Why the newspaper audit rules need to change

I was chatting to somebody from a media agency the other day.

They’d run a campaign for a client. Being reasonably sophisticated, they do post-campaign analysis.

Overall, the media investment paid off. But in one medium it did not.

In newspapers, their spend was not cost effective.  

Of course, there’s more than one reason why this may have been, but the agency’s theory was that the newspaper ads had not reached as many consumers as they expected. The chances are that newspapers won’t feature on that client’s schedule next time around.

Which is why the debate over Fairfax’s audit numbers is in danger of missing the point.

What matters to advertisers is not whether a publisher is working within the audit rules. It’s whether newspapers are actually ending up in the hands of genuine customers.

In order to pass an audit, newspapers have to prove that papers were printed. Auditors look for things like the tonnage of newsprint and quantity of ink used. So you have to do something with the papers afterwards.

The video we shot yesterday raises many questions.

First, it’s not term time. Why deliver more than 3,500 copies of the newspaper a day to a single university shop? Because, I’m told by a reliable source, this goes on every day of the year – with the unopened bundles of papers being taken away for recycling every Friday.

Publishers are generally pretty strict with their vendors about supply management so that they can minimise the number of returns, which of course don’t get counted on any audit. It seems highly unlikely that as cost-focused a company as Fairfax would be printing and delivering newspapers unnecessarily unless it had an excellent reason for it. (Not to mention that as an Earth Hour co-founder it seems odd behaviour on the part of Fairfax.)

Which then leads to the question of how prevalent is this? There are a lot of Sydney based educational institutions. If so, how many thousand unread Sydney Morning Heralds are there in the city every day?

Thanks to Crikey’s uncovering of internal emails, we know that there are similar issues at The Age in Melbourne. It appears that Fairfax took a decision not to launch a standalone educational supplement because they feared it would draw too much attention to the number of copies being put in the hands of students. What remains to be seen though is whether those copies were actually classified on the audit as educational copies.

Assuming that these copies of the Sydney Morning Herald are included in Fairfax’s audited number, I reckon they won’t be down as educational copies. The Herald’s current audited Monday to Friday circulation is listed as 207,013. It breaks out 1.25% as “educational sales”. That means they’re owning up to 2,500 education sales a day. Yet on just that one campus we found more than that.

Instead, a possible explanation is this: Students are offered an amazing discount deal of, say, $20 for a term or year’s sub. Their copy then counts as a paid sale, whether they pick it up or not. Theoretically the newsagent gets paid for handling that paper. It’s probably worth more to them than the hypothetical $20. You can see why advertisers might have concerns about whether this can then be counted as a genuine copy on the audit.

Which brings me back to audit.

The job of organisations like the Audit Bureau of Circulations is to enforce the rules that their members set. Many newspaper circulation and marketing managers would see their job as making sure that they know all the tricks to get the maximum number of newspapers onto the audit certificate.

But that game is part of the problem.

As I mentioned in the first few paragraphs, the newspaper industry has just lost another major advertiser.

If the audit numbers had been lower, then of course the advertiser would have expected to pay less. But they’d have got a return on the investment, and would still be an advertiser. Now they’re probably lost to newspapers forever.

(The same argument applies to the online autorefresh rort by the way. If you rip off clients with autorefresh they don’t get an ROI and eventually they lose faith in the medium.)

So this comes down to the audit rules. Assuming that Fairfax has been operating within the letter, if not the spirit, of the rules, then that’s where the problem lies.

Right now there’s no minimum price for a paper to qualify as a paid sale. That’s a far lower standard than ABCs in other parts of the world. In truth, in Australia the ABC’s paid sale number does not truly reflect paid circulation as a reasonable person might understand it.

The ABC’s AGM is a couple of weeks away. Clearly the issue is going to be on the agenda.

Until advertisers can be sure that they are getting what they pay for, newspapers – and the ABC – have a big credibility gap.

Tim Burrowes


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