MPA Chairman: Clean Up Circulation Practices Now

Speech Delivered as Scandal Spreads

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NEW YORK ( -- With the industry's largest player, Time Inc., currently cooperating with federal authorities investigating impropriety in circulation practices, Jack Kliger, Magazine Publishers of America chairman and president-CEO of Hachette Filipacchi Media U.S., called for the industry to clean up its act.

Jack Kliger is Magazine Publishers of America chairman and president-CEO of Hachette Filipacchi Media U.S.

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Transparency needed
"We need to embrace, not resist, transparency in circulation reporting," he said in a speech that was given to a packed room as part of the MPA's "Breakfast with a Leader" lecture series. "Practices that are unacceptable in any other line of business should certainly not be tolerated in ours.

"Each of us needs to take a hard look at our circulation practices and eliminate anything that has even the potential for being misleading. Simply put, no magazine company should claim that someone has received a copy who hasn't, that someone paid for a copy who didn't, or that someone paid more for a copy than was actually paid."

Circulation scandals have plagued the magazine and newspaper companies this past year as incidents of falsely inflated rate bases have surfaced. Just yesterday, at the UBS Global Media Conference, Meredith Corp.'s President-Chief Operating Officer Stephen Lacy revealed even more subscriptions the Audit Bureau of Circulations said were not qualified in the files of titles the Midwest company acquired this year from Gruner & Jahr USA Publishing. The problems date back to 2003 for mass-circulated titles such as Family Circle, Parents and Child.

Mr. Kliger made it clear that just as important as protecting a magazine's editorial integrity to maintain reader's trust, it is equally important to maintain commercial integrity "if advertisers are going to trust what we say about circulation. And trust is earned through actions, not words. That means publishers need to act on the commitment we've made as an industry to follow the highest standards of circulation reporting."

Audience measurement
He also made it clear that cleaning up circulation reporting and providing transparency for advertisers is different than the connection between audience measurement and distribution and readership.

"It is essential, I believe, that our industry moves to a more timely system of readership measurement -- a system that shows the connection between distribution and readership more effectively," Mr. Kliger said, adding that it's important that magazines are part of the 4A's, ARF and ANA recently announced Audience Measurement Initiative from the beginning.

In order to compete with other media, magazine measurement should accomplish three tasks: Measure reader exposure to print ads and connect that to behavior; provide data in a timely manner with audience accumulation provided on a weekly, not monthly, basis; and develop engagement metrics to demonstrate the strength of engagement leads to measurable results for the advertiser. He dubbed these three objectives ACE, for Accountability, Comparability and Engagement.

Magazine product placement
He also told the audience to remember that product placement is a solution for a problem magazines do not have, that of ad avoidance. "Magazines are not plagued by TiVo or zapping problems, which have lead to TV-commercial avoidance and which have driven demand for product placement by advertisers. Not only do magazine not have an audience-avoidance problem, but quite the opposite is true," he said, citing numerous studies that show magazine readers actually welcome advertising in print, and view it as part of their reading, not an interruption.

Maintaining editorial integrity is essential, he said. "Nothing will be more damaging to that trust and to our credibility than blurring the boundaries so that readers have difficulty distinguishing between editorial and commercial messages."

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