ABC Board Cuts Audit Costs for Newspapers, Freezes Rates for Magazines

Magazines may also see audit costs reductions as early as November.

By Chandra Johnson-Greene
07/30/2008

In direct response to the newspaper industry’s ongoing struggle to generate revenue, the Audit Bureau of Circulations has announced that it will reduce audit costs by almost half for some U.S. and Canadian newspapers, while freezing costs for other newspapers and most magazines.

ABC had announced in March that U.S. 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. This week, the ABC board agreed to advance this timeline by six months to Oct. 1, 2008, and expand the option to Canadian newspapers.

Newspapers with circulation between 50,000 and 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.

The ABC board also approved a new flat-rate billing model for field audit services for fiscal 2009, effectively freezing audit costs for most other ABC newspapers and magazines.

“ABC has typically billed publishers based on an hourly rate,” said Michael J. Lavery, ABC’s president and managing director, in a statement. “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.”

According to Teresa Perry, an SVP at ABC, titles that have “too much versatility” during their auditing periods will continue to be billed at the hourly rate. The bulk of those titles would be found in the non-paid category.

Audit Rate Reductions for Magazines Too?

While the forecast for the magazine industry doesn’t appear to be as bleak as it is for newspapers, l the board is considering reducing costs for them, too.

Perry says changes could be seen as early as November, but most likely in early 2009.

The ABC board also agreed to allow consumer magazines to test new circulation marketing programs 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.

“We're trying to encourage publishers not to shut the door on new marketing opportunities just because the audit process is unknown upfront,” says Perry. “Traditional sources, such as direct mail, may not be as available, so it’s wise to explore non-traditional sources and to partner with others they may not have the audit structure.”

The board also voted to adopt 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, Web site activity, e-newsletter activity and pass-along receivership in a single ABC statement. The board also agreed that paid Web site subscriptions could qualify as paid digital editions of business magazines.