Buyer skepticism grows amid circ woes

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The circulation scandals that continue to dog print media threaten to further slow a long-in-coming ad turnaround at newspapers and magazines and raises questions about the Audit Bureau of Circulations, the industry-standard for circulation measurement.

"There's never been a point where so many [publications] have come out and indicated they're completely off on their estimates," said Dan Binder, media director, Two by Four, Chicago, who's spent a quarter-century in advertising.

Revelations about circulation overstatements at Tribune Co. newspapers Newsday and Hoy and false statements made by Hollinger's Chicago Sun-Times were topped off by last week's news of a lesser glitch from Gruner & Jahr USA Publishing's Parents.

According to a mid-June memo from new G&J President-CEO Russell Denson, that title sent an unidentified number of subscribers issues beyond expiration dates, an Audit Bureau no-no. Executives inside and outside the company, though, said this affected well less than 1% of the title's 2.2 million circulation-or less than 22,000 copies-which led one media buyer to dismiss the difference as immaterial. Still, circulation shenanigans are a sore spot at G&J, which last year admitted to substantially overstating circulation at both YM and Rosie.

"It leaves a lot of skepticism on the buying side," said Robin Steinberg, VP-director of print services, Starcom MediaVest Group's MediaVest, New York. "Very disappointing, especially after the G&J blowup" of last year.

Audit Bureau audits uncovered most of the problems that made news last week-with the notable exception of the Sun-Times, which led to the Audit Bureau revoking its most recent audit of the newspaper's figures.

Earlier this month, Tribune admitted to overstating daily circulation figures for the six months ending last Sept. 30 over 7% at Newsday and around 19% at Hoy. The Sun-Times, without specifying, admitted to significant overstatements over a multiyear period.

Michael Lavery, Audit Bureau president, pointed out that the firm did not conduct "forensic fraud audits." In the event of what he termed "a circumvention of our rules and reporting by way of collusion," he said "the audit will catch them. But it may not catch them immediately."

Jack Fuller, president, Tribune Publishing, said the company was not yet sure of the cost of its ad make goods owing to the Newsday and Hoy situation, but expressed confidence that marketers were not pulling back from the chain's 13 daily papers: "That's not what we're getting back" from advertisers, he said at last week's Mid-Year Media Review.

Some discontent over the role of the Audit Bureau has surfaced from the media side. Kent Brownridge, general manager, Wenner Media, which publishes Rolling Stone and Us Weekly, bluntly said he was "investigating an alternative to [the Audit Bureau]." He said he'd yet to find any other partners to help launch such a service, but suggested the nitty-gritty could be done by a top accounting firm like PriceWaterhouseCoopers.

Part of Mr. Brownridge's desire for a new measurement system can be attribute to sour grapes, as he readily admits; he was turned down for a spot on the Audit Bureau advisory committee. He expressed frustration with the length of time it takes to get audits completed-around a year, which is faster than they've been in the past-as well as the labyrinthine nature of Audit Bureau regulations and bylaws.

Told of Mr. Brownridge's comments, Mr. Lavery said, "It's interesting. On one hand we're criticized for lag times, and on the other there's an expectation of forensic audits."

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