When BusinessWeek announced last month that its circulation would be audited by BPA Worldwide-in addition to the Audit Bureau of Circulations-the news may have said less about the McGraw-Hill Cos.' title than it did about the state of print publishing and the growing competition between BPA and ABC.
"This is a shot across the bow," said Robert Crosland, managing director of media investment bank AdMedia Partners. "This relates to something [BusinessWeek ] wants from ABC that they're not getting. Clearly, there's a rift."
"I think it's a great coup for BPA," said Tom Kemp, managing director of Veronis Suhler Steveson. "To have one of the leading broad-based business magazines in the world do a BPA audit, it's a tremendous success for BPA."
Tom Masterson, BusinessWeek's VP-worldwide circulation director, took pains to say the magazine was not dissatisfied with ABC. He said the main issue in the magazine's adopting the unusual dual audit structure was speed. "We want to see the speed of auditing move into the 21st century," he said. "The system is really 75 years old."
He pointed out that an ABC audit can lag 18 to 24 months behind the circulation information. BPA, on the other hand, says that 97% of its audits are completed within six months.
Masterson said BusinessWeek's concern about audit speed has little to do with gaining a competitive advantage over direct competitors such as Fortune or Forbes. Instead, he said that quickening the pace of audits is a necessity for the magazine industry as a whole. The print auditing process lags well behind audience measurement for other media. Television's Nielsens, for instance, are available the next day, and the Internet, of course, provides almost instantaneous feedback.
That BusinessWeek's announcement comes on the heels of circulation flaps at a handful of newspapers and Ziff Davis Media's PC Magazine-all of which are ABC audited, and some of which had their improprieties uncovered by the audit organization-has led many in the industry to conclude that these scandals had a bearing on BusinessWeek's decision. Without pointing a finger at ABC, Masterson said the scandals have damaged print's credibility. "The situation we're in is very much like Enron and Sarbanes-Oxley," he said. "The game has changed. We need to grapple with that fact, and we need to find ways to speed up the disclosure."
BusinessWeek's decision unfolds against the background of BPA's aggressive campaign to gain more consumer magazine auditing business. For decades, BPA and ABC had been content to own what have amounted to parallel monopolies in circulation auditing, with ABC dominating consumer magazines and newspapers with paid circulation and BPA handling trade magazines with controlled circulation.<p>
"A monopoly is not a good thing," said Glenn Hansen, BPA president-CEO. "Competition breeds better service in the long term."
Hansen traced BPA's increased attractiveness to magazines and media buyers to rule changes it made in 2000. These changes primarily affected disclosure of sponsored, partnership, membership and loyalty subscriptions "from copy one," not at a certain percentage threshold, as ABC had done, although it has altered its regulations in recent months.
ABC responded to BusinessWeek's announcement with a statement by Michael Lavery, the organization's president-managing director: "While we disagree with the need for this redundancy, we respect BusinessWeek's decision. ... As the leading circulation auditing organization, trusted by publishers and advertisers for more than 90 years, the Audit Bureau of Circulations and its members are confident in our audit process and the steps we're already taking to bring increased clarity and accuracy to the industry."