And Now a Word about 'Sponsored' Sales: ABC Clarifies Contentious Circ Rule

At a time when media planners and print buyers are combing through circulation audit reports with a fine tooth comb, the Audit Bureau of Circulations (ABC) continues to refine and redefine the meaning of magazine subscribers. During a recent meeting, the ABC board addressed an array of complex and, to some, seemingly arcane rules, including how publishers should treat so-called "sponsored sales" in the contentious "paragraph 4B" section of its publisher's statements.

Sponsored sales are subscriptions sold by magazines in bulk to be distributed in public places like waiting rooms and reception areas, and like many areas of the ABC's publishers statements, have grown much more interpretive by planners and buyers who are using the reports to divine the value of a magazine's audience to advertisers.

But while the ABC is just now considering mandating that all such copies be identified explicitly on its publisher's statements, rival auditor BPA Worldwide is saying, "What took you so long?"



"BPA has for years required that consumer magazines report all sponsored subscriptions," said BPA Worldwide President-CEO Glenn Hansen in a statement.

As part of a wide-ranging announcement on Monday detailing actions taken by its board, the ABC announced that it is considering eliminating any minimum reporting thresholds for those classes of circulation falling into the category of sponsored sales.

That would mean that publishers would have to disclose every copy of magazines sold through sponsorships, partnerships, clubs, or any sort of loyalty program. In the past, such subscriptions only needed to be disclosed if their numbers reached a certain threshold level.

The BPA says that it has always listed all subscriptions derived in this manner.

Hansen's comments were among several shots fired at ABC's recent methodology overhaul, which he says is well overdue. "We congratulate ABC for adopting more stringent reporting standards, in line with those already in existence at BPA for nearly four years," he said.

He raised the example of a major revamping of BPA rules that took place in October 2000, during which the definition of paid circulation was revised. Hansen claims that ABC revisited its own definitions eight months later.

"Until now, we have refrained from commenting directly about ABC," he said. "However, at this stage, it seems fair to point out in response to press inquiries, that the types of rules and procedures now being implemented by ABC as a result of last week's board meeting are ones that have been firmly in place at BPA for years. In addition, some of these rules emulation predates last week's ABC board meeting."

Hansen went on to point out several examples of what he believes are areas where the ABC took steps to mimic the BPA, including censuring of clients and monitoring deductible third party subscriptions. He also labeled the ABC's process as being slow in general.

"We also have a strong story to tell about the timeliness with which we complete our audits--most are released within six months, not 12 months or longer," he said.

The BPA, which clearly is hoping to paint itself as the more competent player in the space, did credit ABC's audit for bringing to light the recent string of circulation scandals.

In Monday's announcement, ABC announced numerous immediate and forthcoming actions meant to better clarify its policies. With regards to 'sponsored' subscriptions, the auditor also eliminated the requirement that publishers report price and range of sales data in the explanatory paragraph for such sales (those figures will appear elsewhere).

Among other announcements, the ABC discussed adjusting its requirements for newspapers when reporting subscription averages, examining a rule that would require mandatory reporting of five-day or six-day circulation averages. There had been speculation that the board would consider requiring averages for each day of the week. ABC's next board meeting is scheduled for November.

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