• by adam.m , Michael Deibert , July 20, 2005

In a move that disqualifies the paid subscriptions of scores of publications, the Audit Bureau of Circulations (ABC) Tuesday said its board voted to censure two third-party sales agents for consumer magazines and newspapers. The move is part of an effort by the ABC, the print industry's circulation watchdog and the source for circulation estimates that are the basis of print advertising buys, after a spate of high-profile circulation misstatements involving newspapers and magazines diminished the industry's credibility in the eyes of print advertisers and agencies. As part of new steps it is taking to add rigor to its circulation auditing process, the ABC said its board voted unanimously during its July 13-16 meeting to tighten rules governing how third-party consumer magazine sponsor programs qualify as paid circulation.

From January 2006 onward, publishers must receive payment for ads run at a qualifying price "net of all other considerations, such as agent marketing and distribution fees." The ABC also voted to require that all magazine subscription sponsors sell their products directly to consumers, thus narrowing the definition of that type of sponsorship.

The decision comes after the ABC censured EBSCO Consumer Magazine Services (ECMS), a subscription sales agent, for improper record-keeping in March of 2005, and at this month's meeting disqualified the circulation claimed as paid from ECMS sponsorship programs due to lack of qualified sponsors and a lack of payment. The ABC also recently disqualified the circulation of sponsorship programs managed by InFlight Newspapers and Magazines Inc., as InFlight didn't pay publishers for copies of the magazine in which its ads appeared.

The EBSCO and InFlight brouhahas were just two of several recent circulation scandals. In June 2004, it was revealed that the New York daily newspaper Newsday and its Spanish-language sister publication Hoy had been overstating their circulation by several thousand copies per issue. Three former circulation managers were arrested by federal agents and charged with criminal fraud last month, having allegedly worked with distributors to falsify circulation numbers. Two Gruner & Jahr magazines, the defunct Rosie and YM, faced similar circulation scandals.

The 4,000-member ABC is ranked as the largest circulation-auditing organization in the world.