Publishers confront circulation challenge

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[Rancho Mirage, Calif.] Advertising is the primary fuel of the publishing business, but circulation was Topic A at this year's American Magazine Conference, including the debate over how much detail publishers need to reveal to advertisers about how consumers buy magazines.

Media buyers have successfully lobbied for changes that give them more transparency on publishers' circulation reports filed with the Audit Bureau of Circulations. But they are pushing for even more details, and publishers strongly suggested they won't make further concessions without a struggle. At issue is what the industry standard should be for that Audit Bureau circulation data, with which advertisers evaluate the $16 billion they spend each year on magazine advertising in the U.S.

"We are in business, in part, to serve the media buyers," said Thomas O. Ryder, chairman-CEO of Reader's Digest Association and newly elected chairman of Magazine Publishers of America. "But there is a point at which this becomes silly and counterproductive, and we are rapidly approaching that point."

tall order

Of Audit Bureau statements, Mr. Ryder said, "We are being asked to provide more and more information, and adhere to standards that cost us more and more money, and we're getting the feeling we are being asked that so we can be asked to charge less for the advertising we sell."

Interviews with print buyers revealed concerns ranging from more precise reporting on prices paid for subscriptions to where subscriptions come from-whether through direct-mail solicitation, which is viewed by buyers as a desirable channel, or through third-party "agent" sales, which are not.

"Buyers want to know, especially if a magazine is raising their rate base, how they've gotten there"-especially when weak newsstand sales are legion throughout the industry, said Scott Kruse, senior VP-print director at Grey Global Groups' MediaCom, New York. Rate base is the circulation a magazine guarantees to advertisers.

Mr. Kruse said another area of concern was the long lag time between publishers reporting their own circulation figures to the Audit Bureau and the agency's audit of those figures for accuracy. Mike Lavery, Audit Bureau president-managing director, said 85% of its audits are released in less than 12 months, and quicker turnaround is hampered by the 26 weeks it generally takes for titles to determine correct newsstand sales.

wantedness debate

George Sansoucy, senior VP-managing director-print and convergence at Initiative, New York-and a member of the Audit Bureau's media buyer's committee-said a mandate to disclose subscription renewal rates was a key way advertisers can prove a magazine's "wantedness."

"Wantedness," a loosely defined measure of a reader's connection to magazines, is a concept many publishers cannot discuss without eye-rolling if not outright frothing. Dan Brewster, president-CEO of Gruner & Jahr USA Publishing, called it "the most ill-defined notion I've heard in a long time." Publishers don't necessarily believe there is a correlation between the price a reader pays for a magazine and their relationship with it. They also complain that other media such as TV are not held to the same standards of proving connections with audiences.

Not all publishers share those concerns. "We want to give more" data on subscribers, said John Fox Sullivan, president-group publisher of the Atlantic Monthly, which is seeking to get higher subscription prices from its devoted, though small, circulation base. "We got good numbers, and we want to use them." Conde Nast Publications' The New Yorker, similarly, has made its high subscription renewal rates a key factor in its advertising sales.

But the prospect of putting out further details on circulation rankles most publishers, who fear placing confidential business information in the market for competitors to mine. During a panel discussion, Cathleen Black, president of Hearst Magazines, likened buyers' demands to "Coca-Cola telling Pepsi" details about marketing strategies.

buyer perspective

Buyers, not surprisingly, beg to differ. "Very simply, we want to know we're getting what we pay for," said George Janson, senior partner-director of print at WPP Group's Mediaedge:cia.

This new dynamic of publisher resistance and increasing buyer demands will cause observers to closely watch next month's Audit Bureau board meeting. "There are no immediate changes on the horizon or being recommended," Mr. Lavery said. Audit Bureau executives noted that the board consists of marketer, agency and publishing executives, who all have input on any rule changes.

Some publishers place hopes on a massive new readership study being conducted by Northwestern University for Magazine Publishers of America and the American Society of Magazine Editors that focuses on reader experiences.

The study's findings suggest that the most involved reader is not necessarily the one that paid the highest price for the magazine, and that pass-along readers can be just as engaged as newsstand buyers. This study, they hope, could mollify some advertiser concerns without delving into what an MPA executive called "secrets . . . at the heart of how publishers do business."

Still, Ms. Black raised the possibility of publishers trying an entirely different approach. "We don't want to go to [competing auditor] BPA and start this all over," she said. "I don't think that's necessarily the solution."

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