ABC Board Reduces Audit Costs, Freezes Rates, Modifies U.S. and Canadian Newspaper Rules

    Sanctions Toronto Sun, Elects New Directors

    SCHAUMBURG, Ill., July 29 /PRNewswire-USNewswire/ -- The board of the
Audit Bureau of Circulations (ABC) took several important steps to respond to
current market conditions, nearly cutting audit costs in half for some U.S and
Canadian newspapers and freezing costs for most other newspapers and

    ABC had previously 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.

    The board also gave its initial approval to rules allowing all U.S. and
Canadian 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, a newspaper's most recent audit cannot contain an adjustment of more
than two percent and its third-party circulation (e.g., copies purchased by a
business in bulk quantity and distributed to customers) cannot exceed five
percent of its total paid circulation.

    Newspapers with circulation between 50,000-75,000 will also 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's board chairman, Don Miceli, vice president of global media
resources at Kraft Foods, noted that the board wants to send a clear message
to the market. "All of us at ABC recognize the challenging environment we
operate in today," he said. "We are committed to streamlining the audit
process and reducing costs where we can to accommodate the needs of our

    The ABC board also gave final approval to a set of sweeping rule
modifications for U.S. newspapers. The changes, which received initial
approval in March, are intended to simplify ABC rules, reduce audit costs and
provide greater pricing and marketing flexibility to publishers. Several
rules, including flexible pricing, take effect in April 2009. The remaining
rules, which include reporting "other paid circulation" (copies purchased by
sponsors or distributed to schools and newspaper employees) as nonpaid
"verified circulation," take effect in October 2010. Complete details are
available on ABC's Web site at [].

    Billing Model Changes
    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. In addition, ABC will unveil several new online
filing tools in September that allow publishers to further lower their costs
by submitting advance audit documentation and worksheets via ABC's Web site.

    "ABC has typically billed publishers based on an hourly rate," said
Michael J. Lavery, ABC's president and managing director. "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.

    Toronto Sun Sanctions
    The ABC board unanimously voted to sanction the Toronto Sun for a
significant audit adjustment exceeding five percent related to its Sept. 2007
audit. Although the Toronto Sun resigned its membership in ABC on April 16 of
this year, the board voted to apply sanctions because the audit was conducted
while the newspaper was still an ABC member and because the Sun was aware of
the discrepancies before it resigned from ABC.

    ABC expects to issue the Sun's Sept. 2007 audit report within the next 10
days. The report will show downward circulation adjustments of 21,004 average
daily copies (11%), 18,191 average Saturday copies (12%), and 49,869 average
Sunday copies (15%).

    Should the Sun choose to rejoin ABC in the future, it would be required
to submit a plan of corrective action and undergo semi-annual audits for two

    Modifications to Canadian Newspaper Rules

    ABC's Canadian members continue to review the U.S. newspaper rule
modifications for applicability in Canada. In that regard, the ABC board gave
its initial approval to several rule changes, based on the recommendations of
Canadian advisory committees.

    In addition to the earlier-noted option of biannual audits for newspapers
below 75,000 paid circulation, Canadian newspapers may also immediately
upgrade current home subscribers to a greater frequency, provided the
subscriber has the option to decline the offer.

    All Canadian and U.S. newspapers may immediately establish separate basic
prices for their replica electronic editions

    Finally, to simplify organization and understanding of all newspaper
rules, a new section of ABC's bylaws and rules, Article 20, was created to
house the rules governing Canadian newspapers and Article 10 was dissolved.

    Other Board Actions

    The ABC board agreed to 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 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

    The board also agreed that, effective immediately, paid Web site
subscriptions could qualify as paid digital editions of business magazines.

    Recognizing that a newspaper's reach encompasses more than just the
traditional print product, the ABC board agreed to test a new optional
consolidated report that would allow newspapers to display a variety of print,
online and audience data. For example, a publishing organization may feature
its daily newspaper, a free distribution product that features real estate or
job classifieds, a free newspaper targeted at commuters, and its Web site
audience. ABC must audit all of the data on the report, which will be
available as a test for the Sept. 2008 reporting period.

    At the request of the Newspaper Association of America's Newspaper
Audience Leadership Committee, the ABC board agreed to modify the requirements
for newspapers that participate in its Audience-FAX initiative. Larger (tier
1) publishers will now be required to report Web site unique visitors using
panel-based sources like Nielsen Online or comScore, when available.

    ABC also agreed to form a new Digital Advisory Committee to help it
examine trends, business opportunities and ABC's role in auditing emerging
media. The move follows ABC's successful launch in June of its new Digital
Technology Accreditation program

    New Directors Elected
    The ABC board elected five new directors at its recent meeting:  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 Corp.; Lindsay Valk,
senior vice president of analysis and planning, consumer marketing, Hearst
Magazines; and Brenda White, senior vice president, Starcom Worldwide.

    The ABC board of directors meeting was held July 23-26 at Manchester
Village, Vt. For a complete summary of board actions, visit ABC's Virtual
Pressroom at

    With nearly 4,000 members in North America, ABC is a forum of the world's
leading magazine and newspaper publishers, advertisers and advertising
agencies. The organization provides credible, verified information essential
to the media buying and selling process. ABC maintains the world's foremost
online database of audited-circulation information and a growing array of
readership, audience and Web site usage data. To learn more, visit


For further information:

For further information: Kammi Altig, +1-847-879-8232,, or Laina Krisik, +1-847-879-8432,, both of Audit Bureau of Circulations Web Site:

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