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Forbes: Circulation Woes, But At Least They're Not Alone

Posted by: Jon Fine on December 27, 2005

A report from Audit Bureau of Circulations, released just as the media world went into its annual Christmastime hibernation, found that Forbes incorrectly classified some circulation as paid and missed delivering the circulation it guarantees advertisers.

The Audit Bureau audit, which was released on Dec. 22, found that just over 30,000 of Forbes’ subscriptions could not be counted as paid circulation. That left Forbes’ 2004 paid circulation at 894,886, or about 0.6% below its 900,000 rate base—the circulation a magazine promises to deliver. A revised audit for Forbes’ 2003 circulation, also released on Dec. 22, showed an even greater shortfall: Over 60,000 were subscriptions disallowed and the magazine’s circulation fell 6.7% short of rate base.

This news comes after years of back-and-forth between magazines and advertisers over subscription sources. (It’s long been an open secret in the industry that shadowy agents could deliver massive volumes of subscribers, but the quality of those readers—do they want or did they even ask for that magazine?—was dubious.) These debates, coupled with some high-profile circulation scandals (more on them later) led the Audit Bureau to announce last summer it would no longer count subscriptions from certain agents as paid circulation.

Since then, a growing list of major consumer magazines have been hit with revelations of circulation shortfalls. Among them—full disclosure—is BusinessWeek, which the Audit Bureau found missed rate base by 4.5% in the 12 months ending June 30, 2004.

Besides Forbes, in this month alone Audit Bureau audits discovered Men’s Journal and Working Mother also missed delivering their rate base. Also this month, worse-than-expected circulation deficits were revealed at six magazines formerly owned by Gruner + Jahr USA Publishing—Inc., Fast Company, Family Circle, Child, Parents, and the now-defunct YM. (G+J had a long run of circulation shenanigans.) Meredith Corp.—which bought Family Circle, Child and Parents—sought to defuse advertiser concerns over this by pre-emptively announcing such audits would surface at investor meetings earlier this month.

Earlier this year, audits found that Martha Stewart Living and Hearst Magazines’ House Beautiful also missed rate base.

And Time Inc., the largest and likely most-respected US magazine publisher, was subpoenaed by the US Attorney’s office in New York it its broad probe of circulation practices.

And, bizarrely, two executives from Bedford Communications’ Laptop Magazine were caught allegedly conspiring to illegally boost circulation—in a sting set up by the feds.

(Think this is the last story like this you’ll read? Me neither.)

A Forbes spokeswoman did not immediately respond to messages.

The Audit Bureau releases audits of publishers’ submitted circulation figures more or less every week.

Reader Comments


December 28, 2005 3:12 PM

I do not pretend to know what Mr. Fine's qualifications are, but someone in his position should know that the Audit Bureau of Circulations is generally referred to as ABC, and there reports are known as ABC Audits. What I find most curious about this article is Mr. Fine's acceptance of 2003 circulation figures being released on December 22, 2005. How are media buyers supposed to purchase advertising on figures that have been 6.7% off of rate base for over 2 years?


December 29, 2005 4:25 AM

Just got a special offer from Forbes which is as low as around US$10 for 24 issues. Is it a way to boost the subscription? Anyway, since Forbes is not my cup of tea, I would not take their offer even the price is incredibly low. In addition, this kind of price-cut strategy would actually hurt its status quo.

Jon Fine

December 29, 2005 2:34 PM


Good point on Audit Bureau/ABC. My old habits were kicking in: At Ad Age, where I worked before coming to BusinessWeek, the style was to call ABC the "Audit Bureau." That 2003 audit for Forbes was a "revision" of a previous audit. (Looks like new rules on counting circulation are being retroactively applied.)


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