.5% versus 9.2% interest in ads, 2.2% versus 1.6% motivated to act upon seeing ads) and wealthier readership ($200 versus $180 sales per customer. It was also generally understood that, for magazines, 20% of all motivated customers would actually end up buying the advertised products. Margins on sales generated via magazines are typically in the 20%-40% range.