Thursday, April 23, 2009

To Audit or Not to Audit...Is That the Question?

An audit of circulation is a well established part of an integrated advertising sales program for many publishers. But, is it really necessary? First, let’s look at what an audit really is. An audit of circulation is nothing more than third party verification that what you are saying about your circulation is true (within a statistical standard deviation). The audit process confirms your circulation figures by looking at the source documents your used in order to create and update your subscribe list. Approximately half of all business-to-business publications audit their circulation (which means that about half don’t).

If your organization does not currently do this, there are some measures you can apply to determine if you should. First, how many ad pages are you not selling (and to whom) because you don’t have an audited circulation? Most major advertising agencies are more comfortable recommending audited publications to their clients and if your publication isn’t audited, it might not make the list of recommended magazines. Next, look at the magazines against which you directly and indirectly compete. Are they audited? If most are, then it probably means that the “culture” of your market expects the audit report. If some are and others aren’t, then you may not need this tool. Finally, do you have a way of documenting your circulation breakdown without the need for an audit report? Many non-audited publications create a Publisher’s Report which is a breakdown of the circulation by the readers’ job title, and other demographic information similar to what is reported on an audit statement. If there is not overwhelming demand for a true audit statement, this may be no more than you need.

Associations are in a unique position because the circulation of their magazines is comprised of members. Those members choose to join the association and receive the publication because they are in the industry or profession and have a direct need for the information made available to them through the pages of the organization’s magazine. In other words, association members are self-qualified by the mere fact that they have joined the organization that represents their professional interests.

An audit is a long-term and costly commitment, not only for the direct costs of the service, but also for the costs associated with creating, maintaining, and managing the circulation database and source documents required by the audit process. But, if the advertising revenue potential is greater than the costs, and your market is expecting/demanding this tool, then you should place serious consideration into having an audit of circulation. If, on the other hand, you are maintaining your revenue and market share without an audit, then you may not need to make that investment. If you are considering the pros and cons of an audit, a thorough evaluation of all the factors should be made before signing on for or cancelling the service.

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