BPA Worldwide Blog

BPA's Board of Directors announce new rules & amendments at May 2008 meeting

We have summarized new rules changes passed by BPA’s Board of Directors at its semi-annual meeting held May 22, 2008. As always, I welcome your comments to any of these new rules or rule amendments. To post a comment, scroll to the end of the blog to the "Comments" section. Follow the prompts from there.

Unless otherwise specified, all changes are effective immediately.

The Executive Summary of the new rules and rule amendments may also be accessed through the “Rules” tool on the bpaww.com home page, or the direct link provided below:

BPA Executive Summary May 2008

Or, if you prefer, please contact your BPA Member Relations Manager, or any of our audit staff, if you have questions. MRM contacts can be found on the BPA website.

Board Actions Applying to Business Publications and Consumer Magazines

* Digital Pre-Audits required only at company level: Over 220 BPA members report digital circulation on their BPA Worldwide circulation statements and audit reports. Upon review of the pre-audit results of these 220 members, it has been determined that once a publishing company passes a digital pre-audit, no further pre-audits of that company using the same vendor will be required.

Based on this information, the Board ruled to only require digital pre-audits at the “same company/same vendor” level. Once a company has passed a digital pre-audit, other company-owned publications and magazines using the same vendor for distribution of the digital magazine can begin reporting digital circulation without conducting a pre-audit provided there is no change in the system software. However, upgrades to existing software or changing to another vendor could necessitate a pre-audit. This amendment does not apply to service providers overall. A pre-audit is required for each publishing company that uses the same vendor. There are two variables to the pre-audit: the vendor and publishing company. Both interact with each other and the pre-audit validates the end result.

* Paragraphs 7 and 9 amended (effective with December 2008 reporting): BPA reports audited data for five successive calendar years in Paragraph 7 (consumer statement) and Paragraph 9 (business statement). The data is intended to be used for trend analysis by media buyers and advertisers. However, the Board noted that reporting the data by circulation statement periods would be more useful since data would be reported in six-month increments instead of on an annual basis.

As a result, the Board ruled that effective with December 2008 circulation statements and audit reports, historical data will now be reported in Paragraphs 7 and 9 for the previous three years, in six-month (circulation statement) intervals instead of the previous five-year, annual reporting requirements.

* “Digital” copies renamed “electronic editions”: There are a number of definitions for the word “digital” in a media owners’ portfolio, including: digital magazines, websites and email newsletter products. To eliminate this confusion, the BPA Board voted to change “digital” to “electronic edition” throughout the rule book when referring to electronic versions of print publications and magazines.

* Integrated Media Box Requirements: BPA Worldwide allows the reporting of audited integrated media on the cover of circulation statements. This information includes but is not limited to website traffic, event attendance, pass-along rate and email newsletter distribution.

To ensure that all data is reported on a timely basis, the Board ruled integrated data be audited within the period reported on the circulation statement, but audited data may be older if the most recent occurrence, such as an annual trade show, conference or pass-along receivership audit falls outside the statement period.

Board Actions Applying Only to Business Publications

* Paid Company Requests qualify as “Direct Request from the Recipient”: Under current BPA rules, company request paid subscriptions are reported as “request from recipient’s company” in paragraph 3b.

In an effort to create an industry standard for this source that would be acceptable to both fulfillment companies and media buyers, the Board ruled paid copies currently being reported as “request from recipient’s company” will now be reported as “direct request from the recipient.” This change creates a consistency to both media owners and buyers regardless of what audit organization is used.

* Additions and Removals—National Medical Association lists: At the December 12, 2007 Board of Directors meeting, a rule change was approved exempting names received from national medical associations from the reporting of additions and removals. The basis for the rule change was the American Medical Association (AMA), American Dental Association (ADA) and the American Osteopathic Association (AOA), provide publishers with names of individuals; however, publishers may not possess these names nor own them on their subscriber databases. As a result, in many cases, publishers do not have the ability to report names derived from medical associations as additions and removals since they do not appear on the subscriber database.

In an attempt to make the rule more global, the Board changed specific referrals to the AMA, ADA, and AOA to “National Medical Associations Lists”. Further, if a national medical association does provide the publisher with names that can be added to a subscriber database, the publisher should report the additions and removal for these subscribers.

Board Actions Applying Only to Consumer Magazines

* Reporting Average Print Orders on Consumer Magazine statements (effective with December 2008 reporting): A BPA Worldwide member requested average print order be reported on BPA Worldwide consumer magazine circulation statements and audit reports. Under the current rule, average non-qualified circulation is reported on the consumer reports; however, single copy sale returns is not included in the figure. Returns are excluded from the report to protect the publisher’s proprietary sell-through data.

The Board voted to add additional disclosure to the average non-qualified circulation claim by changing the current consumer report template to include the language “figures do not include single copy sale returns” in the header of the non-qualified data section.

* Loyalty Point Programs: The Board ruled to allow for programs rewarding participants based on activity, in addition to those that reward for financial transactions. For example, participating in surveys may be rewarded with loyalty points than can be exchanged for goods and services; however, all programs must have the approval of the BPA president.

Board Actions Applying Only to Canadian Newspapers

The Board approved several additions and amendments to the existing daily newspaper rules in Canada.

The following daily newspaper rules have been amended:

* Reporting Format –

* Circulation will be reported in two primary categories: “Paid for by individual recipient” and “Sponsored by third party or free”.
* The circulation will be reported by Census Metropolitan Area (CMA) and non-CMA.
* Reporting will be annual based on the calendar year. No circulation statements for dailies will be issued, only audit reports.

* Premiums – Publishers must collect payment for the newspaper at greater than the full value of the premium offered.

The following daily newspaper rules have been added:

* Occasional Subscriptions – The delivery of issues not specifically identified as part of a new or renewed subscription.

* Subscription Conversions – Subscriptions resulting from offers that are based upon the assumption that the offer has been accepted unless specifically declined.

* Partner Distribution Agreements – An agreement between two newspaper publishers to distribute newspapers on days not published by one newspaper.

* Credit Subscriptions – A four percent paid circulation allowance has been established for credit subscriptions and arrears. The average copies served as a result of the allowance shall be reported in the explanatory paragraph.

BPA Business Publication statement reporting amendments proposed

Here are the issues making the b-to-b circulation circuit these days. A few interesting proposals are on circulators’ minds—including consolidating data within paragraph 3b; eliminating additions and removals; and digital site licenses. BPA will be forming a tripartite task force of media owners, buyers and advertisers to study the points further. If you would like to participate in the task force initiative, please let me know. I also invite your feedback on any or all of these points.

Here are the amendments to be considered by the b-to-b task force:

·        In an effort to ease industry burden, BPA has been asked to consider consolidating “qualified within one year” and the “qualified with in two year” categories within Paragraph 3b (Qualification Source and Age). The change has been proposed to ease the workload on circulators who have seen their responsibilities increase with expanded portfolios, and to improve economics.

Questions that come to mind: Will publishers be comfortable competing with the new consolidated category? Will media buyers accept a new, consolidated 3b? Should 3-year be eliminated, limiting all circulation to within 24 months and simply report sources only?

·        We received a request from a member to eliminate the reporting of additions and removals on BPA’s business circulation statements and audit reports. (Additions and removals are not required for consumer magazines or newspapers.)

The member pointed out a number of challenges, including:

1. Additions and removals require complicated programming for fulfillment systems;

2. Advertisers do not fully understand the nature of additions and removals;

3. Publishers reporting print and digital subscribers often do not have the ability to report additions and removals correctly; issue to issue variances in paragraph 2 provide adequate disclosure of variances;

4. Additions and removals are not required to be reported for paid subscribers;

5. Medical journals do not report additions and removals;

6. Continuous service is becoming less important to the market, but it can be checked through record history in fulfillment systems rather than through additions and removals;

7. BPA staff reviews hundreds of circulation promotions from publishers each year and very few of the promotions focus on addition and removal activity.

            

·        BPA’s Board of Directors recently voted to not allow the number of people who have access to a digital site license copy to be reported as qualified circulation. Site licenses and the copies the license represent may be reported in the explanatory paragraph.

We have been asked to revisit the discussion, specifically as it relates to “paid” site license agreements.

Should people who have access to digital copy on their company’s server be counted as qualified circulation, or only those who access the copy? Is “paid” digital site license distribution more credible than non-paid digital site license distribution?

·        A rule amendment to make optional the reporting of paid circulation data (price, length of sub, incentives, how ordered) for business publications was presented and will be reviewed by the task force.

Here’s the background: Paragraphs 5 – 8 report total new and renewed qualified paid subscription orders/sold for the period. Currently, publishers are required to report these paragraphs if their average paid circulation exceeds 50%. They may also elect to report these paragraphs if their paid circulation is below 50%.

Only 134 or 7% of BPA Worldwide business publishers have over 50% average qualified paid circulation. Over half (67) of these publications are association publications that pay for the magazine through non-deductible dues and therefore exempt from the rule.

There is precedent to such a move. Several years back BPA Worldwide eliminated the mandatory reporting of renewal percentage for paid publications.

I look forward to reading your comments.  To Comment, click on the COMMENT link below, read what others have said and at the end of the comments string you will find where you can add your comments.  They will be sent to me, I will read them, answer if I can and then post them.

Migrating Toward "E"

I was recently asked by DM News to give my thoughts on the future of digital media as seen from the BPA vantage point. Here is the condensed version:

We believe the market will continue to witness the trend of media owners migrating toward “E” to monetize their brands across multiple platforms. While the print product will remain a strong part of the mix, publishers who don’t expand into the digital realm and focus on the quality of the user will surely miss out on the marketing dollars that are pouring into that arena.

For the complete story, please click here.

As always, I welcome your questions and comments.

Media owners take note: Christmas retail shows continued consumer shift toward online

It may not quite spell the death of retail just yet, but Christmas 2007 was undeniably an internet holiday.

Consumers in the US spent almost $28bn online during the Christmas season, up 19% on the previous year, whilst around 4.4m surfers - equivalent to one in thirteen of the UK population - purchased items online on Christmas Day itself, a year-on-year increase of 269%.  According to internet security company Retail Decisions, over the whole three-day holiday period total online spend in the UK hit an estimated £440m.

That’s great news for retailers, of course. It’s also a further indication for media owners, buyers and advertisers that, not only our media consumption, but so much of our social interaction will increasingly revolve around the online space. Shopping, social networking, entertainment and news are already internet-led activities.

However, as trading online becomes the norm, as it surely will within five years, it is essential for the credibility not only of the medium but also of those that operate in it, that the same safeguards and standards that we have applied to our offline activities are carried through to the online space.

The internet is maturing fast, despite the fact that new opportunities are unveiled literally by the day. The time when the dot-com collapse rocked our faith and led to a pull-back in investment in online seem a long time ago.

And this means that media owners, buyers and advertisers can no longer afford to conduct their business in silos. Advertisers need to make buying decisions across all media platforms and based on evidence of where potential consumers are going to source their information or buy their products. 

This focus on ROI demands that online embraces the same level of independently verified, in-depth data as their print contemporaries. It will lead to demands for media owners to report the geographic origin of traffic to their sites, so that those who advertise globally can make informed decisions on where to place their spend; it will lead to greater scrutiny of ad serving networks, and above all, it will demand demonstrable evidence from media owners that what an advertiser pays for, it actually gets.

It’s going to be an interesting year.

Mandatory telemarketing recording initiative gets tweaked

Last month our Board of Directors approved changes to several existing rules (click here for the latest updates). The most interesting—and wide-reaching—of the changes looks to be the amendment to the mandatory telecommunication recording initiative that provides an exemption to those subscribers who—while otherwise meeting all qualifying criteria—refuse to be recorded.

In these cases, telemarketers are permitted to fall back on asking the Personal Identifier Question to prove personal request of a publication or magazine.

One question I have already heard regarding this rule is this: “What if a publisher comes back to BPA claiming that half of their telemarketing file refused to be recorded?”

Here’s what I’ve been telling them: Over time BPA will build trend data on the results–as we have now for confirmations. We will know what the normal refusal rate is overall and by market. If three publications in a market have 2% refusals and the fourth has 59% refusals…well, draw your own conclusions.

I’ll be interested to hear your feedback regarding this rule amendment or any of the others.

BPA requires recording of teleservices calls beginning January 2008

By Glenn Hansen, President and CEO, BPA Worldwide

I look forward to receiving your comments.  To send one, click on COMMENTS at the end of this blog.  I will review all comments before posting.  If you wish to remain anonymous in the posting, please so indicate in your comment, but of course, this blog will be more robust if we all identify ourselves.

I have created this blog to foster an open dialog on the matter of recording solicitations by telephone of requests to receive magazines.  I have added information below posted on our web site to start the discussion.  Please write back and present your issues and questions so that we may make sure all points of view are heard and considered.

Prospectively, I envision that BPA will use blogs for dialog on circulation audit rules we are considering.  I would also like your point of view on this.

Pardon the length of this introductory BLOG, but I thought all the information necessary to start a fully informed discussion.

On Wednesday September 13th, I presented to the American Business Media Circulation Committee on this subject.  That presentation will be added to and then presented as a free webinar.

Here now is the text to set this up:

At its meeting in December 2005, BPA Worldwide’s Board of Directors passed a rule that will make recording for outbound business publication circulation telemarketing efforts mandatory as of January 1, 2008.

The Board vote was the culmination of extensive discussion of all potential benefits and “downsides” among all of BPA’s worldwide committees and advisory boards comprising media owner, advertiser and advertising agency representatives, as well as the Telemarketing Managers’ Advisory Committee.

Several critical realities drove the ultimate decision:

Fact: B-to-B publications are more reliant than ever on telemarketing as a circulation source. Indeed, telemarketing has eclipsed written sources, to become the number-one source of B-to-B publication personal direct request subscriptions. According to the latest American Business Media Circulation Committee analysis of Paragraph 3B circulation statement data, for 2004, telemarketing accounted for 26.9% of total circulation across audited publications, versus written sources’ 24.6%.

Fact: Advertisers and media buyers are more focused than ever on accountability and demonstrating hard return on investment for their advertising dollars.

Fact: Over the years, the advertising community has not been receptive to publisher proposals to allow telemarketed subscriptions to be incorporated with “written direct request” for purposes of reporting on the circulation statement. Thus far, advertisers/media buyers have continued to affirm that they want the disclosure assurance of having telemarketing broken out as a separate source. However, key advertiser and media buyer executives on BPA’s Board and advisory committees have indicated that universal outbound recording will represent an important step in providing the quality control assurance that they would require as a prerequisite to approving a revised reporting format in which written, telemarketing and, potentially, Internet/email are consolidated.

Fact: Alarming increases in identity theft and concern about potential misuse of personal information are creating growing resistance to requests for such information, including the “Personal Identifier,” or “PI” request that must be asked, in the absence of recording, to provide auditors with a method of verifying requests. (Under BPA rules already in effect, the PI question need not be asked if a call is recorded.)

Result: The media owner, advertiser and agency executives on the BPA Board concurred that, taken together, these facts point to the need for action that will safeguard and enhance the viability and status of the telemarketing source for the years ahead, and that outbound recording represents the most effective and efficient means to this end.

I believe the growing importance of telemarketing as a source is precisely the reason that media owners and media buyers on BPA’s Board ultimately voted to take the necessary steps to ensure that the value of the circulation generated by telemarketing is beyond question, as far as advertisers and media buyers are concerned. Recognizing advertisers’ greatly heightened emphasis on accountability, these executives—as well as the leading telemarketers who comprise BPA’s Teleservices Advisory Committee—determined that it is in the best interests of the industry to be able to demonstrate beyond any doubt that telemarketing is a source that deserves to stand head-to-head with written and Internet sources.

Concerns about potential increases in telemarketing costs continue to be a major point of discussion. Media owners are more focused than ever on controlling and reducing operational costs wherever possible, and publishers’ ROI is always a critical component in shaping BPA policies. 

I do keep in mind that BPA is, after all, an industry service organization that is governed by its members and their respective needs.

But I also believe that media owners understand the need to safeguard their interests for the longer term—including their ability to compete effectively for advertising dollars in an increasingly challenging marketplace. This is why a number of the leading B-to-B media companies have for some time voluntarily made recording capability an internal, corporate prerequisite for using any telemarketing vendor.

After reviewing the facts, most media owners supported recording not only because of the accountability factor, but because there is no basis for assuming that costs will rise as a result of recording, when all is said and done.

Looking at the full picture, I believe that the advantages that come with recording—including the ability to maximize the yield and efficiency of calls, as well as reduce some auditing cost factors—will over time counterbalance, and outweigh, any short-term additional costs.

Specifically, outbound recording enables the following operational advantages:

• Gathering of multiple personal requests—either directly from recipients or from recipients’ assistants—for the same publication in a single call. This is true today: Existing BPA rules allow such multiple requests, as long as the calls are recorded.
• Foregoing the necessity to ask existing and prospective subscribers the “Personal Identifier” question. Importantly, many leading telemarketers who already record calls report that, today, asking the PI question is more likely to depress response (i.e., cause business professionals to end a call, or “drop off”) than disclosing that the call is being recorded. These telemarketers point out that, whereas personal questions are viewed with increasing suspicion, people are increasingly accustomed to being informed that a call is being recorded for customer service or other reasons. Again, the BPA rules already in effect allow those who record to forego the PI question.
• Decreased auditing confirmations, resulting in lower costs for this component of the circulation audit. In most cases, recording enables BPA to significantly reduce the number of calls made to subscribers by BPA staff for the purpose of verifying a subscription’s requested status. The number of calls required for statistical verification are directly reflected in an individual publisher’s cost per audit.
• Significantly enhanced potential for gaining the advertising community’s approval for reporting telemarketing, along with written and Internet/email, in a consolidated format. Again, the enhanced quality control assurance made possible by universal outbound recording is a critical step in this direction, in the minds of many in the B-to-B advertising/media buying community.

Additional important facts about outbound recording and the steps being taken to ensure that the industry can comply as seamlessly and cost-effectively as possible:

• Ample time has been provided for compliance. We have built in two years to enable member publishers to work with their telemarketers or prepare their in-house telemarketing operations.
• Recording software and equipment technology continues to become cheaper and faster. Telemarketers and publishers who record confirm that this factor has been an important factor in enabling them to implement recording.
• The rules will appropriately reflect practical considerations. For example, a reasonable reporting tolerance level will be incorporated for subscribers who refuse to be recorded, and it has been established that mandatory recording will not apply to subscription requests/requalifications garnered through inbound, subscriber-initiated calls.
• We are actively engaged in working with publishers and vendors to ensure that they have reasonable, cost-efficient means of complying with outbound recording. Based on research by BPA’s Teleservices Advisory Committee and other advisory committees, BPA is developing a detailed, practical guide to all specifics associated with outbound recording, including compliance with state and international recording disclosure requirements; information on available, cost-efficient recording technology; and test-based recommendations for minimizing costs and maximizing response. This guide will be distributed to all BPA members in the B-to-B arena, including media owners and associate members (telemarketers, fulfillment bureaus, etc.). It will also be made available to the industry in general via posting on BPA’s Web site, bpaww.com.
• BPA will support outbound recording with a variety of member education, outreach, and customer service initiatives. BPA is committed to providing all members with the educational and customer support services they will need to implement recording. In addition to BPA’s Guide to Outbound Telemarketing Recording, BPA will offer free Webinars and live educational programs. Members will be apprised on an ongoing basis of all recording rules/policy developments, and offered insights/advice from media owners and telemarketers regarding specific steps that can be taken to minimize costs and maximize results/efficiencies.

Click here to see the actual rule amendments in their entirety.  Rule amendments

Click on COMMENTS below to submit an opinion.  All opinions will be reviewed before posting.  If you wish to be anonymous in the posting, so indicate in your comments.