Thursday, June 14, 2007

Advertisers Proposing Changes to Verified Circ

"He who does not have common sense at age thirty will never have it."

BPA Board Rule Changes
By Kristina Joukhadar

At its meeting May 24, 2007, the BPA Worldwide Board of Directors approved rule changes that include such things as the pre-populating of free online subscription forms; membership benefit source rules; penalties for filing incorrect circulation statement claims; non-qualified digital copies; and new quality standards for Associate Members.

Some of the rulings-for example, the number of consecutive issues that must be served to qualify (or verify) a subscription; and the freedom to serve verified circ copies that are not declared on the Publishers Statement-addresses issues being raised by advertisers to ABC (see Karlene's story above).

Continuous vs. Non-Continuous Circulation

The BPA Board has modified rules regarding continuous/non-continuous circulation. Under the revised rule, for circulation to be identified as "continuous," publications must serve recipients at least three months of uninterrupted service, subject to unsubscribe requests and non-deliverable addresses. (Previously, publications with 14 or less issues per year were required to provide six continuous months of service.)

The Board also ruled that up to 5 percent of total qualified circulation may be served less than three months service without further disclosure; anything over 5 percent must be reported as non-continuous circulation on a circulation statement or audit report.

Prepopulation of Online Forms

Publishers may now pre-populate the "yes" category of a free online subscription form after an individual has taken an affirmative action to subscribe on a previous web page or web link. (Prior to this, publishers were not allowed to pre-populate the yes/no option of an online form.)

Membership Benefit Source

Non-paid subscriptions can only be reported as a benefit of membership if the association passes a board resolution stating the publication is a benefit of membership. The association does not need to own the publication. Subscriptions that are purchased by an association for its members shall not be reported as a benefit of membership, but rather as sponsored sales.

Last, deductible and non-deductible membership benefit subscriptions need not be for an "official" publication of the association. The rule change marks a BPA departure from current USPS rules. As a result, publishers with a significant amount of Membership Benefit sources should check with the USPS to ensure their membership benefit subscriptions meet periodical rate criteria.

Non-Qualified Digital Copies

Effective with the June 2007 audit cycle, publishers may begin reporting digital non-qualified advertiser and agency copies and non-qualified paid digital copies (excluding sponsored copies) together with print copies in the same category on circulation statements and audit reports. No other non-qualified digital publication copies may be reported.

Other Noteworthy Changes

Publishers with three years of audit reports requiring adjustment will be subject to a pre-audit process before any circulation statements will be released.

BPA has announced a new service, a Distribution Audit, to verify distribution for non-editorial media such as product listings, wall media, coupon publications and card decks.

BPA offers an Associate Member class for suppliers to the industry. The guidelines will require new Associate Members to provide references of at least three quality BPA experiences before they are accepted into membership.

Advertisers Proposing Changes to Verified Circ

By Karlene Lukovitz

Eighteen months into the new ABC verified circulation category, some in the advertising community are pushing for rule changes at ABC's Board meeting in July, while publishers are maintaining that changes in verified are unnecessary or, at the very least, premature.

During a session on verified at the Circulation Management Conference, ABC President Michael Lavery confirmed that three possible changes to that category will be discussed in July: increasing the required number of consecutive issues served to make a subscription eligible for verified reporting (the current number is two; the number being discussed is six); eliminating the ability to report back copies as verified; and eliminating the ability to choose not to report on the statement some copies that were served, and would fall under verified if reported.

All three proposals originate from media buyer/advertiser concerns about what they term "spiking" by some magazines: adding significant numbers of public place verified copies to the last one or two issues in a period in order to meet average rate base for a six-month period and then, in some cases, not reporting many of the verified copies on subsequent statements.

"We don't think verified is bad. Public place can be a good thing, if it's in the right environment for the particular advertiser," said panelist Jackie Seligman, director of print services, Universal McCann. "But if verified is so great, there's no reason there should be major fluctuations on a month by month basis."

Seligman also said that the current requirement of serving two consecutive issues to qualify for verified reporting is insufficient because it undermines advertisers' goal of buying schedules in order to create a "dialogue" with magazine readers. "Advertisers shouldn't have to pay for publishers doing sampling to get readers," she said.

Publishers, however, point out that incidences of spikes in verified during the first two periods of reporting the category were very limited. (Seligman acknowledged that under a dozen magazines were probably involved, although she added that some were from major companies, and that this was a "red flag.")

Further, publishers stress that the disclosure levels built into verified ensure that buyers and advertisers can see how individual magazines are using verified, so competitive concerns and normal buyer/seller dynamics will deter uses of verified that are questionable in buyers' minds.

Noting that he believes that the marketplace is approaching "natural equilibrium," Hearst Magazines VP, consumer marketing Ken Godshall cautioned against "over-reaction" and advocated that ABC's Board wait to see the results of the June 07 reporting period before determining if verified rules adjustments are necessary.

Publishers view the proposal from some buyers that it be mandatory to report all verified copies served during a period-even if a magazine does not want to declare these for rate base purposes, and is not charging advertisers for this distribution-as a "scary precedent," one marketer told CM.

"Some publishers are objecting on principal, because that's tantamount to telling them how to run their businesses," he says. "Some might want to serve public place copies to help maintain their syndicated readership numbers or to do sampling, but not include these on their statements," the marketer said. "If they're paying out of pocket for this, not selectively reporting these copies on some statements to make rate base, how is this advertisers' concern?"

Some in attendance also questioned the fairness of requiring extensive disclosure for verified copies, but allowing sponsored copies to be declared as paid without requiring disclosure of the amount paid or where they're being distributed. In fact, industry sources report that such concerns are likely to generate a proposal from publishers that at least the public place portion of sponsored be collapsed into verified.

Sources report that there's also likely to be discussion of moving sponsored individual use, and possibly partnership, into the verified category or adjusting their reporting requirements.

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