To the Editor:
The purpose of this letter is to clarify some of the statements that appeared in WWD’s article, “More Adventures in Circulation,” in the June 17 edition. In short, we at ABC have identified a potential concern and, thanks to the dedicated and diligent work of numerous members representing magazine publishers, advertisers and advertising agencies, we have moved quickly and effectively to resolve it. The issue involves a misclassification that does not impact total paid circulation. Contrary to the statement that appeared in your recent article, ABC’s audit staff — in the normal course of conducting its audits — recently determined that some ABC publisher members had misclassified agent-generated “individually addressed/sponsored” copies. These copies (which are purchased by third parties, individually addressed and mailed to designated recipients) have been erroneously posted on subscription files as “individually paid” subscriptions. According to ABC qualification rules, they should have been classified as “public place/sponsored” sales.
Again, these copies qualify as paid circulation. So why has ABC worked so closely with members to resolve the issue? Because when circulation in the “public place/sponsored” category exceeds 5 percent of the total average paid circulation for the filing period, the average for that category must be disclosed and explained in ABC reports. Misclassifying the circulation in question may impact the 5 percent threshold, and ABC wants its members to have the most reliable, accurate numbers possible.
To date, here’s what ABC and its members have worked together to accomplish:
- We have intensified communications with our publisher members to make certain that the relevant definitions and reporting parameters are clearly understood.
- Recognizing the potential for confusion between “individually addressed” and “individually paid,” as well as the possible unavailability of historical records, we have redoubled our publisher training efforts to clarify definitions and address ongoing questions and concerns firsthand.
- Where necessary, we are actively working with our publisher members to audit at the agent level.
- The ABC board of directors has given publishers the temporary option of excluding “individually addressed/sponsored” subscriptions from calculations designed to determine disclosure. This option is limited to the June 30, 2003 ABC Publisher Statements and open audits through June 30, 2003 and does not affect other categories of “public place/sponsored” subscriptions.
- To reinforce the importance of accurately disclosing this category, effective with Dec. 31, 2003 reports, “individually addressed/sponsored” subscriptions will be a required reporting category of “public place/sponsored” subscriptions. Should the “public place/sponsored” category exceed 5 percent of a publication’s circulation, this fact will be disclosed in the explanatory section of the ABC statement; should “public place/sponsored” exceed 10 percent, this circulation will be disclosed from copy one in paragraph 4B of the ABC statement.
For almost nine decades, ABC has been a member-driven organization made up of dedicated publisher, advertiser and advertising agency members. We encourage their collaboration and share their concerns. And working together, we will continue to uphold reliable, verified circulation reporting for the benefit of the entire print media industry.
Michael J. Lavery
President and Managing Director
Audit Bureau of Circulations
Editor’s Note: The preceding letter is in response to a WWD article on the misclassification of certain types of “public space/sponsored” subscriptions within the magazine industry as “individually paid” copies. Some consider “individually paid” subscriptions as more desirable than “public space/sponsored” copies that are generally found in such places as doctors’ offices and beauty salons.