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BPA Board Votes for Greater Transparency in Sponsored Subscriptions
Sponsors and audiences to be defined and qualified; total sponsored paid reported on front page; agents as sponsors and monetary remuneration to sponsors prohibited; sponsored not calculated in average price; sponsored public place and other sub-categories broken out. Review process continues.
At its May meeting, BPA Worldwide’s board of directors voted to change sponsored subscription reporting and auditing rules in several key respects, and to continue the committee and advisory board review process in regard to this circulation category.
Under industry-leading BPA consumer magazine rules in force since 2000, all subscriptions sponsored by a third party are already broken out on the BPA consumer magazine circulationreport from “copy one.” In addition, on a mandatory basis, every copy is declared and audited as being either individually addressed or as one of multiple copies sent to the same addressee—a standard that remains unparalleled.
Seeking to ensure that BPA continues to demonstrate leadership in transparency, the board has now voted to require additional disclosures.
First, in line with a proposal coming out of the board’s last meeting in December 2004, both the nature of sponsors and the audiences reached will be defined in documentable terms in Paragraph 4 (“Qualified Circulation Break-Out for the Analyzed Issue”) and audited.
“Media buyers are more focused than ever on assessing the quality of a given magazine’s audience, in terms of appropriateness for the advertiser and engagement with the editorial and advertising content,” said BPA Worldwide President and CEO Glenn Hansen. “In the case of sponsored circulation sources—where a third party, rather than the reader, is paying for the subscription—gaining greater insight into the nature and quality of the audience is the core issue. By adding independently audited definitions of the audience and the sponsor, BPA is addressing that need.”
Publishers who have third-party sponsored copies that have been requested by the recipients of those copies may, additionally, choose to declare the requested nature of those copies for auditing.
Other sponsored rules changes include:
- A new sponsored reporting break-out on the front page of the circulation report. Under the “Qualified Paid” area within the summary of total average qualified circulation, a third break-out, “Sponsored,” will be added to the existing “Subscriptions” and “Single-Copy Sales” break-outs. In other words, average total paid sponsored copies for the reporting period (both subscription and single copy) will be shown as a separate line on the front page, along with the existing line break-outs for other (non-sponsored) paid subscription and single-copy average totals for the period.
- Each sponsored transaction must be of a non-recourse nature, meaning that there can be no monetary remuneration to the purchaser (sponsor) for the subscription or single-copy sponsored transaction.
- Subscription agents will be excluded from being sponsors.
- In Paragraphs 1 and 4, there will also be a new category breaking out all “public place” sponsored subscriptions—those distributed to waiting rooms and other public venues—as well as a new break-out for sponsored single copies.
- Since sponsored copies are not paid for by the end user, sponsored copies will no longer be included in the calculation of average subscription price. However, they will continue to be reported by price and term in the analysis of sales for the period.
To enable publishers and their fulfillment suppliers time to prepare their systems for these rule changes, the scheduled implementation date is January 1, 2006 (to appear in June 2006 circulation statements and audit reports).
Given the complexity and evolving nature of circulation source make-up, and its importance tomedia owners and buyers, BPA’s board also voted to continue the review process for sponsored subscription reporting and evaluate the further input garnered at its next meeting, in December.One aspect of continued review will be whether all sponsored copies should be reported as a third category, separate from qualified paid and qualified non-paid, which was part of BPA’s original sponsored proposal.
“As a result of meetings over the past six months, the advertiser, agency and publisher representatives on our worldwide committees, advisory boards and board of directors have addressed key issues regarding sponsored subscription reporting disclosure,” said BPA President and CEO Glenn Hansen. “Their adoption of new rules that provide verification of the sponsor and the specific type of audience reached; the additional break-outs of public place, sponsored single copies and other sponsored subcategories; and the refined definitions of who may be a sponsor and what will constitute a paid sponsored subscription will further enhance BPA’s unparalleled disclosure in this area.
“At the same time, it is important to note that the continued review process and the evolving nature of publishers’ use of this source could well lead to new perspectives on sponsored over the next six months,” Hansen added. “BPA took a leadership position by proposing that sponsored circulation should be reported in its own category, separate from non-paid and paid qualified circulation. This has created healthy debate in the industry, which BPA will continue. In addition, other aspects of sponsored may require more discussion.” For example, if a paid definition of sponsored prevails after the extended review process, the topic of recourse to an agent or broker as part of a sponsored transaction will need to be addressed, Hansen said.
To access the full language of the consumer magazine sponsored rule amendements, click here.
To access a copy of the new consumer magazine statement format reflecting the sponsored rules amendments, click here.
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