ALL THE NEWS FIT TO DISCOUNT - Of all the media planning issues circulating around print departments these days, none seem to loom so large as, well, circulation. It's not that there hasn't
always been a great deal of discussion, debate, finger-pointing, interpretation, and obfuscation surrounding print circulation reports. It's just that an unusual amount of highly public circulation
screw-ups have come to light. And they just so happen to be alighting at a time when corporate governance is high on the agenda at most major advertisers, and client scrutiny has grown acute within
most media shops. In other words, it's not something that can be ignored, swept under a carpet, or deferred through a series of committee meetings. It's something advertisers, agencies, and publishers
have to tackle head on.
Interestingly, the company that most likely triggered the heightened scrutiny over circulation audit reports, consumer magazine publisher Gruner + Jahr, appears to have
gone the farthest in taking the issue on and establishing procedures and protocols that will ensure ultimate compliance. It hopes these measures will erase any doubts in the minds of advertisers and
agencies. But G+J's inadvertent disclosure of inflated circulation estimates, which only came out because of the testimony surrounding its highly publicized legal battle with former celebrity editor
Rosie O'Donnell, has essentially opened what appears to be Pandora's box for the circulation business. It has raised the consciousness of other consumer magazines, led to fundamental changes in the
practices of many major publishers, and led to changes at the organization charged with making sure the media always tell the truth, the Audit Bureau of Circulations.
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But the most recent round of
circulation exposés involving major daily newspapers have the entire industry spooked and could severely damage the credibility of the print medium, at a time when it already is struggling to
counter an erosion of readership, especially among the youngest and most sought-after readers. In a research note sent to the securities firm's clients today, Merrill Lynch's Lauren Rich Fine
acknowledged, "Circulation has always been a hot topic within the newspaper industry and among newspaper investors but, as far back as we can remember, never with this level of intensity."
To
further the irony, Fine noted that, "The newspaper industry has always conducted itself in a manner such that it would never be the topic of a news story." But that's just what the circulation
behavior of three major publishers involving four newspapers has disclosed.
Nonetheless, Fine said it was unclear whether these were just periodic anomalies uncovered during a heightened period
of scrutiny, or part of a more systemic pattern within the newspaper industry.
"It is hard to have a strong point of view regarding the likelihood of more disclosures as the first few were so
surprising, especially in view of the high level of integrity at two of those companies," she wrote, adding, "Even in the cases of the companies that have made disclosures, it is hard to quantify the
economic impact as only discrete categories of advertising are purchased on a straight relationship to circulation. Yet, we live in a litigious society and lawsuits have been, and are likely to be,
filed."
Fine's report provides a trove of data on newspaper circulation trends, including one that could potentially open up a whole new source of discussion for print media planners, who have
grown acutely interested in the average price magazine readers pay for the magazines they buy as a potential metric for valuing the quality of the magazine's readers. While a number of magazine
industry experts have sought to debunk the theory that there is any correlation between the price readers pay and the level of involvement they have with the magazine they read, the thought lingers
within media planning groups, which have become obsessed with means of determine consumer "connections" to media
For some reason, the debate has not been extended to newspapers. We don't hear a
lot of buzz about the price paid by newspaper readers as some indicator of the value they hold for the papers, or their level of involvement with the publications. Maybe that's because some of the
papers that are most prone to discount (see table below) are among the most elite publications, including national papers like USA Today, The Wall Street Journal and The New York
Times, and because much of their average price discounting comes from giveaways to high-rollers traveling in business class, frequenting blue chip hotels, or dining at power breakfast eateries.
Though the Riff has observed some half-price discounting of the Times going on to pedestrians outside New York's Port Authority bus station too.
Share of Daily Copies Sold at 50
Percent or Greater of Basic Price
Owner Newspaper 50% or Greater
Pulitzer St. Louis Post Dispatch
94.9%
Scripps Commercial Appeal 94.6%
Tribune Chicago Tribune 94.5%
McClatchy Sacramento Bee
93.7%
Belo Dallas Morning News 92.8%
Gannett/Knight Ridder Detroit Free Press 91.5%
Journal Communications Milwaukee Journal
Sentinel 91.4%
Lee Enterprises Wisconsin State Journal 90.1%
Lee Enterprises North County Times 89.8%
Knight Ridder
Philadelphia Inquirer 88.4%
McClatchy Star Tribune 87.5%
Knight Ridder El Nuevo Herald 86.7%
Scripps
Rocky Mountain News 86.5%
Washington Post Washington Post 86.4%
New York Times Boston Globe 85.7%
Tribune
Newsday* 85.6%
New York Times The New York Times 85.1%
Tribune L.A. Times 82.7%
Journal
Register New Haven Register 80.0%
Knight Ridder San Jose Mercury News 77.2%
Knight Ridder Miami Herald 76.0%
Dow Jones Wall Street Journal 69.6%
Gannett USA TODAY 53.8%
Source: ABC. Merrill Lynch Equity
Research. *Newsday results represent figures for the six months ending September 30, 2003.
JUST FOR THE RECORD - As far as the Riff's concerned, the "summer season" officially ended
Aug. 9, the day we got back from vacation, and began covering the networks' shenanigans over exactly when the "official" summer season ends.