by Tatiana Repkova

Chris Kubas has a question for newspapers considering a page-width reduction in order to cut costs: How will you protect against the potential loss of ad revenue?

"The real difficulty happens if you still sell ads on a linear inch basis," said Kubas, vice president of Toronto-based Kubas Consultants. "You still haven't fixed the underlying problem: How do you maximize revenue per page?"

Reducing page size cuts costs, but also reduces the lines and inches available on each page for selling ads. This means newspapers must either accept less revenue per page, print more pages, or raise rates to compensate, said Kubas. The first two options are undesirable. And raising rates for smaller space will be a tough sell to advertisers.

Kubas discussed this problem with newspaper executives in a recent industry conference call, and presented a solution: modular ads. "It's really a beautiful way to sell advertising," said Kubas. He believes modular ads are not only easier to sell, but will also maximize a newspaper's revenue per page. The traditional newspaper method of pricing display ads on a linear basis has several flaws, said Kubas. It requires sales reps to lead their clients through complicated calculations of columns, inches and dollars. And it doesn't have incentives for advertisers to increase their ad size, or penalties when they decrease their ad size.

A better method is to create a menu of modular ad sizes with rates based on the percentage of the page they occupy. Advertisers will have a much easier time understanding their advertising options when shown a menu of available ad modules and their prices. And sales reps will have an easier time closing the sale. Linear-based pricing makes it easy for advertisers to reduce the size of their ads without penalty. http://www.inlandpress.org/main.asp?FromHome=1&TypeID=1&ArticleID=1255&S... February 20, 2007