ABC's Monthly Online Member Newsletter

Consumer Magazines: From Sponsored Sales to Verified Circulation
A review of recent board actions and online resources

Starting with the July 2005 board meeting, ABC has taken the initiative to educate members on its new consumer magazine Publisher’s Statement format in addition to the new “verified” category of circulation. Since then, several supplemental information guides have been published by ABC and several training seminars were conducted so that all members were given multiple opportunities to have their questions answered and better understand the nuances of sponsored sales, verified, analyzed non-paid circulation and more.

To review, here are some brief highlights of the last two board meeting decisions, from sponsored sales to verified circulation:

Sponsored Sales Rules

In July 2005, the ABC board approved modifications to sponsored sales rules and unanimously voted to include a “net of all other considerations” criterion to be applied immediately to all sponsored sales. The amount a sponsor pays for subscriptions must meet the definition of paid circulation after considering all related transactions. This includes any marketing and distribution fees, advertising credits, and other refunds or rebates paid by the publisher or its agent to the sponsor. In other words, the sponsor must be “out of pocket” a qualifying amount for the program to meet the standards of paid circulation.

Other sponsored sales rule changes that were approved:

• For agreements entered into prior to July 18, 2005, circulation will be considered under the previous ABC sponsored-sales rules and may continue to be reported as "paid" through the June 30, 2006 issue. After this date, copies served and counted as sponsored paid must be paid for in accordance with updated rules.
• New sponsored-sales agreements entered into July 18, 2005, or later must comply with amended ABC rules beginning with January 2006 issues.

The New Publisher’s Statement Format

Also in July, the ABC board further reviewed changes to the consumer magazine Publisher’s Statement report format. These changes were given unanimous consent and final passage at the November 2005 board meeting:

1. Streamlining of Paragraph 1 data to reflect reporting of average paid and verified circulation with rate base comparison.
2. Merging of price data into a single paragraph.
3. Eliminating the reporting of subscriptions sold at less than 35 percent of average price.
4. Creating a new Paragraph 6 to report detailed analysis of subcategory of average circulation served for the period of the listed reporting categories.
5. Eliminating the map in the geographic analysis section and reporting state data in alphabetical order.
6. Modification of reporting of Analysis of New and Renewal Subscriptions, Channels of Sales.
7. Repositioning of other data paragraphs within the statement to aid flow of information.

Verified Circulation

In November, the ABC board also further specified that a new category of circulation, “verified,” be created to address subscription copies distributed to public places such as physician waiting rooms, hair salons and hotel, as well as copies delivered to consumers for individual use not subject to “paid” qualification requirements. As applicable, “verified” circulation will be reported alongside all changes starting with the June 2006 statements.

The board also agreed to immediately modify the application of its consumer magazine sponsored sales rules so that eligible sponsors can be a business/organization where the primary activity is to sell or provide services or products to consumers, in order to promote the professional interest of the business/organization. This interpretation allows organizations such as charities, web sites, local governments and schools to be eligible sponsors.

To read more about these actions visit ABC’s board actions page:
July 2005 Board Action Summary
November 2005 Board Action Summary

Prototypes, and a brief explanation of the new statement format are also available on ABC’s Web site.

In addition, a guide to understanding the new report format was published with the Winter 2005/06 NewsBulletin: Taking a Look at the New Consumer Magazine Publisher’s Statement

Definition of Verified Circulation:

Verified circulation refers to subscription copies in which the publisher may target readership among public places and individual readers who may have a strong affinity for the publication. This verified category of subscription circulation is not subject to paid qualification requirements. As a category of subscription circulation, consecutive issuance of a minimum of two copies of the publication must be received by the intended recipient to be considered a subscription.

Within the category of verified, two established subclasses are “Public Place” and “Individual Use.”

A helpful chart comparing and contrasting verified public place, verified individual use, analyzed non-paid bulk and other frequently asked questions is available online.

As with all program considerations, ABC recommends that members check with ABC’s Publisher Relations team for a review of proposed programs. This will help ensure that circulation is qualified appropriately.

Members can contact their Publisher Relations manager at ABC headquarters at (847) 605-0909.

Related links:

Press releases:
ABC Board Approves Launch of Newspaper Insert Verification Service, Creates New Magazine Circulation Category, Modifies Pink Sheet
Summary of November 2005 Board Actions
Summary of July 2005 Board Actions

ByLaws and Rules Updates:
ABC Answers Members' Questions on "Verified" Circulation Reporting
ABC Establishes Verified Circulation Reporting Category and Updates Publisher's Statement (Updated Nov. 2005)
Modification to Rule F 2.1 Sponsored Sales (Board Updates Definition of a Qualified Sponsor – November 2005)

Special Insert to NewsBulletin Winter 2005/06 Issue:
Taking a Look at the New Consumer Magazine Publisher’s Statement

Bylaws and Rules:
F 1.1 Paid Circulation Defined
F 2.1 Sponsored Sales
F 13.5 Analyzed Non-Paid Bulk Defined
F 13.6 Analyzed Non-Paid — Market Coverage Circulation
F 15.1 Analyzed Non-Paid Direct Request
F 15.2 Analyzed Non-Paid Other Than Direct Request Circulation

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