The issue of circulation rorting by newspaper and magazine publishers
has just been lifted another notch with the news that one of the
world’s leading publishers, Time Inc, has been hit with a US government
subpoena over its so-called “sponsored sales programs.”

As this story in Advertising Age
reveals, Time describes its sponsored sales programs as “magazine
subscriptions purchased by a sponsor for distribution either to public
places, such as waiting rooms in doctors’ offices, or to a targeted
group of individuals selected based on the subject matter of the
magazines.”

In other words, another circulation rort to deceive advertisers who pay
advertising rates based on the audited paid circulation released by the
publishing industry and legally verified by the publishers themselves.

CRIKEY:
There’s no doubt that the official audited circulations of many leading
newspapers and magazines – in the US and in Australia – are shonky. And
there’s no doubt that the implication contained in the words “audited
paid circulation” is misleading and therefore a breach of the law.

Look at the recent history of this practice in the US, with some of the country’s biggest newspapers like The Chicago Sun Times, The Dallas Morning News and Newsday all caught cooking their circulation figures.

In
Australia, the Audit Bureau of Circulations last week announced its
response to Crikey’s ongoing revelations about how leading newspapers
and magazines fabricate “paid” circulation – see this report in The Australianhere.

The ABC’s response is a total whitewash. It’s about being “seen to do something” in the hope the issue will drift away.

Well,
it won’t drift away, especially when the US Justice Department starts
investigating publishers of the calibre of Time Inc.

Fraud is fraud, and the only way the Australian audit bureau can remove the stench of fraud is to appoint an independent
inspector – with no ties to the media or advertising industries – with
the power to scrutinise every aspect of the audit process inside and
outside media companies.

Stephen Hollings, chairman of the ABC,
has refused to take calls from Crikey on this subject for the past two
months. In other words: blame the messenger to avoid the message.

A message that was well summed up in Neil Shoebridge’s story in today’s Financial Review
under the heading “Print advertisers keep up audit pressure,” which
says: “Newspaper and magazine publishers might have agreed to audit
their sales figures more regularly and make the auditing process more
transparent, but that does not mean advertisers and media buyers have
stopped agitating for change.”

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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