Why Trinity needs to get a better grip on its ABCs

Because circulation is at the kernel of ad rates, ABCs, not readership figures, should form the basis of Trinity’s compensation offer, says Mike Mendoza

It’s hard to avoid the conclusion that Birmingham Post & Mail (BP&M) is intent on snatching defeat from the jaws of victory. It started so well with phone calls alerting the relevant people of an impending stock market announcement.

The circulations of the Birmingham Evening Mail, The Sunday Mercury and The Birmingham Post had, according to Trinity Mirror estimates, been significantly overstated for a period of at least the past six years by the previous management. Assurances were given that sensible compensation would be forthcoming and a £20m provision was made. Then it all started to go wrong.

BP&M offered compensation in the form of future rate freezes and an additional extra 10 per cent discount on next year’s bookings. Hardly equitable on titles whose circulations had fallen by about one-sixth.

BP&M wrote to 6,000 advertisers with this solution. Only 80 (of the biggest advertisers) have written back, so BP&M has assumed that 5,920, by default, are happy to accept. Palpable nonsense.

The IPA sounded alarm bells that no retrospective compensation was being discussed and suddenly we were told to expect a response from BP&M’s lawyers.

So what, might you think, is the problem?

The key issue is whether advertising sales are dependent on readership figures or circulation. Our position on behalf of clients is, and always has been, that while we use readership figures to aid our press targeting decisions, the rates we pay to advertise in titles are largely based on circulation. Readership provides profile data based on a sample survey and is, therefore, only a proxy for value. Circulation is (or was supposed to be) the incontrovertible truth. Therefore we require compensation for our clients in line with the overstated circulation. Logical? Apparently not to BP&M.

Despite many awkward agency and media owner negotiations being concluded without third-party intervention, BP&M seems to require the services of a High Court judge and an expert panel to help it decide what to do. We met BP&M to discuss this issue and move towards resolution. But upon hearing the IPA view that a panel would both overcomplicate a simple issue and delay compensation to clients, it wasn’t prepared to discuss any alternatives. The fact that the panel’s views would not be legally binding was apparently irrelevant.

Also irrelevant was the precedent of the MAS TV airtime trading row in 1993, which resulted in the media owner compensating clients through their agencies in the way proposed by the IPA.

Clients have a right to expect the value of the difference between the circulation bought and that received over the past six or more years. This is likely to be a lot of money for a lot of advertisers.

Whether interest on the money, the cost of management time and loss of business is mentioned is up to individual clients.

Mark Mendoza is managing director of Mediapolis and IPA Media Policy Group representative with responsibility for press sales practices

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