The controversy, surrounding measurement of ad pages in the launch issue of Conde Nast Currency, could result in a change in PIB rules.
AMEX, TIME INC. COMPLAIN
The flap began after American Express Publishing Corp. and Time Inc. lodged formal complaints with PIB and Competitive Media Reporting. The rivals charged Conde Nast did not properly label Currency and therefore could not add its ad pages to the counts of the 15 magazines that distributed the personal finance title to their subscribers along with April issues.
PIB's Advisory Committee agreed and disallowed the 507.9 pages in an April 9 ruling. Conde Nast will appeal that decision and is presenting its case to the PIB Council on April 30.
The council, the court of last appeal on such cases, is chaired by Hearst Magazines Exec VP Robert Brink and includes nine other top magazine publishing executives.
"We believe we have been dealt with unfairly," said Conde Nast President-CEO Steven Florio. "It's paid advertising. It's clearly a supplement. I don't understand how they can not count it. We followed the guidelines they gave us."
`PUTTING IT TO US'
"This is clearly competitors just trying to put it to us," he added.
Although Currency carried only 48 ad pages, each of the 15 titles distributing it counted a portion of the pages based on the percentage of their circulation base receiving the title.
The Currency cover called the magazine a "Supplement to Conde Nast Publications," wording Conde Nast maintains Competitive Media Reporting had deemed acceptable. But the PIB Advisory Committee said Conde Nast would have needed to list the names of all the magazines distributing Currency for each to count the pages.
PIB contracts with CMR to manage the magazine ad page data.
RIVALS CALL IT A TEST
"I don't think those pages should be counted. It appears to be a sampling technique for a new title," said Dave Long, president-media sales and marketing, Time Inc.
"I see Currency as a test to see if a new magazine has legs," he said. "It calls into question the validity of the PIB numbers if we count those pages. [Currency] has nothing to do with any of the magazines carrying it."
Currency is unusual in that it was delivered with 15 titles, rather than just one, as is Forbes' quarterly Forbes FYI supplement.
Stephen Blacker, Conde Nast VP-research, blames CMR for the flap.
"The ruling came about because we were misled by CMR, and the rule itself is an antiquated and nonsensical rule," Mr. Blacker said. "The purpose of PIB is to accurately report ad pages and ad revenue . . . It's destroying the integrity of PIB if it is not going to measure an advertising effort such as this."
WARNING OF REVERSAL
In a Jan. 10 letter to Conde Nast Corporate Marketing Manager Jim Richardson, PIB Manager Patti Varney wrote, "The reference to the `host' publication on the cover will be with the wording, `Supplement to Conde Nast Publica-tions.' " But, the letter continued, "I have OK'd the wording for the cover with the understanding that if this issue is brought before the PIB committee, my ruling could be reversed and credit withdrawn."
Tony Morgano, chief operating officer, American Express Publishing, said Conde Nast was wrong to ignore that warning.
"If you want to take a risk, there is a reward and penalty with every risk," he said. "Now they are understandably not happy with the penalty."
`THEY WERE AWARE'
Wayne Eadie, chairman of the Advisory Committee, and advertising research and development director at Reader's Digest, agreed: "They were aware it did not directly follow the rule. CMR always advised that the wording was open to being contested."
His committee, he said, voted on whether the rule was followed: "It was not our job to decide if the rule was relevant."
Magazine Publishers of America President Donald Kummerfeld said the rule's relevancy will be determined by the PIB Council.
"The one-title rule is clear, but that rule was intended to cover an exclusive supplement. It just doesn't apply easily to a supplement carried in multiple titles," he said. "What kind of rule ought to apply will have to be decided by the council."