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ABC Addresses the Recent Resignations of Several Newspapers

A Point of View By Bob White, Senior Vice President, Canada, Audit Bureau of Circulations, Toronto, ON.

It has been a busy few weeks here in Canada. First, three newspaper-publishing companies announced their resignations from ABC. This was quickly followed by an outcry from some of Canada’s largest and well-known advertising agencies. Most recently, Rogers Publishing moved all of its 52 audited titles under the ABC umbrella in response to demands for comparable, credible data.

To address these events, I’d like to take the opportunity to answer some questions and rumors, and outline ABC’s essential role in the Canadian market.

Why did these newspapers leave ABC?

The resigning newspapers cited a desire for a “made in Canada” solution, but the truth is that Canada has always had a distinct and vocal representation in the ABC process. This includes five seats on the ABC board and two well-represented advisory committees. In fact, several of the departing newspapers were participants in ABC’s advisory committees.

Shouldn’t the Canadian newspaper market have its own auditing standards?

Absolutely, and in fact it does. The Canadian newspaper market is admittedly different from the U.S. market as evident by ABC’s separate Canadian membership, board directors and advisory committees. It is also why ABC has always ensured that rules, reports and services affecting the Canadian market are thoroughly vetted by our Canadian members.

Five Canadian directors sit on the ABC board:

• Brian Segal, president and CEO, Rogers Publishing
• Bruce Claassen, chairman, Aegis Media Canada
• Robert Troutbeck, president, Troutbeck-Chernoff
• Sunni Boot, president and CEO, ZenithOptimedia Canada Inc.
• Dennis Skulsky, president and CEO, Canwest

These directors are present at all ABC board meetings and events. They assemble as a separate committee during the meetings to review and discuss issues relevant to the Canadian market.

These directors also rely on two advisory committees to research industry trends, study proposals and provide recommendations: the Canadian Newspaper Advisory Committee and the Canadian Print Advertising Buyers Committee. These committees spend numerous hours creating and vetting rules, reports and services before making their recommendations directly to the ABC board. In fact, the role of our advisory committees sounds remarkably similar to the role of the new CCAB newspaper advisory board. ABC’s Canadian committees have both been operational for several years, with representatives from the departing papers fully participating in the newspaper committee.

In addition to the separate and distinct representation for Canadian members, there are numerous examples of ABC rules specifically tailored to meet the unique needs of the Canadian market. Here are just a few examples:

• Newspaper report formats – In 1998, the Canadian market created its own newspaper report format that better met the needs of the Canadian marketplace.
• Flexible pricing model – Also in 1998, Canadian newspapers adopted a flexible pricing model where copies were counted as paid circulation as long as publishers collected a penny or more. U.S. newspapers are just now adopting this change.
• Third-party sales break out – ABC newspapers in the Canadian market also break out detailed price points for each copy sold, including copies sold under a third-party sales arrangement.
• U.S. newspaper qualification and reporting task force – Recent developments in the U.S. newspaper market have led to an overhaul of ABC rules and reports. Although several Canadian-member newspapers and buyers participated in the committee, Canadian members have only just begun to review and discuss which, if any, of the rules to adopt for the Canadian market.

CCAB is a well-known audit firm. Aren’t they equally capable of auditing these large newspapers?

Not all circulation audits are alike—especially the audits of large, paid metropolitan newspapers. These audits are highly complex and take extensive resources, skills and understanding. It is not just “knocking over a bag of beans and counting the number of beans in that bag,” as one BPA executive suggested. ABC’s experience auditing every major paid metropolitan newspaper in North America for nearly 100 years separates us from the rest.

For example, the planning and buying of a local ad campaign for a small business using one or two media channels is wildly different from the planning and buying of a national ad campaign for a national company using multiple media channels. It is equally true that the auditing of smaller, free community newspapers is vastly different from auditing large, paid metropolitan newspapers.

ABC’s rigorous audit and reporting practices are designed to satisfy Canadian buyer expectations and have long been accepted as the “gold standard” in circulation auditing. Our experience tells us that it is not acceptable to rely on newspaper’s internal records or distributor affidavits to verify delivery and distribution. This is especially relevant for the circulation categories of forced-frequency conversions and third-party sales and it is why ABC makes personal contact with the receiver of the newspaper to confirm delivery. This level of testing, while labor-intensive, has proven to be the most reliable audit process to ensure full transparency and accountability for advertisers.

We also hold our newspaper members to a very narrow audit tolerance, often less than one percent. If we find an audit variance, we report it. It might not seem like much, but if even a two percent error tolerance exists and is not detected at a 400,000-circulation newspaper, then an 8,000-copy-per-issue deduction would not be revealed to the advertiser. For a flyer advertiser that contracts for a weekly insert, this discrepancy could amount to more than 400,000 flyers in one year that don’t reach their targeted recipients—for just one newspaper.

Why are many media buyers so opposed to these papers leaving ABC?

Canada’s largest and most influential advertiser and agency leaders were unaware of this announcement. The Canadian Media Directors Council, the most powerful consortium of media professionals in the country whose members account for 80 percent of all Canadian advertising investments, were not consulted about this momentous decision. The buyers that I’ve spoken to outline four key concerns:

No consideration for buyer opinion/input
None of the resigning newspapers took the time to consult with the top media directors responsible for Canada’s ad dollars—a move that some buyers openly question.

Abandonment of buyer/seller dialogue
For nearly 100 years, buyers and publishers have met within the ABC forum to mutually agree upon key standards and rules that both sides felt were fair and agreed to abide by. It has served the industry well, but in this case, the newspapers chose to circumvent this long-standing process and abandon the relationships and standards that both sides worked diligently to build.

Majority buyer voice missing in governance
In their resignation announcement, the newspapers noted that the new CCAB advisory board would be equally populated with buyers and publishers and that the chair would alternate between a publisher and advertiser. This has never been the case with ABC. The tripartite board of directors that governs ABC is always weighted in favor of buyers, ensuring full transparency and accountability. In addition, ABC’s chair must always come from our advertiser or agency members.

Loss of benefits to buyers
The resigning newspapers may have proffered many benefits for publishers, such as governance structure and control over rules, but the benefits for buyers are unclear and unstated. In fact, the newspapers’ decision now makes the media planning and buying process more cumbersome by creating two different standards for Canadian newspapers.

How will this move impact media planners and buyers?

This clearly makes the media buying and planning process more labor-intensive and challenging. Buyers now have to learn and stay current on different standards, metrics and report formats. The members of each auditing organization will endorse different auditing standards and reporting practices, making it impossible to compare circulation data for some of Canada’s largest paid metropolitan newspapers.

Buyers are also losing access to newspapers’ detailed circulation data. Information that buyers have traditionally been given unimpeded access to will now be unattainable. Even data that will continue to be available will no longer be centralized in ABC’s online database or populated throughout our buyer-developed reports and analysis tools.

Most importantly, buyers will no longer be able to rely on ABC’s unparalleled newspaper circulation auditing experience to provide them with the transparency and credibility they desire and have built as the “gold standard” in media auditing.

For More Information

To learn more about ABC’s role in the Canadian market, please contact our Canadian office at (416) 962-5840.

About ABC

With nearly 4,000 members in North America, ABC is the forum of the world’s leading magazine and newspaper publishers, advertisers and advertising agencies. The organization provides credible, verified information essential to the media buying and selling process. ABC maintains the world’s foremost online database of audited-circulation information and a growing array of readership, audience and Web site usage data. To learn more, visit http://www.accessabc.com.

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Bob White serves as ABC’s senior vice president of Canada. He joined ABC in 1990, with 15 years previous experience in advertising sales and management with major publishing groups in Toronto and Montreal. He is a past president and director for both the Advertising Club of Toronto and the National Advertising Benevolent Society. Fluent in both English and French, White provides a variety of translation services to ABC’s Canadian members. A resident of Toronto, White received his bachelor’s degree in marketing, film and French from Concordia University.