Newspaper Trade Group's Circulation-Counting Changes May Inflate Numbers

Thanks to changes being implemented by the newspaper industry's Audit Board of Circulations (ABC), it may be, as I suspected in a previous post (NewsBusters; BizzyBlog) that the 30-month analysis of newspaper print circulation drops I did last week (NewsBusters; BizzyBlog) is the last "clean" one I'll be able to do.

The ABC announcement is here. Editor and Publisher's Jennifer Saba describes the changes that appear likely to prevent meaningful comparisons of new circulation figures to those in prior reports (bolds are mine; HT to Recovering Journalist, whose post on the topic is hysterical, though I always thought that CPAs were the ones who answered "What do you want it to be?" when asked "What is 2 + 2?" :-->):

During an annual meeting last week in Chicago, the board agreed to several recommendations by a committee -- consisting of both publishers and advertising executives, ABC stressed -- that will entail the following changes:

*Implement a flexible pricing model where newspapers will be considered paid by ABC regardless of the price for which the copy was sold.

*Other-paid circulation will become "verified circulation" similar to how ABC accounts for magazines, meaning there will no longer have to be payment for third-party copies or Newspapers in Education for the circulation to count.

*Hotel and employee copies, currently under other-paid, will be reclassified under a new paid-circulation category.

*Newspapers will have flexibility to convert home subscribers to a greater frequency.

"Our aim was to streamline the audit process, clearly define important measurement standards, and improve overall communication between newspaper buyers and sellers," Craig Sinclair, vice president of advertising at Walgreen Co., said in a statement.

ABC has been working on these new strategies since the summer of 2006. The specifics will take approximately three years to work out, according to ABC, but it will alter the face of the FAS-FAX, publisher's statements, and audit reports.

Even if the ABC continues to report separate paid print-circulation figures, which does not appear absolutely certain (they may be buried with other total audience measures, or at least kept that way in information given to the public), the first two bolded changes, and possibly the third, are fundamental changes to how circulation has historically been determined.

The changes also appear to present an opportunity for newspapers to game the system. One possibility would appear to include dumping "Newspapers in Education," wanted or not, into college campus classrooms, cafeterias, meeting areas, and dorms. After all, these freebies count as part of "verified circulation," which drives advertising rates.

I see no evidence from the ABC that they have any intention of restating circulation figures reported in prior periods. Even if they do, it would be nice to know how far back they intend to go.

Given the changes above, it would appear that the March 2008 circulation report will show higher figures for most, if not all, papers, and has the potential for being spun by the industry to those who don't dig into the detail as some kind of turnaround for the industry. We shall see.

Recovering Journalist points out that this is all window-dressing, and perhaps self-delusion:

Cooking the books isn't going to solve the problems of relevancy, competition from the Web, and failure to truly innovate (except maybe in the circulation-accounting department, apparently).

In the name of accuracy, I suggest that ABC consider changing its name to the Association of Book Cookers.

Cross-posted at BizzyBlog.com.