Agency boss warns: We’re losing confidence in newspaper audit numbers

Media agencies are losing confidence in whether they can believe Audit Bureau of Circulations newspaper numbers, OMD’s head of print Simon Davies has warned.

In an interview published in today’s Media section of The Australian, Davies joined the voices calling for a rethink of the Audit Bureau of Circulation’s definition of what constitutes a paid sale.

Among the loopholes are people such as students being offered a card for a big discount for a year’s subscription to newspapers. And so long as they are entitled to collect that paper every day, they may be counted as a daily subscriber, regardless of whether the paper ever ends up in their hands. In some cases the price is so good that consumers use the free weekend delivery and have no intention of making use of the weekday pickup deal.

As Mumbrella reported from the University of Sydney last week, in some cases the newspapers are delivered to the newsagent but then go straight to recycling.

A similar issue came to light in Melbourne with an internal email within The Age suggesting that staff were working to avoid the practice becoming known to advertisers. It warned: “We would effectively write down the value of advertising in weekday editions from 200,000 circulation to 160,000 circulation, causing a pretty hard sell for the advertising team.”

The current ABC rules merely define a subscription sale as: “by way of a subscription for a term to a Publication which is offered to a person at the Advertised Price and accepted by that person at that price.” There is no requirement to demonstrate that any of the copies reach the subscriber or minimum price for the arrangement.

Another loophole potentially allows for venues to include a newspaper in the cover price of a ticket. Anecdotes abound of piles of newspapers at tourist destinations.

The ABC rules define “dependent transaction sales” as:

“a sale (not being an Event Sale) at a price of a Publication under an arrangement by or with the publisher of the Publication (Secondary Transaction) which is made as part of another transaction (Primary Transaction) where:

(a) the Primary Transaction is not the sale of a Publication;

(b) only one copy of the Publication is provided to the purchaser in the Secondary Transaction; and

(c) for Audit purposes, the sales and returns of the Publication are accounted for and the documentation concerning those sales and returns is retained and available for inspection by an Auditor.

The ABC argues that it has been applying the rules as they stand and that if advertisers want to know how many papers have been read, they should look to a readership survey such as the one carried out by Roy Morgan Research. But Davies argued:

“That’s technically within the (circulation) rules but equally it’s not what you expect you’re getting.

“We’re big believers that circulation is the most important metric in terms of performance.”

In The Australian article, Davies said he had been seeing piles of the newspapers at places in Sydney like the Imax Cinema and Aquarium. Speaking of the stories of abondoned copies, he said: “It does erode my confidence in the figures.”

As Mumbrella discussed on Friday, media agencies have been questioning whether they are getting a return on their investment in newspaper advertising.

Today’s Australian Financial Review carries details of a global survey of marketing directors carried out by Forrester Research. Just over half said they were ready to cut newspaper ad budgets this year. The key reasons were a lack of ability to track results, and low ROI.

Any changes to the ABCs rules will have to be agreed by its members. However, advertisers and agencies are outnumbered by publishers on the ABC’s general committee.

There are five advertiser and five agency representatives. But, there are ten newspaper representatives and six magazine representatives.


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