Trade Mag Lunch Meeting Chews Over Audits and Postal Problems

NTCFI panel details reporting updates and a dire postal outlook.

By Bill Mickey
Monday, April 13, 2009

NEW YORK—At a luncheon last week presented by the National Trade Circulation Foundation (NTCFI), representatives from ABC and BPA outlined new initiatives designed to streamline the audit process and addressed a continued push toward a "total media" audit outlook, while postal consultant Ed Mayhew detailed a grim year ahead for the USPS.

ABC's Creighton Phillips reviewed initiatives introduced last fall, particularly the frozen audit pricing. Phillips noted the last three years have locked in hourly costs, but last year overall audit costs were frozen at 2008 prices. This will continue on a year-to-year basis, he said, and depending on business conditions could continue into 2010.

Currently, Phillips said ABC is examining, among other things, whether or not to keep the Paragraph 3c mailing address analysis.

BPA's David Terlik outlined several changes taking effect with the June 2009 statements:

• Electronic site licenses will now show the number of people viewing the electronic copy. Electronic site licenses used to be counted as one copy—BPA is now allowing the number of viewers to be reported, but not in total qualified circ.

• Paragraph 3c will remain. "The media buyers wanted it," said Terlik.

• Paragraph 3b has been condensed into one line item rather than 3. Member benefits are now one line item as well. "We'll keep track on our back-end, but not on the statement," said Terlik.

• Two paragraphs have been eliminated in the paid circ section: How the subscription was ordered and the length of the subscription. Terlik said the board felt the information could be seen in other parts of the statement.

Terlik also brought up the current debate on reporting non-requested electronic editions as qualified circ. While currently under review by BPA committees, Terlik said the pros and cons among the publishing community are "pretty much split down the middle."

Grim News from USPS

Postal consultant and 37-year USPS veteran Ed Mayhew closed out the panel discussion with a review of the postal landscape, and it's not looking good.

The USPS this year, said Mayhew, is facing heavy revenue losses, a significant downturn in mail volume, facilities consolidation and a reduction in workforce—including the departure of many top-level executives, resulting in "cubicle wars with unqualified people making decisions."

The USPS lost $715 million in January this year alone and will likely run out of money by the end of the year, Mayhew said.

Flats volume was down 16.5 percent in 2008, with overall volume down 12 percent so far this year.

A declining CPI is hampering further price increases and has raised the specter of an "exigent case" where the USPS applies for a "very serious price increase," said Mayhew, who added that we should hope the economy improves enough to absorb seemingly unavoidable, but more incremental, price increases.

Most distressing, however, is the periodicals coverage "crisis," said Mayhew. Complaints have been filed at the Postal Regulatory Commission that push for the periodicals class to share the same rates. Right now, periodicals are at 83 percent. The Commission, said Mayhew, is sympathetic to the complaints, which could spell disaster for some publishers. "If you get a 17 percent hit, some of you in this room will go out of business. [The increase] should be spread out."