• by Michael Shields , December 3, 2004

Auditor BPA Worldwide is considering increasing the level of detail in its auditing statements with regard to which subscriptions are paid for, and by whom.

As a result of a board of directors' vote last Thursday, the BPA is discussing revamping its reporting format for the category of sponsored subscriptions--i.e., subscriptions paid by a third party. The proposal will be reviewed by BPA's membership over the next six months until a final decision is voted on during its May 2005 board meeting.

Currently, sponsored subscriptions are categorized either as part total qualified paid circulation or qualified non-paid circulation.

If the BPA's proposal passes, audits going forward would include a third reporting category for all sponsored subscriptions, regardless of whether they are paid or not.

Under this scenario, a third line item would be added to the "Average Qualified Circulation" found on auditing statements' page one. In addition to breakouts for total qualified paid and total qualified non-paid, the number of qualified sponsored subscriptions would be listed.

But perhaps the most significant change under consideration would be forcing magazines to provide much greater detail about the sources of their sponsored subscriptions. Under the proposal, publishers would have to specifically list all sources along with documentation proving who received such subscriptions.

Sponsored subscriptions can refer to a number of different things. Often, this label indicates subscriptions purchased by agents to be distributed in venues such as doctors' offices or beauty salons.

There has been speculation in the magazine industry that some agents may pay for such subscriptions, only to have their monetary commitment refunded in some way. This way, publishers could potentially bump up their paid rate bases while actually giving away copies of their magazines.

Of late, media buyers have been paying greater attention to publishers' statements and audits, given the string of circulation scandals in the magazine and newspaper businesses. It is likely that any sort of revelation from a particular magazine that it relies heavily on questionable sponsored circulation sources would lead to much tougher rate negotiations.

"Bottom line--media buyers want to know the true nature of magazines' circulation sources," said BPA Worldwide President and CEO Glenn Hansen in a statement. "The media buying and media owner executives on our board and supporting committees agree that the paid versus non-paid status of sponsored subscriptions is not what is relevant to buying decisions. What is relevant is what audiences are actually being reached through those sponsorships. So, BPA will independently verify the audiences being reached, and buyers will make their own informed judgments about the value of an individual sponsorship program."