75% advertising rule is snagging publishers as ROP declines, advertising inserts increase

April 11, 2014

Threatened with

permit revocation

 

T

here’s been an uptick in recent years of newspapers found in violation of the 75 percent advertising rule, which prohibits Periodicals from running more than 75 percent advertising percentage in more than half the issues in a 12-month period. 

The exact wording of the rule is in DMM 707.6.1.3: “General publications primarily designed for advertising purposes do not qualify for Periodicals mailing privileges, including publications that: a. Contain more than 75 percent advertising in more than half of the issues published during any 12-month period.”

National Newspaper Association members and others who join to get our assistance have been jarred by letters from the Pricing and Classification Service Center in NYC threatening loss of Periodicals mailing privileges for this violation.

“The loss of Periodicals privileges would mean immediate rate increases for newspapers that would then have to be mailed at Standard rates. It could also mean a day or more of delay in service, as Standard mail is supposed to be a deferrable service when mail volume is high. For many newspapers, it also could lead to the loss of public notice advertising, because many state statutes require a Periodicals permit for official newspaper eligibility. So the consequences of losing a permit can be severe, even life-threatening,” said NNA Chief Executive Officer Tonda Rush.

I asked Chuck Tricamo, veteran Periodicals specialist now managing the PCSC, if the wording and tone of the letter had been made more severe recently. It has not, he said, but it is the same as ever.

 

WILL I LOSE MY PERIODICALS PERMIT?

Not if you take immediate and sustained action to get the advertising percentage at 75 percent or below in at least half the issues. Remember, you can be at 75 percent; you just can’t be more than 75 percent. 

Despite the strong language of the threat letter, PCSC staffers over the years have repeatedly assured me that they don’t want to take a Periodicals permit away from anyone if they can avoid it. They are just charged with enforcing the rules that come to their attention.

But first you must immediately write a letter or e-mail (if you can discern who to send it to from the letter) to the PCSC within 15 days of receipt, as specified in the permit “revocation” letter, stating that you wish to appeal the decision and plan to take steps to get your issues into compliance. They will then send you an agreement to that effect, which you should sign, date, and return ASAP.

The key is to keep the paid advertising percentage, insofar as possible, below 75 percent for enough straight weeks to get the 12-month moving average below half of the total issues during the time period. Then maybe add a few more issues for good measure.

Once you’ve come back into compliance on that 12-months worth of issues, rule, then you can resume smart management of the 75 percent rule. Simply, there will be some issues so heavy on preprinted advertising inserts (whose linage is counted as 100 percent advertising), say in November and December that have no chance of staying under 75 percent. That means that in lighter months, like a February or a July, rather than cutting back pages on a low-revenue issue, it might be better to fill those pages with editorial to get the numbers up.

Then there are plenty of issues that just barely exceed 75 percent. Those provide a low-cost chance to add non-paid or editorial matter without expanding your paper by more than two pages. Those are the ideal target issues for you to keep in compliance.

 

WHY ARE MORE PAPERS
BEING CAUGHT?

There are, of course, multiple reasons, including one competitor reporting another. I’ll give two more.

1. The trend toward preprinted advertising supplements, or inserts, often accompanied by declining ROP in many advertising categories. Advertisers shift from ROP to preprints to better control color, print quality, cost, etc. Newspapers must track their own compliance to avoid getting caught in violation. Despite NNA efforts, we have been unable to get this rule modified for paid publications like we did for Requester Periodicals (from 100 percent to 75 percent of issues). And because USPS does not average editions of an issue, a weight breakdown of one part of a mailing that exceeds 75 percent counts for that issue. 

Also, it may not be in the best interest of Periodicals, a class that struggles to maintain its identity within USPS, to relax the editorial standards too much. Looking more like Standard mail is a road that could lead to being charged and served like Standard mail. 

2. The PostalOne! business accounting system has built in checks of various functions, and the 75 percent rule is one of those. Reports of an increase in newspapers being caught via PostalOne! at the original entry office are increasing based on member calls and e-mails. It’s not automatic, but postal employees can run an advertising report to see the how many issues are more than 75 percent for any 12-month period looking backwards. And they are likely audited on their diligence in running that report.

 

HOW CAN I FIND EDITORIAL
MATERIAL TO ADD?

There are many ways to increase editorial copy, and most of you know as much about this topic as I do. But because I’ve often been asked, I’ll give this my best shot.

1. As a country editor at heart, and a group executive editor for 21 years, I have a bias for increased local news. Many times, there are community events where photos exist for a page or two of photos, but space limits coverage to perhaps two or three shots. Being more than 75 percent may present opportunities to open up the paper a bit more.

2. Secondly, if you are looking to add editorial matter on an ongoing basis, there may be local columnists you can recruit on subjects like gardening, health, new businesses, recipes or any number of topics that might make your paper more valuable to readers on an ongoing basis while opening up your news hole a bit.

3. Syndicated matter is also another option. I found that crossword puzzles, horoscopes, and word puzzles are particularly appealing to a large segment of readers. I still believe in TV listings because loyal readers that skew older still prefer hardcopy and not electronic listings, same reason they prefer your print newspaper in the first place. The March Pub Aux reported on the value of syndicated material and many good vendors.

As postal consultant for Athlon Media, I know that the company offers a wide variety of free content to those papers that run American Profile, Relish or Spry. It even offers a generic TV listing that can be localized by your staff each week. And I need to add that the magazines are measured on an advertising/editorial basis each issue, so they are not reported as 100 percent advertising like advertising supplements, which you are paid for. © Max Heath 2014

 

Max Heath, NNA postal chair, is a postal consultant for Athlon Media, publisher of Athlon Sports magazine, American Profile, Relish, and Spry newspaper supplements, and Landmark Community Newspapers LLC. Email maxheath@lcni.com.

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