Merchandising: Getting out of Hand? in a Tight Marketplace, Publishers Try to Outdo Each Other in Offering "Value-Added" Perks

By Garry, Michael | Folio: the Magazine for Magazine Management, February 1989 | Go to article overview

Merchandising: Getting out of Hand? in a Tight Marketplace, Publishers Try to Outdo Each Other in Offering "Value-Added" Perks


Garry, Michael, Folio: the Magazine for Magazine Management


Merchandising: Getting out of hand? * New York City--When a sports publication sets up an ad client with professional basketball players for a little three-man game in an exotic setting, is this merchandising? When an ad salesperson says, "I know I'll get that advertiser's business because when he comes into town he uses our hotel rooms," is that merchandising?

At a time when rate-breaking is the norm, merchandising--providing advertisers with value-added perks above and beyond ad pages--is being conducted with a new zeal and extravagance that is raising some eyebrows. "I have a client--it's unreal--who makes his media decisions based on what [merchandising perks] he can get," says a source at an ad agency. And liquor manufacturers, he adds, traditionally use magazines to provide contest incentives--cars, televisions, other hard goods--for their salespeople.

Merchandising, sources say, is often now used to mollify advertisers unhappy about rate increases. And the practice often offers more flexibility in the negotiating arena than do rates, which are theoretically controlled by the rate card, they note.

"Suddenly a client will say, 'Don't negotiate with them, we'll live with their rates,' but we know he's getting something underneath," says the ad agency source. "I don't mean dollars--suddenly he shows up at the Super Bowl. This has nothing to do with media values."

"It's a means to sweeten any deal you put together for a client," says Jeff Gorosh, media director for Kansas City-based agency Barkley & Evergreen. "If a publication is not at the top of your list, and they want your business bad enough, they'll go off rate card and provide whatever kind of merchandising you'd be interested in. I was almost embarrassed by some of the deals. We've had publications provide us with a car we can give away."

Merchandising has become such a hotly competitive game that Esquire magazine now includes a copyright line on merchandising proposals given to advertisers. Although the copyright would probably not stand up in court, "We spend a lot of time on ideas, and the reality is that some clients might take those ideas and use them with another title," says merchandising director Alison Parks.

Like the cost of postage and paper, the price tag on merchandising is higher than it used to be--and that simply has to be built into the budget, observes George Green, executive vice president at Hearst Magazines. But the most costly part of merchandising, says Green, usually comes at the beginning of a relationship with an advertiser.

"It's no different than courting," he says. …

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