The Rate Card Introduction Rates Frequency discounts Volume discounts Combination rates Modular rates Contracts Ad agencies Market coverage info Readership/circulation Promotional messages Co-op information Color information Electronic ads Deadlines Special feature schedule Column widths Line screens Odd sizes Legal disclaimers Ad acceptance guidelines Billing and credit terms
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Contracts
Almost all of the discounted rates described in earlier pages are based on a commitment by the advertiser. This is formalized by the signing of an advertising contract, or agreement as some call it to make it sound less intimidating, which states how much the account will run, either in frequency or total column-inches (volume) or both, depending on their rate structure. You can find a sample contract at the bottom of this page.

There may be a time when you are unable to honor the contract. You might wonder what happens if you commit to running once every 26 weeks but stop running after 16? Well, once it's clear that you have not honored or will not be able to honor your contract, usually at or near the end of the time period specified in the contract, then the newspaper has a few options.

Usually the first step would be to call or visit the you. They'll probably remind you that you've committed to a contract and suggest that you start running again.

In our example, if an advertiser has signed up for 26 weeks but has stopped running after 16 weeks, you might think that the advertiser has to pay for the remaining 10 weeks he didn't run.

At almost all newspapers I've worked with, this isn't the case. What happens is that once it's clear the contract has been broken, the advertiser isn't billed for the remaining ads but instead we return to the rate card, and see what the discount would have been if the account had originally signed up for 16 weeks. Going back to our frequency rate card shown earlier in this lesson, you can see that there is no 16 week contract, only a 13 and 26 week contract. This means he did run enough to qualify for the 13 week contract. So although the advertiser was previously billed and hopefully paid for the 16 ads he did run at the 26 week contract rate, the billing department now will go back and recalculate all sixteen ads at the 13 week rate, which, of course, is a higher rate. Whatever the difference is between what he paid originally and what he would have paid at the 13 week contract rate is billed to the advertiser. This is usually called "back-charging".

Now, in many cases, this amount is substantial, and this could really upset an advertiser to the point that even if he pays the difference, he could decide never to run again with your newspaper. The newspaper knows this, and so some newspapers decide to go easy on the advertiser and not back-charge them at all in the hopes that they'll be keeping the door open for future advertising from that business.

Others publications take their contracts very seriously, and no matter how valuable the advertiser is, they will back-charge them in every instance. While many things don't change from publication to publication, how strict a newspaper is on enforcing contracts is something that varies dramatically, so ask your advertising representative about your newspaper's policy, and better yet, look in their rate card.

Overall, as long as the ads are working, contracts are good for you because they save you money on the cost of each ad, and they're good for the newspaper because they usually provide a reliable stream of income.

Retail Advertising Contract Effective date _____________, 200_ By this agreement, the undersigned person, firm or corporation hereinafter referred to as the Advertiser, and The Metropolis Times, hereinafter referred to as the Newspaper, agree with each other as follows: The Advertiser hereby purchases and agrees to furnish copy, and art for display advertising in the ______________________ edition of the Newspaper, such advertising to be billed by the Newspaper for the space contracted for below in accordance with the rates set in the Newspaper's Retail Advertising Rate Card and the terms and conditions set forth therein and on the reverse side hereof as the same may be amended by the Newspaper from time to time. Weekly (Frequency) Space: The Advertiser agrees to use a minimum of _____ column inches per week for _____ weeks. Bulk (Volume) Space: The Advertiser agrees to use a minimum of _____ column inches per year in any appropriate configuration on this contract. Should the Advertiser use additional space to the extent that it would earn a lower rate according to the rates set forth in the Newspaper's Advertising Rate Card and the terms and conditions set forth therein and on the reverse side of this contract, he shall be entitled to pay the rate he actually earns. Should the advertiser use less than the entire amount of advertising as herein agreed, he shall pay for the amount used at the rate has earned. All conditions and regulations printed on the reverse side hereof and as set forth in the Newspaper's Advertising Rate Card are part of this contract. ____________________________ by __________________________ Advertiser                                                         Principal's Name Date signed ________

A sample contract with options for both volume and frequency discounts.

Next: Ad Agencies

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