WSJ And USA Today Wage Circulation War (Of Words) p.8

By: Robert Neuwirth WSJ issues a report claiming circulation figures 4.1% higher than those of ABC auditors.
USA Today says if it used similar methods, it could report a circulation of 2 million plus.
By ROBERT NEUWIRTH
A RECENT REPORT on circulation has opened a rift between the Wall Street Journal and USA Today, America's two leading national newspapers.
In the first salvo, the Journal issued what
it called a Statement of Total Circulation, detailing the number of full-price, cut-price and even free papers it distributes. The Journal's statement, released July 21 and first disclosed in Advertising Age, covers the same period as the Audit Bureau of Circulations' March 31 report. It evaluates circulation by category, details discounts for students, and quantifies reduced price copies sold through airlines, hotels and car rental agencies.
The statement, certified by accounting firm PricewaterhouseCoopers, puts Journal circulation at 1,895,700 ? 4.1% more than reported in ABC's Fas-Fax. The difference is largely due to 75,000 free and highly discounted copies that are counted as circulation in the Journal's in-house report, but are not approved by ABC.

Journal Critical of ABC
"The Audit Bureau of Circulations exists for one reason and one reason only ? to provide information for advertisers," said Paul Atkinson, Journal vice president, advertising. "It should evaluate the quality of circulation. I don't think ABC does that today."
ABC's arcane rules often serve to obscure and mislead advertisers, Atkinson said, citing a significant percentage of USA Today copies sold at a deep discount ? a fact advertisers wouldn't know without reading a footnote to the audit report. In a 1998 audit, for example, ABC reported USA Today's paid circulation as 1.6 million ? but the fine print disclosed that 225,000, or 14%, was made up of single copies sold at half price through institutions.

Journal Whacks USA Today
Though Atkinson cited Gannett Co.'s national daily as a major offender, he insisted the Journal, a Dow Jones subsidiary, was not at war with USA Today.
But the Gannett Co. paper reacted with scorn, noting the Journal's new number includes copies sold at prices below the ABC 50% discounting threshold.
"It is just strange that in the summer of 1998 this has come up," said Thomas Curley, USA Today president and publisher. "Maybe this says that the 50% rule doesn't work for the Journal."

USA Today Whacks BACK
Curley added that the Journal was guilty of some of the same practices it was criticizing. For instance, according to a 1997 ABC audit, the financial daily sold more than 91,000 copies through third parties, mostly corporations that provide them to their employees and executives. Though most papers would not be able to claim these sales in their paid-circulation numbers, Curley noted that the Journal can do so because of a 70-year-old ABC rule approving group sales.
The ABC audit also revealed that 341,000 copies of the Journal ? 18% of its circulation ? were sold at a discount, either using the inducement of premium items or through special low rates for students.
"Their form left out a huge category," Curley charged, and was hardly full disclosure.

USA Today: 2 Million Plus?
Further, if USA Today issued a report similar to the Journal's, it could claim to be the nation's largest-circulation daily. Under ABC rules, some 400,000 copies sold in bulk to hotels and other institutions cannot be counted as paid circulation. But, adding them into the paper's daily totals,
USA Today's circulation would vault over 2 million.
An ABC representative said it was not unusual for member papers to add supplemental materials to audit reports as they make presentations to advertisers. But the dispute between the two national papers comes as ABC has faced increased pressure to deviate from its long-held paid-circulation standard.
u The ABC board recently announced that it would consider creating new auditing protocols for Canada that could include measuring deeply discounted and even free distribution.
u For the past year, large and small papers have been duking it out over pricing rules that would have allowed deep discounts (up to 75% off base rates) to designated market segments. In a compromise, the segment rules were approved but the extra discounting plan was scotched.
u ABC has announced that it is investigating auditing readership, rather than circulation, and the Newspaper Association of America is also moving to assess readership.
Curley said ABC has also been considering whether to permit newspapers to sell papers to apartment owners and co-op/condo boards ? allowing the papers to become a perk that is bundled in with monthly rent and maintenance payments. If ABC were to allow these copies to be counted as paid circulation, many major metropolitan dailies could benefit.
Nonetheless, Curley admitted that "papers have done some goofy, short-term things" to puff up their circulation numbers. In one recent maneuver, some papers successfully petitioned ABC to allow mass sales to people attending local fairs and staying in area hospitals to be counted as single-copy sales.
But the Journal wants ABC to take a closer look at all circulation ? requiring newspapers to report such unflattering statistics as churn rates. That's one category where the Journal looks good. Its new report says 80% of its subscribers renew each year. "It's not a terrible thing to say you have churn," Atkinson said. "Let's at least put the facts out there."
And Dow Jones spokesman Dick Tofel urged ABC to encourage full disclosure. Said Tofel, "Every newspaper in America has these numbers. It's a question of whether you want to tell it to your advertisers or keep it secret."
?(The Wall Street Journal and USA Today are locked in a war of words over circulation claims and counterclaims. ) [Photo & Caption]
?(Editor & Publisher Web Site:http://www.mediainfo.com) [Caption]
?(copyright: Editor & Publisher August 15,1998) [Caption]