Scientific circulation management for newspapers

Introduction

There are 24,724 newspapers and periodicals in the United States and Canada, and each one of them has a circulation problem. l In this volume, the problems of newspaper circulation alone are considered, for it would be impracticable to cover periodical circulation also in the same volume, though the two have many fundamental principles in common.

The daily, triweekly, semiweekly, and weekly newspapers in the United States and Canada number 20,777. Of this total, the United States has 18,825, divided into 2,502 dailies and 1X323 weekly newspapers. Among the dailies of this country there are approximately three evening papers to each morning paper.

Owing to the rapidity with which circulation management has come to the fore as the supreme problem in newspaper publishing, the time is not distant when as many books on the subject will be available for the student or the beginner in the work as may be had upon the other major branches of newspaper publishing — editorial and advertising. At the present time the only information available is in the trade press and in the bulletins of the International Circulation Managers' Association, issued bimonthly. This work, consequently, is a pioneer effort.

One of the main difficulties in an attempt to reduce circulation management to principles, or to standardized practice, is to establish the natural boundaries of the subject. A narrow conception would say : " The editorial function is to produce a newspaper which the public will buy; the circulation vi INTRODUCTION

function is to see that this product reaches its market." But in actual practice this concept is violated constantly. The circulation manager nowadays invades the editorial rooms with hints and suggestions on policies and features that will attract or hold readers, and often his advice means the difference between success and failure.

The governing idea in this volume is that of the circulation manager as a creative force in the publishing organization. No longer is he thought of as the man in the basement doling out newspapers to newsboys. In the best organizations, the circulation manager has won and will maintain an equality with the managing editor and the advertising manager. There are numerous reasons for this enlarged dignity and responsibility. One has only to observe the aggressive efforts of newspapers to increase their subscription lists, or sales, to realize that circulation management is now a profession in itself, just as much so as journalism or advertising.

In a field where there are several newspapers of practically uniform merit, the circulation manager will be a decisive factor in winning for one of them the foremost position. And certainly he will be the chief factor in maintaining an inferior newspaper upon a going basis. The prime reason, however, for the higher valuation of the circulation manager is found in the new standard of honesty in circulation figures. Formerly, the circulation manager headed the department about which much lying was done. The advertising department frequently misrepresented circulation by claiming a subscription list which did not exist, or if it did, owed its existence to a distribution with many unhealthy aspects.

Today, the two outstanding facts are the willingness of publishers to tell the truth about circulation, and the determination of advertisers to know the truth before placing an order. The consequence is that the circulation manager is in the open on firm ground, and the maintenance of a normal circulation

INTRODUCTION vii

by sound promotion methods becomes a problem of the first order.

For much of this circulation manager's must thank the Federal Government, which enacted the law requiring regular circulation statements, and thereby made circulation a definite commodity, and the manager, or producer of it, himself, a more important personage.

Other agencies, like the organization of the International Circulation Managers' Association, have contributed to increase his prestige, until it has become a common practice with publishers to promote the circulation manager to the position of business manager.

More and more publishers are realizing that a publication must be marketed by the same principles that apply to any other commodity, and that the title " Circulation Manager " could as properly be " Sales Manager."

No dogmatizing over any special methods of management has been indulged in this book, but the endeavor has been to consider all methods with an unbiased judgment and to see wherein they have points of contact as well as of divergence. The author has no brief for or against such methods as premiums, contests, and other promotion plans that usually evoke spirited arguments among circulation managers.

Wherever it has been practicable, newspapers are mentioned specifically to illustrate the subject under discussion, but necessarily only a small number, relatively, can be cited and many efficiently conducted circulation departments are not referred to.

The general plan of this book is to give first a historical perspective, second an analysis of basic principles, and third examples of efficient management and standard promotion methods. The veteran circulation manager may not find much, if anything, that is new in the volume, except the effort to take a connected, perspective view of a subject heretofore treated in viii INTRODUCTION

piecemeal. The general attitude toward the subject of circulation management has been threefold: primarily, to approach the subject from the viewpoint of the circulation manager; but also from the viewpoint of the advertising department and all those engaged in selling circulation in the form of space; and lastly from the viewpoint of the buyers of advertising space.

Consequently, methods of management which do not seem desirable from the viewpoint of the advertisers — the people who foot most of a newspaper's bills — are analyzed critically and constructively. The book, therefore, should prove useful not only to the circulation managers engaged in producing circulation, but to those who sell it, and to those who buy it.

Full acknowledgment is made to The Fourth Estate — the newspaperman's newspaper — for permission to consult its files. The fine spirit of helpfulness of its business manager, J. A. Savadel, is to the author a pleasant recollection.

A blanket acknowledgment is made to other articles, to circulation managers who courteously assisted in supplying facts, and to sources of information which have slipped from the author's memory. Inasmuch as a pioneer book is largely a digest of other men's experiences, the failure to give specific acknowledgment in some cases is certain, though unintentional.

The word " scientific " is greatly abused, but it is the only one which conveys the idea of exact, thoughtful, and systematic methods in circulation management, and so is used in the title of this book. It is hoped that one effect of a book on circulation management will be to spread this conception of the work, and to stimulate the profession along the lines of presentday tendencies, which promise so much that is desirable.

William R. Scott.

New York City, July, 191 5.

Contents

I The History of Circulation Management . 17

The Rise of the Circulation Manager

Conditions Producing Modern Circulations

Chapter I The History Of Circulation Management

The Rise of the Circulation Manager

Just who was the first man to hold the position which is now designated " Manager of Circulation " has not been ascertained by the author. Inquiries of some of the older newspapers failed to establish the identity of this individual. The New York Evening Post, 114 years old, reports that Alex. Thompson was the first man to have the title in its organization, being appointed in 1890, twenty-five years ago.

It is not a point of great importance, but it shows that circulation management as a profession came into being with the one-cent dailies in the late Seventies or early Eighties. Prior to that the newspapers allowed their circulations to grow like weeds, whereas now they are carefully cultivated, and sometimes have a hot-house growth.

The old men in the profession — and circulation management is now a profession — have lived to see a wonderful increase in prestige for the occupants of this position. True, in many organizations, the tendency still is to look upon the circulation manager as a kind of super-office-boy, but it is a decadent tendency.

Competition has given that conception the last sad rites.

Successful publishers cannot afford to have a second-rate man in the position. In the higher stratum of newspapers, the circulation manager is on a par with the other officers, draws a big salary and takes week-ends for golf !

As for salaries, the highest today is said to be paid by The Chicago Tribune — $10,000 a year. The New York Herald is quoted at $7,500, while other New York, Boston, and Philadelphia papers and those published in cities of approximate size pay $5,000 or more. The list of papers which pay similar salaries is a long one. From this high mark the figure dwindles until $10 or $15 a week on dailies in small towns is rock bottom. But the number of circulation managers who now draw $100 a week is so large that young men who formerly thought the best opportunities were in the advertising department are seeking openings in the circulation department.

With prizes of this magnitude, and in view of the new importance of the work, it is not surprising to find a constantly rising standard of ability among circulation managers. With the remuneration paid, and the modern tendency of publishers to recruit business managers from the ranks of circulation managers — instead of advertising managers — it is evident that within a few years the circulation manager will far exceed even his present dignity and importance. The reason for the direct line of promotion from circulation manager to advertising or business manager will appear in subsequent chapters.

Conditions Producing Modern Circulations

When the post-office department in 1885 granted a rate of one cent a pound on newspapers, far-sighted managers then could see much of the development that has taken place. The new rate enabled the newspapers to go after mail circulation, and to deliver suburban circulation at a low cost. Then, as the transportation facilities increased and the population grew, the big circulations appeared.

HISTORY OF CIRCULATION MANAGEMENT 19

The merchandising influence upon the growth of circulation is one of the most significant. Alert merchants and manufacturers began to see the advertising value of the newspapers, and as they increased their investments in space, the importance of subscribers increased. It was perfectly plain that the more subscribers there were, the more advertising and the more revenue would accrue. This put a premium on circulation, and stimulated the newspapers to great exertions to swell their subscription lists. Then the modern department store came along, using whole pages of space. In any analysis of circulation growth, the department store must be accorded large importance.

The most spectacular figure in the new fight for big circulations was William Randolph Hearst. His effect upon circulation methods has been no less marked than upon editorial methods. The influence of his editorial and news policy preceded his break with old circulation methods, but the innovations in both departments were closely related and to a large extent interdependent. The extravagant lengths to which he went to attract readers had a lasting effect in circulation circles and is chiefly responsible for the high publishing cost of modern newspapers. Such personalities as Joseph Pulitzer and James Gordon Bennett were scarcely less important in their influence upon circulation growth.

The International Circulation Managers' Association

These and other forces gave the circulation manager a new sense of identity, but it was in 1898 before the various abortive attempts to form an organization of circulation managers reached a successful issue. On November 23, 1898, the aggressive spirits met in Detroit, Michigan, and organized " The National Association of Newspaper Circulation Managers " with about thirty-five charter members. W. H. Gillespie and J. L. Boeshans were the prime movers in the Association.

By 1910 it appeared desirable to take in Canadian and other foreign managers, and the name was then changed to " The International Circulation Managers' Association." The annual meeting is in June and the present membership is nearly 400.

In 1907 the Association began issuing an official bulletin, the first number of which appeared in August with D. B. G. Rose as editor. It is a bimonthly and contains practical articles on circulation management contributed by the members. This bulletin has been helpful to the members, affording the only printed instruction, or exchange of ideas, available. The Fourth Estate — the newspaperman's newspaper — has recognized the growing importance of circulation management by printing an article on the subject every week, and other trade papers now treat the subject regularly.

Texas was the first, and is so far the only, state to have a state association of circulation managers. The periodical circulation managers have never organized, but it seems certain that they will before long, for their work is of great importance. Magazine competition is as bitter as any competition in American industry.

A noteworthy feature of the first annual convention of the National Association was the action of Frank P. Glass, of The Montgomery Advertiser, in asking the delegates to advise him on the selection of a circulation manager for his paper. Prior to that, he said he had allowed the circulation work to stumble along in any hands, under his supervision ; but he had decided that the position was too important for further haphazard management. This illustrates strikingly the change that has come over publishers in their conception of circulation management.

The annual conventions are notable for their practical and enlightening addresses, and for this reason many broad-visioned publishers encourage their circulation managers to attend them,

HISTORY OF CIRCULATION MANAGEMENT 21

and pay the expenses of these managers when they go. Membership is a recommendation to publishers for any applicant for circulation work. The young man ambitious to advance, by all means should join, and should look upon a convention missed as a distinct loss in his struggle for efficiency.

As evidence of the higher development of circulation work, it may be noted that there is now at least one advertised " Consulting Circulation Manager," sustaining the same relation to the newspapers that an expert public accountant does to business accounting.

Honesty in Circulation Figures

There is a new idealism in publishing and it is fully evident in the circulation department. This new idealism is a demonstrable knowledge that honesty is the best policy. James Keeley, publisher of The Chicago Herald, in an address in Boston made a plea for American-made products which would command a reputation abroad for quality, and for American business practices which would reflect fairness and sincerity. The newspaper and periodical press is in the van of this movement toward a higher plane of business integrity.

Indicative of this, and by far the most interesting and hopeful sign of the times for the circulation manager, is the new standard of honesty in circulation figures. The latest and most perfect expression of this is the Audit Bureau of Circulations, but it was preceded by numerous missionary efforts to establish circulation on a scientific and honest basis.

Advertisers for a time were willing to buy circulation " sight unseen " • that is to say, they accepted the publisher's statement without question. But the more that advertisers invested in space, the more insistent became the demand for knowledge of what was being bought in the way of circulation. The advertising agencies attempted to obtain this information, and here and there publishers themselves volunteered it.

The American Newspaper Publishers' Association made notable efforts to eliminate dishonesty in circulation figures ; the Association of American Advertisers was formed principally of buyers of space to get at the truth ; the trade papers hammered at the ideal, and many other organizations and agencies flourished and waned.

One of the best of the efforts made by publishers themselves to elevate circulation to the basis of a definite commodity was the formation of what is termed " The Gilt Edge Newspapers," sponsored by The New York Evening Globe. This group of about 200 newspapers is not incorporated, and its motto is to " Sell Advertising as a Commodity." A more accurate expression would have been to " Sell Circulation as a Commodity," for the avowed purpose of the Association is to furnish full and truthful circulation facts. Its quarterly reports give the net paid and gross circulations, show how this is distributed between the city and country, and quote the maximum and minimum advertising rates. This group of papers will be considered in some detail in another chapter.

The Audit Bureau of Circulations

At present, the comparatively new Audit Bureau of Circulations is the last word in the movement to sell circulation as, a commodity. Its headquarters are in Chicago. The object of this Bureau, serving both the newspaper and periodical press and the advertisers, is to furnish accurate information in detail about circulations, such information to be obtained by voluntary reports from the member-publishers, 1 and then verified by the Bureau's own expert circulation accountants. These experts, recruited from the ranks of successful circulation managers, enter a newspaper office and go over the books and dig up the facts in a most thorough and informative manner.

HISTORY OF CIRCULATION MANAGEMENT 23

The Bureau's semiannual report shows the population of the city (corporate limits) and also of the trading territory outside the city. Within the city the distribution is shown by carriers, newsdealers, street sales, and counter sales. The suburban distribution is shown by carriers, agents, newsdealers, and by mail. The country distribution is shown by newsdealers, and by mail. The foregoing is strictly net paid circulation. Reports must be made on the unpaid distribution — the exchanges, complimentary and sample copies, and the copies going to employees, correspondents and service, advertisers and advertising agents, and those copies used for the office and files.

An analysis of circulation methods also is required, to show all subscription prices by mail or carrier, all special and trial rates, the price of single copies, what returns are allowed, whether premiums are given, whether canvassers are employed on salary or commission, whether subscriptions are obtained in clubs, whether the paper combines with other publications, what percentage of the circulation is sold in bulk to others than newsdealers, whether contests are used, or coupons or voting competitions, the value of premiums and prizes, the sources of any other subscriptions, the condition of subscription collections, what character of advertising is excluded, and what telegraphic or other news service is used.

These questions will show the exhaustive nature of the investigation, and the fact that up to June, 191 5, nearly 1,000 publishers and advertisers had become members of the Audit Bureau of Circulations is significant of the trend of circulation ideals. The Bureau is maintained by a graduated scale of dues, based upon circulation for newspapers and periodicals, and upon population for advertisers.

The only criticism of the Bureau that the circulation manager registers, is the provision that circulation reports must be sworn to by the publisher or business manager. This seems to infer that the circulation manager is not sufficiently important, or reliable, for his sworn signature to be accepted. 1

Lying about circulation has not been a habit of circulation managers, who do not come in contact with the buyers of space. The advertising men are the guilty persons, and the Audit Bureau should be in accord with the modern estimate of circulation management by accepting the affidavit of the circulation manager. Bank reports are made by the cashiers, the men immediately in charge of practical operations, and circulation reports should be made by the manager immediately in charge.

While such minor criticisms of the Bureau may be made, it is a safe prophecy to say that the organization will be permanent, for already it has done such effective work that other organizations having the same object have retired from the field in its favor. Its general influence is to make circulation management one of the really big tasks that any man can undertake. The wise circulation manager will work to have his publication as a member.

Recent Tendencies in Circulation Management

In its 191 5 convention, the American Newspaper Publishers' Association considered the question of insuring truthful statements about circulation in the semiannual reports to the Government, and advocated an amendment to the law which would prevent false statements. The result may be that eventually the Government will require thorough and accurate reports under penalties, and in this event, private organizations like the Audit Bureau would be superseded, for, naturally, a really efficient Government bureau would be the standard. But unless the Government reached the Audit Bureau's high standards, a private organization always will be in demand.

Still another evidence that the trend in circulation work is

1 Since the foregoing criticism was written the Bureau has amended its rules 50 as to require the circulation manager's signature to reports,

HISTORY OF CIRCULATION MANAGEMENT 25

upward is the organization of the International Circulation Builders' Association, with members among the contest companies and other circulation promotion concerns. " Honesty First " is the slogan, and the object is to eliminate fraud in constructive circulation campaigns of whatever character.

The grouping of several newspapers under one ownership, like the nine dailies in the Hearst group, seven in the Shafer group, the Munsey group, and so on, is tending to raise the standard of ability in the profession, of circulation management, for while each paper in a group has an individual circulation manager, there is a headquarters' circulation manager who must think in terms of several newspapers instead of one, and this broadening experience evolves the super-circulation-manager.

The Detroit News has created a new position with the title of " Promotion Manager," above the Circulation Manager.

It is noticeable that the magazines are reaching into the ranks of newspaper circulation managers for experienced men. In the magazine field also, the grouping of periodicals under one control is developing high standards of ability among circulation managers. The Hearst group, the Curtis group, the Butterick group, the American Lithographic Company group, the McClure group, the McBride-Nast group, to mention only half a dozen, require circulation managers who can direct three or more periodicals simultaneously.

Veteran circulation managers will think of many facts and events in the history of circulation management which have not been mentioned in this sketch, such as the marvelous development of the printing press with an output of hundreds of thousands of copies an hour, and all the mechanical inventions and perfected paper-making processes which make possible the modern newspaper. But the purpose here is to indicate only the larger forces and main currents in the circulation stream, A volume could be written on this phase alone.

Chapter II Circulation As A Commodity

Advertising Not a Commodity

Anyone who studies newspaper organization is impressed with the commanding position that the advertising department has assumed. The word " assumed " is used purposely, for by strict -logic the advertising department is not entitled to the preeminence it enjoys.

Because a newspaper's revenue is derived largely from the sale of space, the mistake has been made of overestimating the relation of this department to the whole enterprise. The gradually increasing importance of the circulation department, as shown on preceding pages, is proof that this misconception is being corrected. The view to be taken in this discussion is that the advertising department in reality is an appendage of the circulation department.

It was pointed out that the group of papers styled " The Gilt Edge Newspapers " (because they tell the truth about circulation) was formed to " sell advertising as a commodity." Now, advertising is not a commodity. A newspaper has only two products to sell, one being news and the other being circulation.

What the Advertiser Buys

The customers of the first product of the newspaper, news, are the public, or subscribers. The customers of the second product, circulation, are the advertisers. It would be just as illogical to say that the white paper is what the subscribers

CIRCULATION AS A COMMODITY 27

buy, as to say that space is what the advertisers buy. The paper is merely the medium of conveying the news-product to the subscriber, just as space is the medium of selling circulation to the advertiser.

This is revolutionary doctrine and will cause the advertising men to smile superciliously when they remember the revenue produced through their department. But the position can be supported with irrefutable arguments.

A railroad offers a good comparative illustration. Does a traveler buy a ticket from New York to Chicago, or does he buy transportation between these two points? On the face of things he buys a ticket. But the ticket is only a token. The ticket is evidence that he has bought transportation. This is a perfectly plain case.

Now, does an advertiser buy space, or does he buy circulation? On the face of things he buys space. But the space is only a token. It is evidence that he has bought circulation. The rate he pays is not based, fundamentally, upon the space he uses, but upon the circulation back of that space.

To continue the illustration, the traveler may buy a Pullman berth with his .first-class ticket. This merely indicates the manner in which he will be transported to his destination. It determines his privileges while he is being transported. So, an advertiser who buys large or small space is merely buying certain privileges in connection with circulation. He determines by the amount of space he uses the kind of use he shall make of circulation. The space he buys is the style he adopts in using the circulation, just as the Pullman ticket is the style the traveler adopts in riding upon a railroad.

If a newspaper is successful in making advertisers think favorably of its circulation, it will sell them the privilege of using this circulation at a large profit. The business of the advertising department is so to impress advertisers with the paper's circulation as to induce them to make use of it. In this capacity the members of the advertising department are simply salesmen of circulation, with a head salesman entitled " Advertising Manager."

Circulation and Advertising, Coequal Departments

All this being true, it is an optical illusion to assign the advertising department a higher place in newspaper or periodical organization than the circulation department. The tendency for the last ten years has been unmistakably to realign these departments, and at least to make them equal. In a strictly logical analysis, the advertising department is tributary to the circulation department. Unless the sale of news is made first to the subscriber, there would be no circulation to sell to the advertiser.

The space the advertiser uses becomes vitalized only when the persons who constitute the circulation direct their attention to it. A newspaper, therefore, is an intermediary for the public and the advertiser. It assembles the individuals constituting the public in such a way that the advertiser can reach them by one announcement. Hence, what the advertiser buys is the privilege of talking shop to the people assembled by the newspaper. The fact that he uses space instead of a megaphone is incidental. If a newspaper's subscribers could be gathered into one mammoth auditorium, and advertisers were sold the privilege of addressing them, no one would say that the newspaper sold space on the platform.

As this distinction becomes clearer in the minds of publishers, the circulation manager will take higher rank. In truth, the very much higher rank he has taken in the last ten years is proof that this distinction has dawned in the minds of publishers. And the advertisers themselves have developed the same conception. What other interpretation can be placed on such agencies as the Audit Bureau of Circulations than that advertisers now see clearly that they are buying circula-

CIRCULATION AS A COMMODITY 29

Hon, and wish to know precisely what kind of circulation they are paying for?

The manager of circulation is the pivotal figure in the sales organization of a newspaper or periodical. The editorial department is the manufacturing end. With the product this department turns out, the circulation manager builds up a patronage composed of subscribers and known as circulation. He has then produced a by-product known as advertising, which is simply the granting, on definite compensation, to merchants and manufacturers, of the privilege of using the newspaper's list of customers for the purpose of getting business for themselves.

It is safe to assert that the advertising department of newspapers and periodicals has reached and passed its zenith. The abnormal importance attached to the advertising department, working out into much higher salaries for the head of this department than for the head of the circulation department, is abating rapidly. The fact that the largest revenue comes through the sale of circulation in the form of advertising, rather than through the sale of news, will no longer cloud the issue. The upward movement of the circulation department may not continue so far that it will be superior to the advertising department, but it certainly will not halt until the two departments are absolutely equal, and until the circulation manager is paid as much and ranks as high in the organization as the advertising manager.

Chapter III General Factors Affecting Circulation

Factors Not Controlled by Circulation Manager

There are several factors affecting circulation which are outside the control of the circulation manager because the publisher determines them himself. A few of these general factors will be considered here, among them being:

1. Editorial policy

2. Advertising policy

3. Selling price

4. Typographical dress

5. Color and quality of paper

1. Editorial Policy

By editorial policy is meant not only the political bias of the paper, but the broad treatment of news, whether sensational, moderate, or conservative; the scope of the paper's appeal, whether to the masses or a class ; and similar policies which go to make up a paper's individuality.

The circulation manager's problem is simplified or complicated according as the publisher elects to follow the main current of local prejudices, or to go contrary to them. If he is circulating a paper of Democratic persuasion in a strongly Republican community, the demands upon his ingenuity and ability are far greater than if his paper drifts with the current.