Simply put, advertising rates -- across the board -- are extremely too high. This, in turn, has a cascading effect on the cost of doing business; and ultimately, the cost of consumer goods and services.
How we got to this point is easy. Like so many industries today, media companies have been consolidated and are now part of large publicly-traded corporations, whose primary function is to increase the value of their stock for their shareholders. And, while on the surface this seems like good old American capitalism; in reality it is anything but.
Making a profit is every company's goal; but having to increase the value of your stock, quarter over quarter and year over year is destroying the free market system and the entire U.S. economy.
Here's how:
Say a local magazine or radio station is bought out by a large media
giant. The first thing they do is attempt to reduce their overhead by
cutting jobs that can be performed by existing corporate personnel.
Next they might sell the equipment and/or buildings, and move
operations to a central location. After that, they continue to
implement cost-cutting measures to increase profits; and eventually
they may even sell off the business or "merge" it with another one.
Now all of this is great for the company and the stockholders; but it wreaks havoc on the local economy and community... Jobs are lost, leases are cancelled, property is up for sale; and perhaps worst of all -- a competitor is lost -- and that's when things get really bad...
This new formed "monopoly" reaches a point where it can no longer increase profits through consolidation; therefore, the only way to raise additional revenue is to up the rates. And since they have bought out the competition, advertisers have no alternatives, and the prices go up and up and up...
When the cost of advertising goes up, businesses who advertise have to raise their prices; and subsequently, consumers have to spend (and borrow) more, and the cycle continues...
Just like the housing bubble where real estate prices nearly doubled in a decade (and then the market crashed); the same is now going on with advertising costs.
Of course the media isn't going to cover this story, since it's not in their best interest, or the interests of their shareholders. However, it's only a matter of time before the media bubble bursts, and truely-locally-run (and affordable) media returns.
In the meantime, you got to fight tooth-and-nail to get a good deal. And gard-dangit, don't believe media-supplied sales kits, circulation figures and demographic profiles. They're bull! And if you're dealing with one of those pseudo-agencies that doesn't question media rates and figures, fire them now.