ABC announces sweeping changes

Today, the Audit Bureau of Circulations declared its intention to reduce audit costs, freeze rates and modify rules for Canadian and American newspapers.

This morning, the Illinois-based board of the Audit Bureau of Circulations – saying it was ‘responding to current market conditions’ – announced several revisions to existing rules.

For starters, ABC is cutting audit costs nearly in half for some Canadian and newspapers and freezing costs for most other newspapers and magazines. In March, it had said that US newspapers with paid circulation below 50,000 would have the option to be audited every other year beginning in April 2009, raising the eligibility ceiling from its current 25,000 level. Now, ABC plans to advance this timeline by six months, to Oct. 1, 2008, and to extend the option to Canadian newspapers.

ABC also approved a new flat-rate billing model for field audit services for fiscal 2009, effectively freezing costs for most other ABC newspapers and magazines. In addition, ABC will unveil several new online filing tools in September that allow publishers to further lower their costs by digitally submitting advance audit documentation and worksheets.

‘ABC has typically billed publishers based on an hourly rate,’ said Michael J. Lavery, ABC’s president/MD. ‘Our new structure uses a flat rate based on the most recent ABC audit. By streamlining some aspects of the audit and automating more processes, most publications will be able to accurately forecast and control their costs.’

Lavery added that large metropolitan newspapers would continue to be billed on the hourly model due to the complexity of their audits. Those rates, however, will remain frozen at their 2007 level.

ABC also gave its initial approval to rules allowing all Canadian and American newspapers with paid circulation between 50,000-75,000 to have this same biannual audit option next year, beginning April 1. ‘To take advantage of this,’ stated ABC, ‘a newspaper’s most recent audit cannot contain an adjustment of more than 2% and its third-party circulation (e.g., copies purchased by a business in bulk quantity and distributed to customers) cannot exceed 5% of its total paid circulation.’

Newspapers with circulation between 50,000-75,000 will be required to participate in ABC’s Preprint Projection Center, a free online tool that allows publishers to provide confidential circulation forecasts to help advertisers better plan media purchases and insert-printing requirements. All newspapers are still required to file six-month publisher’s statements, with top-line numbers reported in ABC’s FAS-FAX report.

ABC stated that its Canadian members continue to review the US newspaper rule modifications for applicability here, and that it has given initial approval to several rule changes, based on the recommendations of Canadian advisory committees.

Specifically: In addition to the option of biannual audits for newspapers below 75,000 paid circulation, Canadian newspapers may immediately upgrade current home subscribers to a greater frequency, if the subscriber has the option to decline. Canadian and US newspapers may also immediately establish separate basic prices for their replica electronic editions. A new section of ABC’s bylaws and rules, Article 20, was created to house the Canadian rules, and Article 10 was dissolved.

ABC will allow consumer magazines to test new circulation marketing programs (e.g., partnership programs where audit documentation parameters are not yet defined) while working with ABC to determine the appropriate audit procedures. Circulation generated during the one-year test period would be reported as verified or analyzed non-paid, as appropriate.

The board adopted a new multimedia publisher’s statement for business magazines. The new optional report, available for the Dec. 2008 reporting period, allows publishers to report print circulation, website activity, e-newsletter activity and pass-along receivership in a single ABC statement. And effective immediately, paid website subscriptions qualify as paid digital editions of business magazines.

As well, ABC agreed to test a new optional consolidated report that would allow newspapers to display a variety of print, online and audience data. ABC must audit all of the data on the report, which will be available as a test for the Sept. 2008 reporting period.

ABC modified the requirements for newspapers that participate in Audience-FAX so that larger (tier 1) publishers must report website unique visitors using panel-based sources like Nielsen Online or comScore, when available.

ABC will form a new Digital Advisory Committee to examine trends, business opportunities and ABC’s role in auditing emerging media, and has also elected five new directors: Irene Grieco, manager of media investment and strategic partnerships at Unilever US; Suzanne Silber, group director of strategy at OMD; Bill Stabile, senior director of brand and marketing communications at Siemens; Lindsay Valk, SVP of analysis and planning, consumer marketing, Hearst Magazines; and Brenda White, SVP, Starcom Worldwide.