Readership Is Important, But Don’t Forget Circ

By: Mark Fitzgerald

Having finally convinced advertisers and analysts to accept readership as the medium’s most important audience measurement, the nation’s biggest newspapers are, ironically, as focused on circulation as they were back in the sales wars of the penny press.

Publishers and circulation executives say they need to drive up the hard numbers of circulation — which measures sales of papers — to boost the research-based numbers of readership. “Circulation matters because circulation and readership combined are powerful metrics for this industry,” said Michael Proebstle, vice president of circulation for Philadelphia Newspapers Inc. (PNI), which handles operations for The Philadelphia Inquirer and the Philadelphia Daily News. “Paid circulation is sort of the gold standard, and readership sort of supplements that.”

This is especially critical now, for as Doug Arthur of Morgan Stanley Dean Witter told E&P, “If newspapers are going to keep raising advertising rates, they can’t keep delivering circulation declines. That dog is not going to hunt forever.”

The dual emphasis on readership and circulation was a constant theme among the executives gathered here for last week’s annual meeting of the Audit Bureau of Circulations (ABC).

Robert W. Althaus, vice president for circulation at Gannett Co. Inc., left no doubt about the priority readership has at the nation’s largest newspaper chain: “Certainly, net paid [circulation] is important to us, but we think readership is the key metric that tells us how people use the newspaper.” Gannett, he added, targets circulation efforts in ways that increase the size and frequency of readership.

Circulation growth is even an issue for Denver’s two dailies, which have been deliberately shedding much of the circ they gained during their now-ended newspaper war. Kirk McDonald, CEO and president of the Denver Newspaper Agency, which runs business and production operations for The Denver Post and the Rocky Mountain News, said the two papers have been focusing on boosting home-delivery numbers to keep up their household penetration, which at 52% during the week and 65% on Sundays are the highest among U.S. metro dailies. The agency wants to keep high paid circulation in certain zones even as the papers’ combined daily circulation, according to their latest publisher’s statements, shrinks to 610,009 from about 789,000 at the height of the competition.

The renewed focus on circulation growth reflects two factors: A long-term decline in circ that many publishers worry could be permanent and recent ABC rule changes that allow newspapers to count more copies in their top-line net-paid-circulation number. Among other changes, ABC now allows publishers to count as paid circulation copies purchased at a discount of 75%, copies sold as part of admission to a sports or entertainment event — and even copies included in the monthly rent for an apartment.

ABC itself has been expanding its services into the readership area by auditing the standards of audience-research reports. ABC members met days after the Schaumburg, Ill.-based organization’s latest FAS-FAX report for the six months ended Sept. 30 showed a general loss in circulation punctuated by dramatic gains by a few big papers. According to a Newspaper Association of America analysis prepared by New York-based Scarborough Research, the combined daily circulation of the 807 papers reporting was down 0.3% and Sunday circulation was down 0.4%, compared with the same period a year ago. The very largest papers, the dozen metros with circulations greater than 500,000, managed a combined circulation gain of 0.3%, while circulations were down in every other category.

Certainly, there were a few high-profile daily winners in this reporting period (to see the Top 20 lists, click here). The Dallas Morning News saw healthy gains both weekdays and Sunday. The New York Post, which looked likely to fold only a few years ago, has increased circulation 35% the past two years. With a cover price of 25 cents, the Post sells for half the price of its rival tabloids, the Daily News and Newsday, and 50 cents less than The New York Times. Post Editor in Chief Col Allan, though, credited its editorial product, its new color presses, “and, above all, attitude,” as being “at the heart of the success.”

The Philadelphia Inquirer‘s turnaround this period was not as large, but it was just as significant following several consecutive years of circulation decline at the Knight Ridder paper. PNI circulation chief Proebstle said a key reason for the jump was a continuing campaign of discounted home-delivery offers, averaging 25% to 33% of full price. While newspapers usually try to move subscribers up to full price, the Inquirer is keeping some subscribers at the discount level on a long-term basis. The paper also moved 19% of subscribers to its auto-pay program from 4% in 1999, and added suburban single-copy outlets. Overall, Knight Ridder papers in the top 75 markets grew daily circulation 1.2% in the latest FAS-FAX.

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