ABC Clears Up 'Confusion' on Sampling

By: Michael K. Moran When the Audit Bureau of Circulations uncovered problems at a few newspapers last year, the board of directors strengthened ABC?s audit procedures. The changes, along with modifications to rules and bylaws, were designed to place greater emphasis on circulation accountability and reinforce the integrity of ABC-audited information.

Among the procedural changes was the expanded use of ?discovery? sampling for subscriptions and single-copy sales. Given the increased attention everyone is paying to circulation, this has understandably become a hot issue for our publisher members. Some have expressed concern over ABC?s intrusion at the subscriber level, as well as apprehension about increased audit length and cost.

As head of auditing at ABC, I?d like to clear up some of the confusion. For purposes of this column, I will focus on the testing of subscribers -- the area of greatest member concern -- not single-copy sales.

First, a word about what discovery sampling is -- and isn?t.

What Discovery Sampling is:

? It is a tool designed to address audit risk factors and probe for potential errors.

? It is used as an external check of internal records.

? It is an economical, effective form of subscription verification.

In discovery-level testing, ABC contacts a small sample of subscribers and asks three straightforward questions: ?Did you order the publication? Did you pay for it? Did you receive it?? It is that simple and unobtrusive. Most calls are completed in about a minute. To date, more than 90 percent of the subscribers we have contacted during this process have readily answered these basic questions.

What Discovery Sampling is not:

? It is not projectible ?- meaning ABC does not statistically project problem findings at the discovery level onto a publication?s total average paid circulation.

? It is not intrusive to subscribers; ABC does not inquire about payment amount or personal financial information.

? It is not appreciably time-consuming or costly; on average, discovery sampling adds approximately 8% to the length and 6% to the cost of a typical daily newspaper?s audit process.

? It is not inevitable that discovery testing leads to circulation deductions; in fact, in 95% of the major metro newspaper audits completed under the new 2004 procedures, no expansion of the audit was necessary -- and the average error rate we found was only 3/10 of 1%.

Levels of Subscriber Testing Used by ABC

There are two basic levels of subscriber testing. The first, ?discovery,? tests a small sample of subscribers (typically 100) to determine if problems or errors exist that might warrant further investigation. If no problems are encountered during this process, ABC does not do any further testing at the subscriber level; we simply continue to examine the newspaper?s records as a normal course of the audit.

If the discovery test suggests problems, the ABC audit team must decide whether or not to expand the scope to include ?projectible? subscriber testing. This is a statistically valid audit procedure in which ABC contacts a larger pool of individuals (typically 300-500) in an attempt to verify the publisher?s subscription records. We confirm that each subscription was ordered, paid for, and delivered. Claims that are not verified by the ABC test -- referred to as ?no goods? -- may result in projectible deductions to the total average paid circulation.

ABC uses projectible subscriber-level testing only when problems or errors are discovered during an audit. As an audit methodology of last resort, it can be time-consuming, costly, and complex.

Implementation of Discovery Sampling

Discovery sampling at the subscriber level is now standard procedure in the 75 largest markets for ABC newspaper members with circulations exceeding 200,000. It is also employed when a publication?s audit history suggests its use is warranted. In all, discovery sampling will impact about 125 of ABC?s nearly 1,500 member newspapers. Those with 2004 audit periods that ended on Sept. 30 have already been through this procedure.

The ABC Audit Process

ABC provides the two critical components of the print media buying and selling process: credibility and comparability. Our audit standards, including subscriber-level testing, are needed now more than ever.

It?s important to recognize that discovery sampling of subscribers is an unobtrusive, effective way for ABC to discern if potential problems exist and, if so, to determine if we should further examine the subscriber base. We believe this is a reasoned and reasonable approach to circulation auditing in today?s climate. Advertisers are demanding circulation accountability and credibility from the publications in which they advertise; discovery testing is one of the tools ABC uses to ensure that.