Circ 'Elephant' Raises Its Ugly Head

By: Jennifer Saba At the first go-around it seemed that Thursday's panel session in New York hosted by the Audit Bureau of Circulations on "Surviving the Re-shaping of the American Advertising Business" was going to be one softball question after another. But then the "500 pound elephant" walked into the room.

Moderator David Verklin, CEO of Carat Americas, one of the country's largest media services company, started the discussion on the 15th floor of Bloomberg in mid-town Manhattan with glowing intros for each of the six panelists including Jason Klein, president and CEO of the Newspaper National Network. It didn't take long, however, for Verklin to get down to business.

Not 10 minutes into the discussion, Verklin brought up the "500 pound elephant in the room" and directed the following question to Klein: Have the circulation scandals affected advertising?

"I don't think there will be much of a backlash," Klein responded.

Klein also said that the newspaper industry at its core is about editorial values that permeates the entire business and that the misstatements have been the biggest shock to the companies themselves. Klein went on to say that he recently met with Tribune Co. Chairman, President, and CEO Dennis FitzSimons and that FitzSimons was spending most of his time on this issue.

Verklin then directed the same question to panelist Linda Thomas Brooks, executive vice president and managing director of General Motors Mediaworks. She took a different stand with her answer: "I think this is real black eye to the industry."

Brooks went on to explain that she was hearing from many people that recent circulation miscounts (which have affected the magazine industry too) only gave a bit more validity to the old adage that 50% of advertising dollars are wasted.

She applauded the industry and ABC for putting more frequent audits in place but added: "That's one statement of confidence, but there needs to be more of those."

The question was also directed towards Nina Link, president and CEO of the Magazine Publishers of America. She stressed that the industry needs to move on and that it needs to focus on other measurements in addition to circulation, such as readership.