Sunday, September 23, 2007

Impact of ABC/BPA Auditing Changes

Impact of ABC/BPA Auditing Changes
By Kristina Joukhadar

Yesterday's ABC/BPA Update session at FMA Day in New York opened with a question: how have auditing rule changes over the past five years impacted circulators? This led to an animated panel discussion involving ABC president and managing director Michael Lavery, BPA Worldwide president and CEO Glenn Hansen and Nina LaFrance, group circulation director, Forbes Inc.

Change in the 50 Percent Rule

The 2001 change in the 50 percent rule [the ABC requirement that for a copy to qualify as "paid" it must be sold for at least 50 percent of the basic price] to paid at any price was significant, said Lavery, but "it didn't cause the sky to fall."

LaFrance pointed out that ever since the change in the rule, there has been a profound change in the way circulators do business. It had an impact on the use of Public Place and Sponsored circulation-particularly because the change took place at a time when technology advertisers were actively pressuring publishers to increase rate bases in order to drive advertising sales, she said.

Use of Verified Circ

What about the effect of the ABC Verified circ category, which was initiated in January 2006 for inclusion on June 2006 Publisher Statements?, asked moderator Lynn Reinicke, VP, chief of staff, CDS.

The volume of Verified circ has not really changed since then, said Lavery. Verified has been reported for 230 titles, totaling about 14 million subscription copies. This represents about 7 percent of total subscriptions or 4 percent of total circulation.

Whether the volume of Verified used has changed or not, there is a fear in the industry that some advertisers will not accept these copies as part of the rate base. So far, agency spokespeople have said that some Verified circ is acceptable, as long as it is not used specifically to make rate base.

Fluctuating levels of verified circ on an issue-by-issue basis has been flagged as a particular problem.

What About B-to-B?

In b-to-b publishing, there are only two buckets, said Hansen, "paid and nonpaid." It's like a pendulum, he said, with paid direct by consumer moving to one side and everything else being pushed to the other (like sponsored, nonpaid, verified and controlled).

Hansen pointed out that there is an opportunity here to help sales people talk to media buyers about the makeup of a title's circulation-to demonstrate the vitality of the audience. "Why worry about how you got the eyeballs if you can identify who they are and why you have the right audience?," he asked.

He added that if the audit report contains "one little line [to define a type of circulation]," it can be "dismissed out of hand." You need to explain in demographic terms who the audience is, so the media buyer "gets it."

Quality of the "Eyeballs"

It's similar in both b-to-b and consumer, said LaFrance, who has worked in both. "You watch the consumer circulation marketers struggling with free circulation as 'qualified.'" It goes back to the evolution of Verified, she said. Whether it's consumer or business [circulation], the importance is the quality of the reader, their match with the content and responsiveness to the advertising message.

The business is moving there, said LaFrance. "The characteristics of b-to-b and consumer audiences are blending. In consumer, paid circ has been the be-all metric, and now in dealing with Public Place, it's a culture change."

Circulators Need to Educate Others

On the consumer side, circulation has been sold on the basis of paid circ and not on other factors," said Lavery. Public Place and Verified circ have value and extend reach. Circulators need to talk about the value of Verified circ and give voice to explain the business tactics for using this type of circ over other channels, he said.

No comments: