NEW YORK (AdAge.com) -- Following scandal and scrutiny at some companies that sell subscriptions for consumer magazine publishers, BPA Worldwide has introduced a certification program for such third-party agents.
But the hook for agents and publishers may be the clean bill of health now on offer.
All kinds of circulation practices have been under the microscope for several years, going back at least as far as the 2003 revelation that Gruner & Jahr USA had overstated newsstand sales for the now-defunct Rosie magazine. The newspaper industry became embroiled the following year, when the Tribune Co.'s Newsday and Hoy admitted fraudulently inflating their circulations.
Last July, the Audit Bureau barred publishers from counting circulation as "paid" if it derived from a subscription-sales agent, such as Ebsco Consumer Magazine Services, or a sponsor, such as InFlight Newspapers and Magazines, because of inadequate record-keeping, non-payment and other infractions. (Sponsorship agents buy magazines in bulk for distribution in public places, like doctors' offices, or to groups of selected readers.)
In September, Time Inc. said it had received a federal subpoena seeking information about its sponsored-sales programs and that it was complying. The next month, two executives at Bedford Communications' Laptop were charged with trying to fraudulently inflate its circulation through an unscrupulous third party.
The Magazine Publishers of America maintains guidelines on the use of subscription agents, but no verification service was available, said Glenn J. Hansen, president-CEO, BPA. "It struck us that while the guidelines are there, if nobody is checking to see if those guidelines are being complied with, that's an opportunity lost."
Participation in BPA's new program will be up to the agents, which will have to pay an annual fee of about $5,000 to $10,000 in exchange for certification. BPA will audit participating agents annually, examining areas like sales methods, safeguards against deceptive practices, transaction procedures, consumer-complaint resolution and vetting and tracking subcontractors. BPA will not require its member publishers to use certified agents.
The Audit Bureau offers training, references and support services for using subscription agents, but has no plans to introduce a certification program.
That is partly because auditing agents' plans and records may be straightforward, but verifying actual practices in the field is far trickier, said Michael J. Lavery, president-managing director, ABC. Tracking subcontractors also complicates the task, he added. "While the agent may be very diligent about clearing programs through ABC and being very mindful of record-keeping programs that we have trained them against, their sub-agents we find are sometimes not as diligent."