Rules of Engagement

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By: Mark Fitzgerald

As advertising declines due to the continuing poor economic climate and the migration to digital media, circulation must contribute more to a newspaper’s revenue. Circ is no longer a matter of tossing a paper at the front door before the household departs for work or school. Now it must reach subscribers and non-subscribers alike with a wide variety of packages, with advertising content that can vary from door to door. And now daily newspapers that are members of the nation’s biggest and most influential circulation auditor will have to report circulation in a much different way. Advertisers and ad agency buyers will now have the most detailed picture yet of a newspaper’s marketing strengths – or weaknesses.

The sweeping reporting changes crafted over three years of work by the Audit Bureau of Circulations, Newspaper Association of America and numerous task forces took effect Oct. 1, with the first reports to come out for the March 2011 reporting period.

For the first time, newspapers that publish so-called branded editions – products a paper publishes under a different name, such as commuter dailies or Spanish-language newspapers – can now include those numbers in their
bottom-line “total average circulation,” even if they are free-distribution papers.

And papers that publish in many forms – print, mobile, e-readers, etc. – may be able to count that circulation multiple times.

At the same time, the new reporting forms eliminate the notorious “other” paid circulation category, where it was also possible to stash circulation that advertisers might not want to buy, with new and detailed classifications.

 

Transparent motives

“The new rules will provide much more clarity and transparency to circulation numbers,” says Merle K. Davidson, market media director for J.C. Penney Corporation Inc. and ABC’s current chairman. “They’ll also provide clarity to all the different platforms that newspapers publish.”

 

 

The new reports recognize that daily newspapers are now spinning out publications that may not look like the so-called core product, but have hefty circulation or distribution numbers – such as the youth-oriented RedEye published by the Chicago Tribune, or Briefing, the digest-like paper The Dallas Morning News delivers free to certain high-end households.

“The driver of [the new rules] was to allow newspapers to report to advertisers their total media footprint,” explains Michael Lavery, the Audit Bureau’s president and managing director. “We anticipate some newspapers to have 10 or more branded editions in their reports.”

ABC last year began counting as “paid circulation” any newspaper copies that are sold for any price, including a penny, something ABC had allowed Canadian newspapers to do for the better part of two decades and a long-standing and common practice among magazine publishers. Under the new rules, newspapers will also be able to count non-print products as paid circulation if they receive at least 5% of the price of the first, or base, subscription. One example would be a three-day print subscription offered for $100 a year. The paper could offer a subscription for digital editions the four other days for an additional $5 a year, and count all those copies as paid.

The reporting now requires more detail on “verified circulation,” print copies or editions on digital media that are free but targeted to households by the newspaper or requested by a consumer.

Advertisers will know exactly what they are buying from newspapers, says John Murray, the Newspaper Association of America’s vice president of audience development.

“If you look at the digital categories, you’ll see how much circulation is NIE (Newspaper In Education), how much is home-delivered, what’s going to a hotel, what’s in the university program,” he says. “If you’re an insert advertiser and all you’re interested in is how much circulation is home-delivered, it’s there. The digital edition number isn’t going to have a whole lot of value to insert advertisers. Well, that’s fine, but it doesn’t mean the newspaper shouldn’t report it. It’s up to the newspaper and the advertisers to assign value to the numbers.”

 

Apples and oranges?

 

 One thing advertisers won’t be able to do is compare circulation numbers meaningfully to past figures because of the addition of branded editions in the top-line number. That’s occasioned some comments from industry hands such as blogger Alan D. Mutter, who writes a column for E&P.

 

 

 

“While there are good and valid reasons for many of the changes in the complex circulation rules adopted by publishers in the last couple of years, a not-so-unintended consequence of these changes is that they will make it all but impossible to compare newspaper circulation in March 2011, with circulation in March 2010,” Mutter wrote on his “Reflections of a Newsosaur” blog.

But that’s the wrong way of looking at it, argues NAA’s Murray.

 
“People say, how are we going to compare the old numbers to the new figures,” he says. “We’re going to have to let go of the past to embrace this. The bottom line of it is that this is a path that looks at both where we are now and to the future – and doesn’t look into the rearview mirrors.”

The rules, ABC directors say, were crafted with plenty of buy-in from advertisers and agencies that together hold two-thirds of the voting seats on ABC’s board and newspapers, which have representatives on one-third of the seats.

 
“Nobody should assume the board convenes for dinner one evening and hatches some self-serving new rules,” says Kirk Davis, president and COO of GateHouse Media. “The governance process within ABC is intense and commendable. The board and various committees spent over two years crafting the new framework for reporting newspaper media across multiple platforms. The balancing act comes down to safeguarding the trust and confidence of rules and reporting that evolved over generations with the social changes in media habits and consumption that we’ve seen in recent years.”

The market would have the ultimate veto if the new standards did not strike that balance, Davis adds.

 
Because of the long drafting process, advertisers know what they’re getting, and they like it, says J.C. Penney’s Davidson: “We have involved so many advertisers and agencies in these task forces that I don’t think this will be a surprise to anyone.”

Advertisers should be happy, adds ABC president Lavery: “This gives them the transparency and accountability they haven’t had before.”

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