New circ rules a step forward

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The Audit Bureau of Circulations took an important step forward at its board meeting last month when it granted first passage to a closely watched proposal that would change how newspaper circulation numbers are reported.

There's no question about whether the board should give final approval to the new rules at its next meeting in March. It took two years to come up with even a compromise proposal; there's no reason to delay its implementation any longer. The March board meeting will also be key for magazine publishers, since the board will have the chance to give first passage to sorely needed new rules on magazine circulation.

The new reporting system for newspapers divides paid circulation into three areas: copies sold at 50% or more of the basic price; at 25% to 50% of the basic price; and at any other amount. That last category includes newspapers distributed free to hotel guests. There has been great debate in the publishing industry about the definition of "paid" circulation. Some advertisers are willing to pay to reach consumers who have paid for a newspaper, but don't want to pay (or pay as much) for copies left outside a hotel doorway that may or may not be read. That debate will never be truly resolved; individual advertisers can best decide how audiences are valued. But they can't make informed decisions without access to more detailed data. That's why new ABC rules are needed. Any publisher that resists the rule change would appear to have something to hide.

The same holds true in the magazine industry. In an editorial published in June, we noted that the time had clearly come for "magazine executives and advertisers to own up to the mess the circulation side of the publishing equation has become." Part of the suggested solution was to change ABC rules to give advertisers better circulation information, such as the average price paid for subscriptions and subscription renewal rates. Some publishers have resisted such changes; they want a subscription counted as paid regardless of price. All that allows publishers to do, however, is to continue to maintain rate bases at artificially high levels through deep discounts.

The signs are increasingly evident that 2001 will not set new records for growth in ad spending. The publishing business has two revenue streams, and those publishers that focus now on circulation quality and profitability will remain strong even if the bottom falls out of the ad market.

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