Following on from last week's story about Fairfax Media halving agency commission, it has sent out a release detailing the changes to its business model and its effect on customers. And it's also announced some changes to its sponsorship programme by aligning itself with Spikes Asia rather than Cannes Lions.
Fairfax says the standardisation of its newspaper rate card format across its network offers "both advertisers and agencies consistency and clarity". The standardisation is being rolled out gradually, with regional newspapers having already made changes.
From 1 August 2012, all of Fairfax Media’s nationwide and metropolitan newspapers will migrate to the standardised rate cards with the remaining community newspapers following later in the year.
All advertising charges on the new rate cards will be inclusive of colour and have a standardised rate of discounts applied commensurate with volume purchasing rates. This means removing the direct rate card from the market and working off one card only—a much-maligned bugbear of agencies—which "delivers on the commitment to agencies to achieve parity between the direct and agency rate cards".
“This standardisation makes it much simpler for our customers," says group sales and marketing director Sandra King. "Newspapers have also moved to a magazine-style rate card, so rather than worrying about a whole range of column centimetre rates and extra charges for colour, advertisers and media planners will now be able to swiftly see the cost for a colour full page or a half page advertisement, for example. This makes larger format ads more cost effective.”
A key reason for the halving of commission rates, a decision that has come about after discussions with the market over the last 12 months, is the consolidation of the separate commission and non-commission bearing rate cards currently in the market. As a result, agency commissions will be reduced to 10 percent (five percent plus five percent prompt payment). This follows a continuing trend of reducing agency rates, following TVNZ’s move in January 2011.
The change is effective 1 August 2012 and will apply across Fairfax Media’s divisions, including Fairfax Magazines and Fairfax Digital.
“We are committed to ensuring our business model is meeting our customers’ needs. As part of our review of our rate cards and standardising the format and reviewing the direct card, we assessed the market and felt it was appropriate to reduce our commission rates. This has been done in consultation with the market and we feel media agencies understand our position. We of course are open to their ongoing feedback.”
In other news, Fairfax has also moved to send young creative whippersnappers to Spikes Asia rather than the Cannes Lions because, as King says, New Zealand agencies are increasingly being asked to participate in regional campaigns and this awards programme has growing relevance to the local market.
“Having attended the Cannes Lions Festival I know just how inspiring it is and how prestigious it is to receive a Lion," King says. "Our industry is constantly punching above its weight and has forged a name for itself at Cannes, and I am confident that our creatives will increasingly do the same at Spikes Asia. This year we are very excited to announce we are sending three teams of young creatives to Spikes Asia in September [rather than one pair of Young Lions to Cannes, as is usually the case] and are sure we will have New Zealand’s brightest and best upcoming talents making their marks on the Asia Pacific region.”
Fairfax Media remains the Cannes Lions partner for New Zealand for 2012. But it won't be involved with Cannes next year.