12 Building a print circulations audit system

12.8.2. What CAN a circulations audit certificate display?

An audit certificate shall contain only data that is auditable. Auditable data must be fully supported by enough (verifiable) and indisputable proofs (documents and information).

In order to make this clear, let me offer an example.

The daily newspaper publishers (members of an ABC) may want to report their circulation figures on a daily breakdown (or issue-by-issue). They may have clean and auditable records on the printing side (contract with the printing plant, daily orders, delivery notes, etc. – all well maintained and verifiable records). If any of the distribution channels (e.g. one of the newsstand sales subcontractors) doesn’t report daily sales breakdown (i.e. they provide only weekly cumulative sales figures), it is not possible to report daily sales figures on the audit certificate because there is no physical evidence of these details. The solution in this case is to report just the averages per issue for the given audit period.

The point mentioned above underscores the necessity for using the principle of the lowest common denominator. The weakest – poorest documented – link in the chain is the determinant for the whole system. So, in this case, the daily newspaper publishers may want to have daily sales figures in their audit certificates, but they will not be able to. Of course, they may want to eliminate the data of this distribution system, in which case the figures in the audit certificate will be lower than in the reality. Another approach is to avoid auditing those publications which are distributed by a given newsstand subcontractor, in which case the scope of the ABC will be narrowed. Consequently, some of the publications will not be audited, making some of the publishers unhappy.

The thinking described above (testing the desire against the reality) must be applied to any type of circulations data. Sometimes there is not enough independently verifiable documentation and information to support a type of circulation data, sometimes there is just not enough detail of the information.

Here is a (not exhaustive) list of circulation data to be displayed on a certificate:

• Number of copies printed and delivered to the different distribution channels.
• Copies sold via subscriptions.
• Copies sold at newsstands.
• Other types of sales.
• Returns.
• Copies distributed for free.
• Other types of distribution.

Given the complexity of the distribution activities, an ABC may decide to go into more depth for a given category. As an example, the copies sold via subscriptions can be classified in many types: subscriptions to individuals and to legal entities; subscriptions to associations; subscriptions at full and less than full subscription rate; gift subscriptions; multiple subscriptions, etc.

There may be a need to produce different types of audit certificates for the different types of publications. The free distributed publications may need a different format from the paid publications. Business-to-Business (B2B) audit certificates may differ, and daily newspapers may also have different types (or breakdowns) certificates.

The greater the types of certificates, the more – and costly – the work of the auditors, and the ABC. Let alone the need for explanation of each type to the market (after all, it is the role of the ABC to give user instructions – or how to read these certificates – to its market). I suggest that a new ABC keep the format and number of audit certificates to a minimum. Ideally, an ABC would have only one type of certificate, for all types of publications.

In order to cope with the variety of circulation data, to give proper reporting/claiming instructions to the publishers, and proper audit protocols to the auditors, it is absolutely necessary to define in detail each and every type of circulation data. This is necessary for both the data types which will be not published, but will be the subject of the audits!

The goal of having an audit system for the publisher is to provide the publishers’ customers (advertisers, media agencies, etc.) with credible and accurate circulation data for their advertising planning and decision-making process, as well as to be able to do strategic planning and competitive analysis on a credible basis.

The audit certificate should be discussed in full detail by publishers, advertisers and media agencies. Because the primary users of the audited information are advertisers and media agencies, the ABC must explain to them very clearly the content of the audit circulation certificate. They must be asked by the publishers about what data they need (or may need). The publishers must also explain the processes, and the media and advertising value of each type of circulation data that will be published. No publisher should expect from an advertiser, nor from a media agency, to know how the publisher is operating. They are on the other side of the table. This is a continuous education effort, which will lead to the best audit product, for both publishers and non-publishers.

This continuous reconciliation between publishers and non-publishers is important for another reason; namely, creating an optimal audit system.

The optimal audit system provides only data necessary to all the players, at an acceptable price. Many publishers may want to have data unnecessary for non-publishers, and many non-publishers may ask for too much (and too expensive to audit) information. Don’t be blinded by the theoretical aspect of an ABC system; rather, seek a practical approach. Perfection cannot be reached, and reaching for perfection can become very expensive.

It was mentioned earlier that there will be data that will not be reported or claimed, but still has to be audited. Print-run data is a case in point. Some ABCs may not want to publish the print runs, but neglecting the audit of these figures is quite risky, since the number of printed copies is the MAXIMUM amount which goes into the distribution systems (there cannot be more copies distributed than printed! – therefore the print run figures are a control basis for the total circulation). Avoiding the verification of the print runs gives room for manipulation of the data. And this is not the only case where an ABC can face risks.

Regardless of the size of the data set to be published in the audit certificate, an ABC must make sure that the audit itself is a comprehensive verification of the production and distribution operations.

Here’s some advice for advertisers and media agencies.

• Publishers are serious about YOUR advertising money. Don’t fool yourself. If there is an incentive for publishers to manipulate figures, there will surely be some who will do so.
• Publishers will always try the cheap and easy way. Make sure you actively participate in designing the audit system. Ask a lot of questions, and clarify each and every detail. A circulation audit system is as good (for you) as you get involved in its construction. Once the circulation system is in place and running, don’t leave. Stay with the ABC because you need to control whether or not publishers are complying with the rules, maintaining the highest standard of the audits, let alone the times when the rules have to be changed.

Another key principle in designing the audit system is the reliability of data on the audit certificate, for all (similar types of) publications. This means that the whole range of certificates should consistently contain the same type of data, and the same structure (breakdowns). Moreover, the different certificates should cover the same periods of time. As an example, it can only create confusion if some certificates will provide print runs, and other will not, or some will cover a March to August audit period, while others will cover a September to January audit period. These inconsistencies will definitely not serve the goals of the ABC, nor of the market.

A final thought for all the participants involved in the ABC development process: revisit on a continuous basis the values and principles stated at the beginning of this handbook, and make sure that each and every decision taken on the audit system does not weaken any of these values and principles. If you forget to revisit this litmus test and adhere to the founding principles, the image, and eventually, the credibility of the ABC will suffer.

Once there is an agreement over the circulation audit certificate, its time to go in to the details of defining the circulations terms..

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