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Q & A with ABC’s Mike Lavery on the New Newspaper Qualification and Reporting Standards

To meet the evolving needs of advertisers and publishers, the ABC board of directors endorsed a set of sweeping strategic recommendations for U.S. newspapers that aim to revise the definition of paid circulation so that it is more straightforward and intuitive, clearly define ABC’s rules and modify key circulation standards.

ABC’s Mike Lavery addresses some of the common questions surrounding these new newspaper qualification and reporting standards and what they mean to publishers and advertisers.

1. What has changed in the industry that these new rules are necessary? How did these changes come about?

The initiative reflects the collaborative recommendations of a joint industry task force that represents nearly two-dozen leading newspaper and advertising executives.

The four main goals of the initiative are to: provide advertisers with additional information to meet the industry’s evolving needs, streamline the audit process, simplify rules and reports, and develop circulation categories that allow newspapers to target key audiences and readers that are highly valued by advertisers.

2. How will these changes affect the way newspaper circulation will be counted and reported?

By adopting a flexible pricing model, a newspaper copy will be considered paid by ABC regardless of the price for which a copy is sold. “Other paid circulation” (which includes third-party copies and copies distributed to schools and newspaper employees) will be reported in a newly established “verified” category and not as part of paid circulation. Paid circulation will continue to be reported separately on ABC Publisher’s Statements and Audit Reports.

3. Does this mean that circulation is waning in importance? Is ABC moving to audience metrics? Some might interpret these new rules as a way to take the focus off the decline in print circulation. How would you respond to this?

These recommendations don’t place any less significance on paid circulation. On the contrary, the changes specifically reference the importance of paid. The definition of paid circulation was revised so that it is more straightforward and represents payment by an individual reader or a specialized distribution channel. The changes, along with the Audience-FAX initiative, provide newspapers with a platform to target readers that advertisers highly value.

4. How will these recommendations change the relationship between publishers and advertisers? How will it benefit both parties?

This initiative will benefit publishers by giving them streamlined audits, rules that are easier to understand and more marketing flexibility. Advertisers will benefits from this change by having access to additional information, simpler ABC reports and clearly defined ABC rules, all of which result in a streamlined audit process. The creation of the “verified” category also provides advertisers with greater circulation transparency.

5. How do these new rules streamline the audit process? Will they lower a newspaper’s audit costs?

These more intuitive rules and simplified reporting will result in less costly, streamlined audits because they help to eliminate or reduce some time-intensive audit practices surrounding “other paid circulation” and other circulation categories. Some items will no longer require verification of payment streams. For example, third-party and NIE copies will no longer have to be as extensively audited due to not having to prove the paid component. Additionally, the flexible pricing model simplifies the audit process, thus lowering the costs. The qualification standard is similar to those currently in use by ABC’s periodical members since 2001 and the Canadian newspaper members since 1998.

6. What’s this new paid-circ category for hotels and subscriptions purchased by businesses for employees? What about intermittent subscriptions? Where will they count?

ABC will reclassify copies distributed by hotels and group subscriptions paid for by businesses in a new paid-circulation category.

Intermittent subscriptions will fall under the verified category.

7. When will the changes be implemented? What are the next steps?

The specifics and details of these changes are expected to be finalized in March. However, to ensure a smooth transition, all recommendations will be phased in over a three-year period.

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