Research done at the University of Cape Town shows that advertisers do not pay more for a white readership, despite the findings of a South African Human Rights Commission report seven years ago.
In a paper published on Tuesday by Economic Research Southern Africa, entitled What Advertisers Want: A Hedonic Analysis of Advertising Rates in South Africa, Nicolas Pietersma finds that, allowing for socioeconomic differences among magazine readers, there is no discounted advertising rate for a black audience.
“In fact, the regression analysis suggests that, if anything, the proportion of black readers is positively related to advertising rates,” Pietersma says.
Because publications that target a black audience cannot generate advertising revenue like those which serve a white audience, research published by the Human Rights Commission in 2000 claimed that advertising agencies operate out of “ignorance of the market or out of sheer prejudice”.
But Pietersma explains that what does influence advertisers is circulation numbers, readers’ income levels, their age and education levels. He finds that, for most magazines, advertising rates increase at a decreasing rate as circulation numbers rise. Moreover, affluent, young and educated readers appear to command a premium.
Pietersma says that, while it can easily be demonstrated that publications with black readers do indeed battle to generate the kind of advertising revenues that similarly sized publications with white readers have, his econometric findings suggest that, allowing for income and educational differences, race is not a statistically significant predictor of these discrepancies.
He also finds statistical support for the view that magazines that target men or women closely — in other words, that have a more narrowly defined readership — tend to attract relatively higher advertising rates. — I-Net Bridge