Crikey yesterday talked to a senior figure in the world of newspaper
and magazine circulation management about the rorting of audited
circulation figures. According to this person, who is now out of the
game, newspaper circulations are “cleaner than they used to be” a few
years ago. Why? “Purely for the guilt, and going to jail.”

But the senior figure acknowledges circulation fiddling still goes
on – “we know that some people have stepped outside the rules” – and
explains the attitude of senior newspaper and magazine circulation
managers: “When my boss said ‘increase the circulation’ I did it within
the rules, and if that meant reduced price or discount copies I didn’t
have a problem with that.” But the figure conceded that the Audit
Bureau of Circulation rules did not identify bulk copies where no money
changed hands – such as hotels and airports – arguing that these copies
were beneficial for advertisers, even if they weren’t aware they
weren’t being paid for.

And here’s more from Crikey readers on the ongoing newspaper and magazine circulation rorting issue.

From a magazine industry insider:

About four years ago New Idea joined forces with
McDonalds to off-load magazines, as circulation at that time was
nowhere near the official audit number. During the promotion everyone
who bought a hamburger received a copy of New Idea (whether
they wanted it or not ). The magazines were counted in the audit number
because it was said that it was a “bundled” purchase. The consumer did
not pay a cent more, but apparently McDonalds paid a small fee (enough
to be counted in the audit) to Pacific Publications. The reality of
course is that no money changed hands as Pacific’s share of the deal
was joint-marketing costs. However in order for the magazines to be
counted in the audit there had to be an invoice for the magazines –
therefore a swapping of invoices. The thing is: advertisers don’t
actually just pay for a circulation number, most of them care about the
profile of that number. Would they be happy to know that 30,000 copies
are being offloaded at McDonald’s? You will find that that sort of
thing happens in almost every publishing house – including the
newspapers.

And from someone who knows a lot about chain stores:

Distributors also rort system by targetting chain stores eg Coles,
Woolworths or newsagents that are traditionally poor in doing their
returns. If a store does not do their returns after 2 months then they
pay for the lot and the Publisher gets the circulation. By
oversupplying these stores with levels representing 80%-90% expected
return rates, the copies are buried in the system and the major chains
end up paying for the rort (when will Fletcher and Corbett realise?).
Industry continues to ‘crap itself’ when it hears chains and newsagents
pushing the ‘payment on scan’ scenario. There are estimates this could
wipe of 5% in major title and up to 20% off the circulation of mid to
low volume titles.

And this, along the same lines:

Strange how during circulation audits, newsagents not only do not
get returns accounted for but actually have the numbers of publications
invoiced to them being in excess of those delivered to them. (Always
explained by: “Aw vandals must have taken them we will send you
replacements.”. Add to this those shopper docket freebies, give aways
etc & the figures really do look good for the audit.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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