Making sense of circ game

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A year ago in this space, we bluntly urged magazine publishers and print advertisers to confront "the mess the circulation side of the publishing equation has become." To their credit, both have stuck with the issue despite the distractions of today's tough economy. Earlier this month, through the Audit Bureau of Cir-culations, they took a hopeful step forward by finalizing new rules for reporting "paid" circulation.

As with a similar set of new ABC rules that redefine what constitutes "paid" newspaper circulation, the new magazine rules reflect the tensions between publishers, who feel compelled to produce artificially big rate bases for advertisers, and advertisers, who nevertheless want the "quality" readership that paid subscriptions imply. This has bred an unhealthy situation where profit has been leeched out of the circulation side of publishing while publishers at the same time have tried to obscure their circulation-building tactics from advertisers.

It was not easy to get this far, and there no doubt will be critics of the new plan among advertisers. Publishers get some relief from the standard in the previous ABC rules specifying that only subscriptions sold for at least 50% of the basic rate can be counted as paid. In exchange, ABC statements will provide print buyers more complete information about what subscribers are actually paying.

While changing the details of the ABC rules can be helpful, the circulation quandary publishers and magazine advertisers face is bigger than how things are reported on an audit form. Magazines are not just imagining that there is pressure to report bigger and bigger rate bases. They're reacting to the many ad buyers who see robust circulation, no matter how costly it is to acquire, as a measure of health, and rate base reductions as a sign of weakness.

The real cure is for advertisers to give publishers their support when they try to charge a fair price for their magazines, even if that means letting circulations settle to levels that are both sustainable and profitable.

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