Counting sales is as easy as ABC

With his decision to announce monthly sales figures for Cosmopolitan and Esquire, NatMags MD Duncan Edwards has turned the world of magazine circulations on its head
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One of the oldest tricks in the magazine publisher's book is to give away a free CD, T-shirt or pair of sunglasses in the final month of the audited six-month circulation period. On the back of these free gifts, the publisher predicts a generous uplift in sales, boosting its headline circulation figure for that half-year.

One of the oldest tricks in the magazine publisher's book is to give away a free CD, T-shirt or pair of sunglasses in the final month of the audited six-month circulation period. On the back of these free gifts, the publisher predicts a generous uplift in sales, boosting its headline circulation figure for that half-year.

At the National Magazine Company, the publisher of Cosmopolitan, Good Housekeeping and Esquire, this practice, if the company ever employed it, is no longer possible. NatMags, as it is known, has broken away from the rest of the industry and retrospectively published a month-by-month breakdown of its magazine sales figures going back to January 2003.

It is a change that media buyers, who purchase advertising space on behalf of clients, have long been pressing for. Their argument is that they could end up buying space in a magazine for a month when actual sales are considerably lower than the official circulation figure.

But the magazine industry trade body, the Periodical Publishers Association (PPA), has said that it will continue to publish only the six-monthly figures, arguing that to single out monthly magazines for greater scrutiny, when weeklies and newspapers are still able to hide behind averages, is unfair.

Duncan Edwards, the managing director of NatMags, is convinced that his company is right to pay heed to the wishes of advertisers. "For years, advertisers and their agencies have been asking the magazine publishers to give them more information about the sales performance of the magazines in which they buy advertising," he says. "Collectively, the magazine industry has not been willing to do that. Individually, we as a company have been much more sympathetic to the advertisers' point of view.

"While we are full members and supporters of the PPA as an industry body, we felt that in this instance we had to do what was right. Rather reluctantly, we decided to do this outside the collegiate approach that normally characterises the magazine industry."

Edwards rejects the suggestion that NatMags decided to publish its figures retrospectively because many of the company's titles are in good nick at the moment. "Our magazines are in good shape, but if we continue to publish this data as a result of this test, then clearly we will do it for the long term. It would be a rather short-sighted thing to do if it was trying to take advantage of a momentary rise in circulation," he says.

Shortly after the next set of six- monthly circulation figures is published in February, NatMags will publish another issue-by-issue breakdown. The company will then make a decision by next summer as to whether to continue with the practice.

While media buyers welcome the move, they point out that NatMags has released publisher's statements for each month, rather than figures independently audited by the Audit Bureau of Circulations.

Steve Goodman, head of press at the media buyer MediaCom, says: "Unfortunately, it's not ABC audited, it's a publisher's statement. In an ideal world, we would like to see data released through ABC, but that's not to say that it's not an excellent thing. It can only be a good thing for the industry, particularly as other publishers begin to see media buyers and their clients are not using it in a negative way."

One of the fears expressed by the PPA is that once advertisers have access to month-by-month figures, they will enter into a non-stop round of renegotiating rates. Ian Locks, the chief executive of the PPA, says: "What has happened elsewhere, when the frequency has been increased to monthly - such as in Germany and America - is that it makes the medium even more expensive because you get into a monthly grapple over price. For one medium alone to do this, we regard as discriminatory and unfair."

Edwards is convinced that this will not turn out to be the case. "At the moment, much of the advertising business is conducted on annual contracts. Within a year, there are already two announcements about the circulation, but if your circulation goes up or down midway through a contract, then it has no impact on prices. So why would it have an impact if we told our advertisers what we actually sold?"

Goodman admits that media buyers might want to haggle over rates for individual months, but argues that over the whole six-month period, publishers will not lose out financially because they will be able to charge more for advertising in months that sell well.

"The problem is to date that the monthly magazines only release data every six months. That can hide a multitude of sins. In any one month, we may be getting 20 per cent less in terms of circulation than we're actually paying for," says Goodman, who has received assurances from ABC that it would not cost extra to publish monthly figures retrospectively. He is urging ABC to include a voluntary section on its circulation certificates for magazine publishers to include an issue-by-issue breakdown if they choose.

But the other magazine giants are still reluctant to follow suit. Nicholas Coleridge, managing director of the Vogue publisher Condé Nast and chairman of the PPA, argues: "Magazines already report more information based on fewer numbers of issues than newspapers. Submitting ourselves to issue-by-issue ABC auditing would pile on audit and administration costs."

Emap, publisher of FHM, Q and New Woman, has issued a statement saying that it is "happy with the current level of transparency". Sylvia Auton, the chief executive of IPC, publisher of Marie Claire and Loaded, is critical of NatMags' decision: "Meaningful media currencies underpin the entire advertising supply chain... And where changes are necessary, they should be discussed and agreed by all stakeholders, and not introduced in an abrupt and destabilising fashion."

Edwards points out that NatMags is not the first to act unilaterally where circulation figures are concerned. "A year ago, Emap made a big song and dance about a unilateral decision not to publish the bulk figures, and went into print quite aggressively trying to persuade others to follow suit," he says. He is "surprised" by the reaction of his peers, particularly publishers such as IPC and Condé Nast, whose parent companies are in the US, where issue-by-issue figures are the norm.

Other publishers will be "watching the NatMags experiment with interest," admits Locks. Goodman is hopeful that the rest of the industry will be persuaded to be equally transparent, and would like to see such openness extended to newspapers, which currently publish monthly circulation figures, but give no daily breakdown. "We're pushing for newspapers to publish more frequent data. What I'd like to see, if they won't give us daily data, is the averages for each day. I'd like to know for February what Monday got compared with Tuesday," he says.

Despite the counter-arguments, Edwards believes that magazines can only benefit from providing more information to advertisers. "If any customer has the impression, however wrong, that their suppliers are trying to hide something, then that's not good. And many of ours do have that impression, rightly or wrongly."