COMMUNITY SERVICES COMMITTEE

 

 

 

 

 

TO:

Mayor and Members of Council

 

 

 

 

FROM:

Stuart Taylor, Director of Recreation Services

 

 

 

 

PREPARED BY:

Emma Uffren, Publications Coordinator

 

 

 

 

DATE OF MEETING:

2004-Jun-07

 

 

 

 

SUBJECT:

Recreation and Culture Guides, Advertising Rates for 2005

 

 

 

 

RECOMMENDATION:

 

That the report entitled Recreation and Culture Guides, Advertising Rates for 2005 be received;

 

That the advertising rate for the Town of Markham Guide commercial and community advertisers be increased 3% effective Winter 2004/2005 guide;

That the advertising rates for front and back cover space in the Town of Markham 2004/2005 guides be increased according to Table 2 in Appendix A attached;

That the Town of Markham offer fee for services such as full colour, preferential placement, design, and ad re-adjustments etc. to advertisers;

That By-law 2002-276, a by-law to impose fees or charges for services or activities provided or done by the Town of Markham, be amended to reflect the new rates;

 

And further that notice to the public be provided in accordance with By-law 2002-275, a by-law to prescribe the form and manner and times for the provision of reasonable notice.

 

PURPOSE:

The purpose of this report is to recommend and seek Council approval to increases prices for 2005 advertisements appearing in the Town of Markham’s Recreation and Culture Guide.

BACKGROUND:

 

The Town of Markham’s Recreation and Culture Guide is produced four times a year. The Recreation and Culture Guide is the primary marketing tool supporting aquatic, program and camp registration fees.  Program registration fees create approximately $3.8M a year. 

Currently, 30% of each guide is dedicated to advertising space. In 2001 advertisements in the Guide created gross revenues of $85,300.  Table One below documents the advertising revenue growth and projected growth from 2001 through 2005.

TABLE ONE:  Recreation & Culture Guide Ad Revenue

YEAR

GROSS REVENUES

2001

$85,300

2002

$114,000

2003

$132,000

2004 Budget

$152,000

2005 Forecast

$163,000

 

Over the last four years advertising revenue generation has increased by 78%.  Staff will make every effort to increase advertising revenue toward full cost recovery of production (approximately $172,000 in 2004) by the end of fiscal 2007.  This can only be achieved by approving the staff recommendation and by increasing the volume of sales over the next three years. 

 Staff are recommending these increases to augment the revenue generation strategy.

Increasing General Advertising Rates

Three years ago, the Town of Markham re-aligned the pricing of its advertising to better reflect the municipal market. Commercial and Community advertisers continue to advertise with the Town of Markham’s Recreation and Culture Guide. As such, advertising found on its regular “inside” pages (defined as any page inside the guide that is not part of the covers) is printed in black and white with a spot colour (colour changes each season to match the cover image.). Staff is recommending that rates to both commercial and community advertisers within these internal pages incur a basic 3% rate increase starting with the Winter 2004/2005 guide. This rate increase will help to cover the annual rising costs of production. See table 1 of the attached appendix.

 

 

Increasing the Cost of Cover Space

Cover space is the most visible space in any publication. For this reason, advertisers are willing to pay a premium for the exposure these pages bring. The Town, however, is still not maximizing its revenue potential on the guide’s cover space. As is illustrated in table # 2 of the attached appendix, the Town’s current rates provide a total annual revenue of $16,888. Other municipalities are receiving on average $26,000 - $40,000 in annual revenue for similar cover space. Staff is recommending a 47-97% rate increase (noted in yellow in the table 2) for the inside and outside covers to better reflect the added exposure to advertisers this space provides. We have had tremendous demand from large companies looking solely for the exposure brought by the inside and outside cover space. As a result, we believe that the proposed rates can be sold to these larger companies.

Offer Fee for Services Provided

Staff are routinely requested to provide certain services, which under a typical agency model would be provided for a fee. Staff are recommending charging user fees for these services. In addition to such standard services as advertisement scanning, enlarging, reducing and/or designing of ads, we are also recommending the following charges:

·        10% surcharge for preferential placement (i.e. top ride hand corner, ˝ page at top of page, etc.)

·        $200 surcharge to inside advertisements for full colour processing instead of black and white with spot colour

Please see table 3 of the attached appendix for a complete listing of proposed fees for service. 

 

FINANCIAL CONSIDERATIONS:

The total value of these recommendations is a minimum increase of revenue of $11,000 annually. This increase does not take into account the potential revenue generation from fees for services, as these are difficult to predict in advance.   These changes will have a full impact in the 2005 budget. 

 

ATTACHMENTS:

See Attached Appendix A

 

 

 

 

____________________________________                                                                                               

Stuart Taylor                                                                Jim Sales

Director of Recreation Services                                     Commissioner of Community Services

 

Q:\Strategic Services\Shared Data\Marketing & Revenue\Brochure\Reports\2005 Advertising Rates Report v3.doc

 

APPENDIX A

Table 1: Rates Comparison for Town Advertisers

 

2004 ADVERTISING RATES FOR

MARKHAM RECREATION AND CULTURE GUIDE

(RATES SUBJECT TO CHANGE WITH NOTIFICATION)

Size of Ad

Community Advertisers

Commercial Advertisers

Back Cover – Full Page

N/A

$1523

Inside Front/Back Full Cover

N/A

$1343

Inside Front/Back 1/2 Cover

$678

$678

Inside Front/Back 1/4 Cover

$451

$451

Full Page

$967

$1080

1/2 Page

$515

$562

1/4 Page

$158

$357

 

 

Table 2: Rates Comparison for Commercial Advertisers

 

 

Markham Current

Markham Proposed +3%         (47% - 97%)

Surrey, BC    (4 guides)

Oakville   (2 guides)

Burlington  (2 guides)

Mississauga   (2 guides)

Population

235,000

235,000

378,000

155,000

165,000

688,000

Back Cover – Full Page

$1523         ($6100/yr)

$3000 ($12,000/yr)

$2500        ($10,000/yr)

$3193 ($6400/yr)

N/A

$10,000 ($20,000/yr)

Inside          Full Cover

$1343 ($5375/yr) 

$2000 ($8000/yr)

$2000 ($8000/yr)

$2163 ($4325/yr)

N/A

$5,000 ($10,000/yr)

Inside           1/2 Cover

$678 ($2712/yr)

$1000 ($4000/yr)

N/A

N/A

N/A

N/A

Inside         1/4 Cover

$451 ($1804/yr)

$700 ($2800/yr)

N/A

N/A

N/A

N/A

Full Page

$1080

$1085

$1400

$1364

$1532

N/A

1/2 Page

$562

$564

$900

$682

$766

$1000

1/4 Page

$357

$358

$450

$398

$383

$550

1/8 Page

N/A

N/A

N/A

N/A

N/A

$250

Total Annual Revenue from Covers

$16,888

$28,000

$26,000

$15,038

N/A

$40,000

 

Table 3: Proposed Fee Schedule for Additional Services

 

Service

Markham

Preferred placement

10% surcharge

Full Colour                              (with images supplied in colour)

$200/ad

Digital Scanning

$15/image

Enlargements

$24/image

Reductions

$12/image

Ad modifications

$30/hour

Ad creation/design

Minimum $130