Desmond faces 'Star' wars as ad empire fights back

Advertisers are threatening to boycott the Daily Star over plans by its owner, Richard Desmond, to increase advertising rates by up to 50 per cent.

Advertisers are threatening to boycott the Daily Star over plans by its owner, Richard Desmond, to increase advertising rates by up to 50 per cent.

Mr Desmond wants to introduce the higher charges for the tabloid in March to close the gap with its rivals, The Sun and the Daily Mirror.

The Sun, which sells four times as many copies as the Star, currently charges around £160 per colour centimetre. This is around six times the current Star rates.

The Star has told media buyers it will not continue to sell advertising space at a discount, especially as the circulations of The Sun and the Mirror are falling far quicker than that of the Star.

Companies who do not buy a lot of advertising space from the Star will be liable for the biggest increases - as much as 50 per cent.

Media buyers said that the sudden hikes had already led at least three blue-chip advertisers - thought to include BT - to stop advertising in the Star. They warned that if Mr Desmond went ahead with the increase, the newspaper would be forced to run more direct-response advertising, such as ads for mobile phone ringtones, which pay more but could damage its image.

Adrian Pike, press buying director at media buying agency Starcom Motive, said: "The increase in rates is an attempt to close the gap between how much the Daily Star charges compared with The Sun or the Mirror. But to do it in one go is a bold step.

"Increasing the ad rates this much risks alienating some key brand advertisers that have started to utilise the title. This potentially could damage the image of the product."

A spokeswoman for the Star said: "We can justify the increases because of the increase in circulation of the last few years."

Other newspapers are also preparing inflation-busting rate increases, hoping that companies will be prepared to pay more in 2005. The Sun is understood to be planning a 6 per cent hike. Media buyers also warned Associated Newspapers against trying to put up rates for the Evening Standard after its launch of Standard Lite, which is currently free to advertise in.

One buyer said: "Associated will try and raise rates soon. We will fight them every step of the way."