So, I turned to advertising sales expert Robert Silverstein for his insights. Silverstein had just addressed a crowd of professional communicators at an Association Media & Publishing event in mid-October. You can read a summary of that session here (full disclosure: I wrote the summary for AM&P).
Here is Silverstein's take on the money-back tactic:
This is such a bad idea for associations, on many levels, that it should not ever be considered as a solution for declining ad sales. Let me share with you some reasons why:
- The publisher has no control over the product/service being advertised, its price, or the ad's content, design or message and the appropriateness of those for the audience the magazine delivers. So, if the ad fails to generate the expected increase in sales, whose fault is it? Was the product not right for the readership? Was the ad not designed in an attractive way? Was the message not effective or appropriate? It is the sole responsibility of the advertiser to make those determinations, yet, under the guarantee, the publication has to suffer if the ad does not work.
- How will such a program be tracked? Will the advertiser share its response and sales figures with the publisher? How will those numbers be verified by the publisher? What type of tracking will the advertiser use to determine that the publication produced the sale of the product? Does the advertiser unilaterally decide that the ad didn't meet his expectations and, therefore, refuse to pay for it? What recourse, if any, will the publisher have if he disagrees?
- This type of program clearly undermines the value of the publication and the readership it delivers. This is especially a bad idea for associations and is a business model that could have even more severe consequences down the road. What if an advertiser, who is also an exhibitor at the association's annual convention, claims that he got no leads from his exhibit? Will he also get a refund for that, too?
I have sold advertising for association magazines and, in the past, I have received requests from some categories of advertisers for what are called "PI deals". PI means "per inquiry" and this is from an advertiser who is willing to pay only a few dollars for each sale it makes that is tracked back to the ad that ran in the association's magazine. This is a fairly common model among direct response advertisers, though I have seen much less of it now than I did years ago as those companies have shifted to the web. I have never accepted such a deal on behalf of my association clients for the reasons I have outlined above.
Associations must adhere to the value of their products, assign a price to each product and stick to it. If negotiation is necessary to close the sale, the reduced price still must be paid in full and is not linked to the performance of the ad. This is a rule that should not be broken by an association publisher because doing so will only lead to a decline in ad revenues and create a cheap and negative impression of the product and the association that produces it.
- Robert Silverstein
What do you think? Shoot me your comments via Twitter: @wrightscontent.
For more ad sales tips, visit Silverstein’s firm online at adsalesexperts.net, email him (rsilverstein [at] adsalesexperts.net), or find him on Twitter: @adsalesexperts.
(Image: U.S. Mint)