It's that time of year again. BPA's committees around the globe are starting to review existing rules for possible amendment as well as new rules that may affect BPA's membership. BPA's Board of Directors will make the final decisions at its semi-annual meeting on December 10, 2009 in New York City.
Below I have listed the rules being considered followed by summaries of those rules. I ask that you submit your opinions and questions regarding those rules that may affect your organization by using the "Comment" section found after this blog entry.
- AGE AND SOURCE REPORTING
- DIRECT REQUEST
- DIGITAL EDITIONS: PHYSICAL ADDRESSES
- DIGITAL EDITION CONVERSIONS
- DIGITAL EDITION REPORTING
- BARTER TRANSACTIONS
- CHANGE OF FREQUENCY
- PRODUCTION STATUS
- PARAGRAPH 8 – BUSINESS PUBLICATION STATEMENTS
- CHARITABLE DONATIONS
- PUBLICITY
- QUALIFIED SHOW COPIES
- SPONSORED CIRCULATION
- AUDIT REPORTS
During the economic crisis of this year, BPA has experienced a higher rate of membership attrition than normal.
When we speak to our members we learn it is not the BPA fees that prompt them to resign, but the cost to maintain the BPA circulation statement, specifically, paragraph 3b, Age and Source. One ADAC (Audience Development Advisory Committee) member resigned several magazines due to costs related to attempting to maintain a high rate of one year request circulation as reported in paragraph 3b. It was suggested BPA make age and source reporting optional. In markets where age and source are important, allow the publishers the option to continue reporting. In markets where age and source are not important, give publishers the option not to report.
Relaxing reporting requirements is always tricky for BPA. Half of the membership applauds the change, and half of the membership perceives that such a change is a weakening of standards and removes a competitive advantage. How do you feel about optional age and source reporting?
DIRECT REQUEST
At its May 2009 meeting, the BPA Board of Directors agreed to change “personal direct request from recipient” to “direct request.” This change was made because many subscriptions are requested by authorized assistants, not the actual subscribers.
It may be possible to bring further transparency to the category. A BPA publisher member noted the individual may not “directly” request the subscription; often the subscription is requested by an authorized assistant. The publisher proposed to change “direct request” to “individual request.” The publisher believes this more accurately describes the interaction with the subscriber, or the subscriber’s authorized assistant.
DIGITAL EDITIONS: PHYSICAL ADDRESSES
As the number of magazines reporting digital editions continues to rise, more publishers are experiencing the challenge of subscribers without physical addresses, either because they were not asked or declined to provide the information. How are such recipients to be reporting in the geographic table?
Current BPA rules do not allow individuals without physical addresses to be included in qualified circulation. Should BPA create an “email address only” category in our geographic table?
DIGITAL EDITION CONVERSIONS
In May 2009, the Board approved a rule change allowing publishers to convert requested print subscriptions to digital subscriptions. Rule B7.29 states, “Publishers may convert requested print edition subscriptions to electronic edition subscriptions, provided the subscriber who requested the publication receives advance notice of the conversion and is given the option to refuse the conversion. Evidence of the original request and the notice of the conversion shall be available at the time of the audit.”
A request was made to define the “advanced notice” period, and establish standard text for the conversion notice. Members have been advised the “advanced notice” period must give the publisher enough time to convert or not to convert the subscription, based on the subscriber’s response to the notice. While it is difficult to define a fixed period for the advanced notice (since it varies from pubisher to publisher), BPA could amend the rule to state the advanced notice must provide the publisher enough time to stop the conversion if the subscriber refuses to convert.
Regarding standard text, as long as the subscriber is given the option to refuse the conversion, the rules have been satisfied. However, we are currently developing samples for review.
DIGITAL EDITION REPORTING
At least one publisher member feels the current reporting format for digital copies--columns within the current tables--does not provide enough separation. The publisher claims the reporting format confuses advertisers.
BPA requires digital editions be reported separately throughout the report. Digital and print copies are combined in paragraph B1/C1, Average Qualified Circulation, on page 1, but must be reported in a separate paragraph B1/C1 on the back of the report. Paragraph B2/C2, paragraph B3a/C4, paragraph B3b/C5, and paragraph B4/C6 all report separate columns for digital and print editions. Digital copies have been reported in this manner for many years. What's your opinion?
BARTER TRANSACTIONS
In the Spring 2009, the BPA advisory committees reviewed a proposal to allow barter transactions to count towards paid circulation. The U.S., Canadian, and European committees voted not to allow barter transactions to count toward paid circulation. The Middle East advisory board voted to conduct more research on barter transactions, and develop rules and report formats for barter transactions at the next meeting.
BPA’s Canadian newspapers have eliminated the need for barter transactions with their new report format that combines “sponsored by third party and free circulation.”
Do you think barter transactions should count toward paid circulation?
CHANGE OF FREQUENCY
Publishers are dealing with the challenging economic environment in many ways. Some publishers are reducing circulation sizes, others are maintaining circulation size, but reducing frequency.
One publisher that has not changed circulation size is concerned a competing publisher that had a similar circulation size but reduced frequency as a way to cut cost has an advantage when it comes to BPA reporting. On the December statements, both publishers will report similar circulation figures but based on different frequencies. The publisher that reduced frequency will report the maintained Total Qualified Circulation figure on page one, but a lower frequency.
Will the buyers notice the reduced frequency when evaluating circulation? Changes in frequency are disclosed several places on the BPA report. Is that enough?
PRODUCTION STATUS
The BPA Worldwide website includes the following notifications for circulation statement production: at press, BPA hold, filed, proof sent, shipped, and typesetting. In practice, however, we are only using the “filed” status.
The most common causes for delayed statements are:
- Delinquent invoices
- Previous audit not completed
- Those with a history of error cannot release a circulation statement until it is audited
Late filings and extended proof of approvals also add to the delay, even if they are operating within the BPA Worldwide rules. What additional notifications should we include on the BPA website?
PARAGRAPH 8 – BUSINESS PUBLICATION STATEMENTS
Paragraph 8 on the BPA business publication statement reports “paid circulation data.” Included in this paragraph are: average annual subscription order price; issues per year; single copy sales price for the period; and renewal rate information.
Average annual subscription order price can be found in paragraph 7, average annual audited qualified circulation and current unaudited circulation statements. Issues per year can be found on page one. Very few publishers report single copy sales on business publications, and even fewer report renewal rates.
Single copy sales and renewal rate data do not warrant their own paragraph. This information would be better served reported in paragraph 9, additional data. Should BPA eliminate paragraph 8, paid circulation data, on business publication statement?
CHARITABLE DONATIONS
The BPA staff has received questions about fundraising programs where a portion of all subscriptions goes towards a school, scouts or a club. In addition, we received an inquiry regarding a non-deductible subscription tied to a charitable donation. The Board instructed staff to bring the item before the advisory committees again.
We have identified three different types of charitable contribution offers:
- “You buy, we give” offer. In this offer the subscriber purchases the magazine and the publisher makes a donation on the subscriber’s behalf.
- School/club fundraising program, where the consumer chooses from a wide variety of magazines and products, and the subscription agent returns a percentage of the sales to the school/club/organization.
- Non-deductible contribution offer. Here is an example: “In acknowledgment of your membership gift of twenty-five dollars or more you will receive a one year subscription to XYZ magazine. Your donation of twenty-five dollars or more is tax deducible less fair market value of three dollars and sixty cents for the subscription.”
Subscriptions from fundraising programs could be disclosed in the Explanatory paragraph. How do we disclose the other two offers? Promotional Incentives? Combination Sales? Or is a distinction necessary?
PUBLICITY
BPA received a request to review the following suggestions regarding publicity complaints/violations:
- In addition to posting a violation on the BPA website, the notice is listed in the “membership standing” section of the membership profile before the current statement.
- In addition to the history showing past statements and audit reports, past publicity violations are also listed. This will allow advertisers to see clearly the chronic offenders.
- A monetary penalty is assessed for those members found in violation of publicity rules. Currently a formal complaint costs $235.00, charged to the member that initiates the publicity complaint. If the complaint yields a violation, the offending member must reimburse the complainant.
- Any member with two violations in one calendar year is fined 10% of their annual audit fees.
BPA is not in favor of any of these options. What is your opinion?
QUALIFIED SHOW COPIES
BPA rule C9.9 states, “If trade show, consumer show, and convention distribution are reported as Qualified Circulation, the following comment shall be included as part of the Method of Distribution: ‘Distribution to trade shows, consumer shows and conventions are audited only to the event and not to the end recipients. An agreement from the event management has been obtained indicating that the event will accept a specified number of copies for redistribution. When the publisher exhibits and distributes copies at a show the following shall be stated: The publisher has provided a paid contract for exhibit space. Distribution to the event is supported by delivery receipts from a third party.’ ”
Current rules down not allow the publisher to transport the copies to the show themselves. Is there a way to qualify copies distributed at shows that do not use third-party distribution? Would a signed affidavit from a show manager, or senior employee of the show manager, attesting to the number of copies brought to the show suffice? Is this a practical solution?
SPONSORED CIRCULATION
Sponsored copies are reported as a sub-category of Paid circulation. On the BPA Consumer report, sponsored copies are not included in the average annual order price calculation, nor are sponsored prices and transactions detailed in paragraph 3a, Prices.
A publishing member is concerned about a competing title that has converted the majority of their circulation from Non-Paid Individually Addressed circulation to Paid Sponsored Individually Addressed circulation, while disclosing little information about the sales.
According to the BPA Consumer rules, a publisher does not need to factor sponsored prices into their average annual order price, nor do they need to note the details of the transaction or name the sponsor. Conversely, subscription sales purchased directly by end recipients are factored into the average annual order price and detailed in Paragraph 3a. Conversely, BPA Business rules require sponsored sales to be included in the average order price circulation – and be detailed in paragraph 5, Prices.
The member is concerned about the lack of reporting requirements for sponsored copies and suspects his competitor is selling sponsored copies at a very cheap unit rate. There is also concern that buyers believe the average annual order price is inclusive of all paid subscriptions, including sponsored.
Should BPA provide more disclosure on sponsored sales in consumer circ. statements and audit reports?
AUDIT REPORTS
Magazine members file two unaudited six-month circulation statements as part of their 12-month audit reporting period. If the audit reveals a material change to the claimed circulation figures, an auditor report is issued to disclose the specifics.
BPA rules prevent a circulation statement from being issued until the previous audit has been completed and released. If a statement is being held for a previous audit, as soon as the audit is released, the circulation statement is released. Once the new circulation statement is issued, the audit report moves to history on the BPA website (accessible under the VIEW HISTORY section of the web listing).
A publisher member feels audit reports become lost in our reports history, as most advertisers work from current circulation statements. Most publishers choose not to show their audit reports to media buyers as these reports often promote shifts or reductions to previously released circulation figures. This places the competing publisher in a negative selling situation.
Should those members with a history of adjustments be mandated to include their previous audit report comments on their two subsequent circulation statements, or be required to distribute the previous audit with subsequent statements (within the same pdf)?
Please use the "Comment" link below this blog entry to make your opinions known about any or all of the above items. As always, I look forward to reading your opinions.
Most of webinair was nonsense, a waste of an hour plus. That is unless, like me, you just reviewed the pdf (which took me ten minutes). Most important item hidden in this diatrab, slide 16. With regard to digital edition's 'gross deliveries', I quote BPA as admitting they are "...developing next generation metrics." Does that sound like 'open rates'? Does to me. Thanks for giving me what I need to scare my publishers away from digital editions.
Posted by: Jim Fischer | November 03, 2009 at 01:16 AM
It may be possible to bring further transparency to the category. A BPA publisher member noted the individual may not “directly” request the subscription; often the subscription is requested by an authorized assistant. The publisher proposed to change “direct request” to “individual request.” The publisher believes this more accurately describes the interaction with the subscriber, or the subscriber’s authorized assistant.
Individual request still does not accurately reflect who requested the magazine. I think most people would assume individual request means the actual subscriber.
If BPA follows this course they could be adding more categories rather than having a single category.
Advertisers will ask to see a breakout of how many direct requests from subscriber and how many direct requests from recipient's assistant.
This could lead to advertisers discounting direct request from recipient's assistant.
This would significantly increase costs if all requests had to come from the actual subscriber.
Posted by: Bruce Sprague | October 28, 2009 at 04:37 PM
Below are questions/comments BPA received during our recent webinar regarding reporting 3b:
Regarding age and source reporting: BPA's potential rule change doesn't truly address the issue of spending. It simply allows publishers to conceal the source and age of their circulation.
3b Source option change sounds good. Also make optional or eliminate Par 2 Adds/Kills as was previously proposed.
For 3B, at one time there was a consideration to report just one year, then two-three year combined. Did that go away or will it still be an option?
Wouldn't a publisher rather reduce their 3b aging objectives versus not being audited? I think the latter is worse sales story than reduced objectives.
Is it a consideration to make 3c optional? That is less relevant in a lot of industries than 3b.
Age & source reporting: you indicate that the "market" decides...do you mean that there has to be agreement within a market whether to report or not? Or does this really mean that it is up to the publisher to decide if they want to report or not?
If you allow publsihers to opt out of reporting age of circulation you are opening up a can of worms. How will advertisers know if a publisher is re-qualifying people on a regular basis? You could basically do nothing for two years and then in the third year you do a major requal push. BPA shouldn't just be interested in auditing accuracy, you must audit quality as well. For those publishers who continue to refuse to audit demographics when their competitors do, this will not allow them to do nothing for requals for several years and how will the unsuspecting advertiser be made aware of this?
Posted by: Glenn Hansen | October 28, 2009 at 03:18 PM
Below are questions/comments BPA received during our recent webinar regarding reporting "Request" and Frequency:
What about publishers who opted NOT to audit as one Direct Request but continue to break the request down between written, telemarketing and internet?
RE: Controlled Circ, "Individual Request." If we go to "Individual" request, how do we handle responses from Admin Assistants/Secretaries, etc.?
Why would the change of frequency or lower TQ be BPA's responsibility ? It's a competitive strategy issue for the publisher.
Change of frequency and/or reduced circulation is a business decision and up to the publishers sales force to ensure media buyers understand their decisions (vs the competitors).....clearly not a BPA issue.
Posted by: Glenn Hansen | October 28, 2009 at 03:08 PM
Age and Source Reporting:
This is indeed a tough one and I feel the pain on both sides. The yearly cost of maintaining a high percentage of 1st yr & personal request is incredible. Actual BPA costs are peanuts compared to the marketing costs involved in churning over your database year after year, as well as paying the salaries of those maintaining the circulation lists (whether in-house or outsourced).
I have myself been given the mandate of achieving and maintaining 100% in both areas many times in the past 18 years and each year brings new challenges and higher costs.
Many publishers are forced to either a) keep their print alive without an audit, which puts them at a very competitive disadvantage, b) continue to produce an audit and struggle financially to maintain adequate 3b stats, or c) simply close their book completely.
On one hand allowing the publisher to decide how often within the 36 month period they are willing to re-subscribe their circulation is a good idea. Everyone has the same option.
On the other hand it does open the door for a lot of what I would consider misleading circulation claims.
If I had to pick, I’d say leave it as is. I’d love to reduce my circ costs but this isn’t the way to do it.
Digital Editions Reporting:
I don’t have a strong opinion either way. I haven’t personally experienced any complaint or confusion regarding the current reporting structure, but wouldn’t have a problem with the suggested new format either.
Change of Frequency:
Yes it is enough. The decision to change frequency and/or reduce circulation is a business decision and it’s up to the sales force within that business to ensure the media buyer is educated on those decisions, and how the resulting circulation compares to that of a direct competitor. This is not the BPA’s responsibility.
Audit reports:
Absolutely – I’m agreeable to either option. I’d also like to see an additional section on the BPA site alongside current statements & historic statements to house just audit reports.
Posted by: Doni Moore | October 27, 2009 at 07:16 PM