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JULY 2005 BOARD ACTIONS

SCHAUMBURG, Ill. (July 19, 2005) - The following are highlights of the actions taken by the Audit Bureau of Circulations’ (ABC) board of directors at its July 13-16, 2005, meeting. (Note: The full update to ABC’s bylaws and rules is regularly made available at www.accessabc.com within weeks following each board meeting.)

Magazines
Unanimous Consent (Effective for January 2006-dated issues)

The board approved modifications to Rule F 2.1 Sponsored Sales to further define an eligible sponsor as a business that sells products/services to the consumer, paying amounts required by Rule F 1.1 Paid Circulation Defined, net of all other considerations.

[Update: On Sept. 7,2005, the ABC boeard voted to modify the effective date of previously annouced changes to its rules governing sposored sales:

• 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," but not for issues dated after June 30, 2006.
• New sponsored-sales agreements entered into July 18, 2005, or later must comply with amended ABC rules beginning with January 2006 issues.
• Sponsored sales that do not meet the updated definitions may be classified under a new "qualified" circulation category on the June 2006 Publisher's Statement.]

First Passage (Effective January 1, 2006, affecting the June 2006 Publisher’s Statement)

ABC’s board approved report format changes to the consumer magazine Publisher’s Statement, reflected in the appropriate rules, that include:

1. Streamlining of paragraph 1 data to reflect reporting of average paid and qualified circulation with rate base comparisons.
2. Merging of price data into a single paragraph.
3. Eliminating the reporting of subscriptions sold at less than 35% of average price.
4. Creating a new paragraph 6 to report detailed analysis of subcategory average circulation
5. Eliminating the map in the geographic analysis section and reporting state data in alphabetical order.
6. Repositioning of other data paragraphs within the statement to aid flow of information.

In addition, paragraph 8C, Channel Reporting, continues to be revisited and will be considered at the November 2005 board meeting.

For information

The ABC board of directors voted to disqualify circulation claimed as paid from sponsorship programs generated by EBSCO Consumer Magazine Services, because of a lack of qualified sponsors and a lack of payment. This action affects more than 80 consumer magazines and applies to all current and previous EBSCO-related exception requests considered by ABC’s board of directors.

The board also disqualified circulation from sponsorship programs managed by InFlight Newspaper and Magazine Inc., affecting at least 20 magazines, with more likely to follow as audits are completed. This action was taken because ABC rules require that publishers receive payment in a timely manner for sponsored copies to qualify as paid circulation. Per these criteria, and beginning in the second half of 2004, InFlight did not pay some publishers for copies of the magazines.

Newspapers
Effective Immediately (July 18, 2005)

The board approved a new day-of-week report format for Publisher’s Statements, FAS-FAX and Audit Reports that will include reporting of and definitions for core newspaper and replica electronic editions, non-replica electronic editions and unique editions. Definitions for these terms are described below:

Core Newspaper and Replica Electronic Editions
• The edition must have full run-of-press (ROP) capability.
• The edition should be in the same format as the main newspaper.
• The edition should be in the same language as the main newspaper.
• The edition should be targeted to same type of consumer as the main newspaper

Non-replica Electronic Edition
• The edition must be able to accept ROP advertising.
• The edition must meet the same paid circulation requirements as the main newspaper.
• The edition should have the same general appearance as the main newspaper.
• The edition should have the same identity / name as the main newspaper.
• The edition’s editorial content should be consistent with the main newspaper and unique editions.

The board also approved the enhancement of a Supplemental Data Report format that will report additional details for electronic and unique edition circulation, based on a defined threshold of five percent and 3,000 copies per issue.

In addition to these modifications, the board voted to modify Rule C 7.12 List of Towns Receiving 25 or More Copies, to require that the day being analyzed is from within the 5-day average (Monday to Friday). Paragraph 3 Projected Paid calculation will be calculated across the five-day average and a peak day.

The board voted to modify the parameters of barter payments considered acceptable by ABC. Acceptable types of barter transactions are defined as the following:

1) Gift cards/certificates or similar products that are redeemable for an array of products over several brands
2) Bank money cards or similar products that are redeemable at a variety of retail or service provider outlets for an array of products and/or services over several brands

Items not meeting the above criteria will not be considered as acceptable payment for third party sales to be credited as paid on ABC reports.

Further guidelines on third party sales and barter transactions can be viewed on ABC's Web site at www.accessabc.com/resources/n_bulk.htm. For free program review please contact ABC's Publisher Relations staff at (847)605-0909.

First Passage (Effective April 1, 2006)

The board voted to modify Rule C 5.5 Newspapers Distributed Together so that a newspaper with less than daily and Sunday frequency may include copies of another newspaper in its subscription term on one day only, rather than on multiple days.

For information

The board approved the creation of an audit service to address the verification of insert delivery. Anticipated availability of this new service is projected for early 2006.

ABC’s board of directors also considered expanding ABC’s services to encompass any non-paid newspaper properties that are primarily home-delivered and revising membership eligibility requirements so that ABC’s standards could be applied across these newspapers (regardless of ownership).

Business/Farm
Effective Immediately (July 18, 2005)

ABC’s board voted to modify Rule D 12.5 Regularly Scheduled Special Edition Circulation, D 1.2 Prices, D 6.1 Renewals, to permit publishers to establish a separate basic price for the frequency of regularly scheduled special edition circulation. The modifications require all circulation of this type to be reported separately in ABC reports and analyzed by subscription sales, post expire copies and renewals if applicable.

The board also approved modifications to Rule B 3.2 Time Limit for Filing Publisher’s Statements to allow farm publications up to 30 days, instead of 15 days, to file their Publisher’s Statement.

The board created reporting and qualification guidelines for farm publication digital editions, including Rule E 1.2. Prices, to reflect the same guidelines used for business publications.

Reader Profile
Effective Immediately (July 18, 2005)

The board voted to modify existing standards so that “Any source of copy producing 100 or more respondents will be required to be reported completely in Paragraph 5 of the Reader Profile Audit Report.”

The board also approved changing the data-longevity standard as applied to Reader Profile reports to allow a bonus shelf life of six months for expiring custom studies when a participating publication has renewed their participation with a new audited study.

The board also adopted a requirement that all Reader Profile data delivered by the research supplier to the newspaper must also be provided to ABC within five business days.

For All Publications
Effective July 30, 2005

ABC’s board of directors approved an “Audit Status Listing” to be made available on ABC’s Web site Aug.1, 2005. The objective of the listing will be to provide current status reports, along with the date each audit was moved to its current status, for all open audits – and, where applicable, to provide specific data on the most recently released audit for all publisher members.

All audits will carry one of the following descriptors – as applicable:

• Released (date) – this will identify audits that are released and available to members.
• Final report process – this term will identify audits that have all field work completed and are working their way through the internal review process – to include audits that may be out on proof copy to the publisher.
• Assigned, pending arrival of auditor – to be used whenever an audit has been assigned to an auditor, however the auditor has not commenced work on the assignment.
• Audit in progress – this term will identify all audits where work is underway however the auditor has not completed the assignment.
• Publisher requested delay in audit – to be used only when an audit has not been started and the publisher wishes to defer the start to a point outside the ‘expected time parameters’ for a publication in the division (e.g. six months for newspapers; nine months for periodicals).
• On hold, awaiting publisher data – this will describe situations where the auditor is in a position to start – or continue – an audit assignment, however the publisher has not supplied all the data necessary to complete the assignment.
• On hold, awaiting auditor– to annotate cases in which ABC has initiated an audit but the auditor left prior to completing the audit for reasons out of the publisher’s control.

For information

ABC announced its 91st Annual Conference and Meeting, “Accountability: the Rules of Engagement,” to be held November 2-4, 2005 at the Sheraton Bal Harbour, Bal Harbour Fla. Registration is available online at www.accessabc.com.

The board also announced that the Bureau’s fiscal 2006 budget does not include a rate increase.