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Federal Investigation Begins on Print Circulation Numbers

Advertising Agencies and National Advertisers have requested a federal study of newspaper and magazine circulation nnumbers as audience reach and brand impact made with print advertising campaigns continues steep decline.

Major Advertisiers and Leading Agencies report that Online Advertising Programs and Search Engine Optimization are Far More Effective than Print and Magazines.

Time Inc. the nation's largest publisher of consumer magazines, has been subpoenaed by federal investigators to provide information about the magazine industry's circulation practices, the company confirmed earlier this week.

The disclosure comes at a time when advertisers and agencies are questioning the validity of audience circulation statements following a series of scandals and mis-statements among major newspapers, and several major magazines.

According to The Wall Street Journal, the probe by a federal prosecutor in New York is investigating the business practices of Inflight Newspapers & Magazines Inc., a third-party magazine distribution agent that is no longer in business, but whose practices have raised questions about how magazines treat magazines distributed for free to airlines and business travelers.

The report said publishers including Time Inc. routinely treats such 'Free Pass Along' distribution as "paid" circulation. This taints the paid circulation numbers that many print companies use to justify steep advertising fees.

Advertisers and their agencies are forced to pay print advertising rates based on audited circulation statements of publications. In recent years the audited numbers have been declining substantially, yet print advertising rates continue to escalate.

Advertisiers and their agencies are now reducing their "up-front" buying practices and shifting portions of their ad budgets into online advertising campaigns that have proven to be much more effective from all perspecitives.

A key component of online advertising is search engine optimization and more companies are beginning to address organic search engine optimization as the foundation of all corporate maketing efforts.

Organic search engine optimization offers 100% targeted reach with no waste as the keyword search phrase has qualified the new website visitors. Organic search engine optimization has lasting impact and benefits versus print that typically presents a 5 day conversion window.

Many senior execiutives are realizing that searching has replaced time spent reading and that most of their target consumers search daily and receive thier current news and information updates online versus interacting with the often dated and stale print publications. Aslo today's time-pressed target consumers lack the 'free time' that print publications require.

The federal courts now will investigate the audited circulation practices of the print industry in an effort to establish more accurate circulation numbers.

The next investigation is sure to lie with the broadcast industry as the inaccurate arbitron and neilsen radio and televsion ratings systems used to dictate quarterly television and radio advertising rate increases are sure to be called into question.

Related Media Buying Note:

The next time your media reps lay the ratings or audit circulation numbers in front of you demanding a market/ratings based Cost Per Point increase, ask for validation of the numbers, and in many cases your cost per point will decrease rapidly.