POVs
A Primer on "Verified" Circulation
A Point of View By Teresa Perry, Senior Vice President, Publisher Relations and Report Processing Services, Audit Bureau of Circulations, Schaumburg, Ill.
The June 2006 ABC Publisher’s Statement filing deadline (July 31) is fast approaching. With it come several significant changes to ABC reporting requirements for this period, including a new “pink sheet” format and a new subscription category, “verified” circulation.
To help circulators at ABC member organizations prepare for these changes, I’d like to cover some of the intricacies of verified circulation from ABC’s perspective: What is (and isn’t) verified circ? What are some of the most important reporting and recordkeeping requirements? What’s the difference between “public place” and “individual use” distribution, and how should you report these categories? How will information be displayed in ABC reports?
To answer these questions, let’s begin with defining verified circulation.
What is Verified Circulation?
At its November 2005 meeting, the ABC board of directors collectively agreed to establish a new category of subscription circulation for consumer magazines, subsequently titled “verified” circulation. Later, at its March 2006 meeting, the board approved Rule F 15.1 Verified Circulation that defines the category and its qualification points. Let’s examine this in more detail.
Verified circulation is defined as subscription copies designated by publishers for readership in public places or intended for individual use by recipients who are likely to have a strong affinity for the content of the magazine.
It’s also important to define what verified circulation is not:
- It is not a default option for disqualified circulation discovered during the ABC audit process.
- It is not merely a new label for sponsored sales programs.
- It is not another name for analyzed non-paid circulation.
The verified circulation category became effective beginning with January 2006-dated issues and will be reported for the first time in Publisher’s Statements for the six months ending June 30, 2006. The total average for verified subscription copies during the statement period will appear in Paragraph 1. Two new paragraphs, 6A and 6B, will detail the verified circulation by distribution location or source and provide additional transparency to advertisers.
ABC Report Formats
The new ABC Publisher’s Statements and Audit Reports for consumer magazines will be available in three formats:
- Paid and Verified
- Paid, Verified and Analyzed Non-Paid
- Analyzed Non-Paid
You can view a prototype of these new statements on ABC’s Web site.
Types of Verified Circulation
Verified circulation is made up of two subcategories: verified public place and verified individual use. Let’s look at the details behind these two subcategories.
Public Place Verified Circulation
Public place verified circulation is defined as subscription copies designated by the publisher for readership by patrons and guests in waiting rooms or hotels. The following guidelines apply to public place verified circulation based on the place of distribution:
Waiting Rooms:
- Recipient locations must be presented with an opportunity to opt-out as a receiving location at least once per year. Visit ABC’s Web site for verified opt-out notice guidelines.
- Distribution must occur for at least two consecutive issues.
- Limited to three copies of any single magazine per location.
Hotels:
- Recipient hotel must agree to receive the magazine at its establishment.
- A contract must exist that identifies the hotel’s agreement to receive the magazines, the number of copies to be received, the number of hotel rooms at the hotel, and the distribution locations in the hotel.
- Contract must be renewed at least once annually.
- Distribution must occur for at least two consecutive issues.
- Limited to two copies per hotel room, per issue (if published monthly or less frequently). Limited to one copy per hotel room, per issue (if published more frequently than monthly).
Public place verified circulation will be reported in the new Paragraph 6A. In Paragraph 6A you will disclose the top five distribution locations of public place verified circulation based on volume. The remaining public place verified circulation will be reported in the “Other” category. For June 2006 and December 2006 Publisher’s Statements, Paragraph 6A may be an analysis of a single issue instead of an average for the entire reporting period. This issue must be representative of your circulation, but does not have to be the same issue as the analyzed issue traditionally used during the audit.
Individual Use Verified Circulation
Subscriptions that qualify for inclusion in the individual use category are distributed to individuals whose names were obtained from a list type of source that should be consistent with the editorial of the magazine. Recipients of the subscription should be likely to have a strong affinity for the content of the magazine.
The following guidelines apply to individual use verified circulation:
- List type sources used to obtain subscriber names should be consistent with the editorial content of the magazine.
- Recipients must be presented with an opportunity to opt-out of the subscription within the first 90 days of the start of service and at least once a year thereafter. Visit ABC’s Web site for verified opt-out notice guidelines.
- Distribution must occur for at least two consecutive issues.
- Limited to one subscription per consumer.
Subscriptions whose name source is listed as individually requested must meet the following additional guidelines:
- Recipients must opt-in to receive the subscription before distribution (the opt-in is a substitute for the opt-out option above).
- Order documentation must be maintained for the auditor’s review and cannot be more than three years old.
The new Paragraph 6B will detail the average verified individual use circulation for the top five eligible name sources, based on volume. The remaining verified individual use circulation will appear in the “Other” category. Just like reporting for Paragraph 6A, Paragraph 6B may be an analysis of a single issue, instead of an average for the entire reporting period. This exception only applies to the June 2006 and December 2006 Publisher’s Statements. The issue must be representative of your circulation, but does not have to be the same issue as the analyzed issue traditionally used during the audit.
Verified Circulation Do’s and Don’ts
Do make sure that recipients of verified circulation are given the opportunity to opt-out. Public place waiting rooms and hotels, for in-room use, must be given the opportunity to opt-out at least once a year. Locations must also renew their contract annually. Recipients of individual use must be given an opportunity to opt-out within the first 90 days of service and once a year thereafter. Recipients of individually requested must opt-in before distribution begins.
Do make sure all of your verified circulation subscribers receive a minimum of two consecutive issues.
Do review your verified circulation programs with an ABC Publisher Relations manager before they are executed.
Do maintain records of your order documentation and contracts and make them available during the audit.
Don’t claim copies as paid on an ABC Publisher’s Statement and then ask to move the circulation to the verified category if it is disqualified during the audit. The verified circulation category is not meant to serve as a dumping ground for paid circulation that is disqualified during the course of an audit.
Don’t present copies to a consumer with the intent to count them as paid and then move the circulation to verified individual use when you do not receive payment (i.e., credit cancels).
Don’t distribute single issues of a publication and try to classify them as verified circulation. Single issues are not eligible for inclusion in the verified circulation category.
Free Online Tutorials
To learn more about verified subscription circulation and reporting formats, I strongly recommend that you review ABC’s free online Flash® tutorials. Three on-demand presentations walk through each paragraph of each different format.
To learn more about ABC’s rule changes, policies and board actions, visit the ABC Web site at www.accessabc.com. We also recommend signing up for ABC’s free e-newsletter and opt-in e-mail updates to make sure you stay informed of important rule changes and updates from ABC.
For additional clarification regarding verified circulation, members are encouraged to contact their Publisher Relations manager at ABC headquarters, (847) 605-0909.
Links to Related ABC Items
Summary of November 2005 board actions
Summary of March 2006 board actions
Rule F 15.1 Verified Circulation and Opt-in criteria
Opt-out guidelines
Paragraph 6a explanation
Paragraph 6b explanation
Flash® tutorials
Pink Sheet prototypes
Teresa Perry acts as senior vice president, publisher member audit
and report processing services and oversees two critical publisherfacing
divisions at ABC: Publisher Relations and Technical Review and
Report Processing (TRRP).
Perry joined ABC as a field auditor in 1989 and was promoted to director, Field Auditing, Periodicals in 1998. In 2000, she was promoted to vice president, Field Auditing, Periodicals and in 2004, she was promoted to her current position.
Currently, Perry serves as the ABC staff liaison to the Magazine Directors’ Advisory Committee (MDAC), the Magazine Publisher’s Liaison Committee (MPLC), and the Magazine Agent and Fulfillment Committee.