Wearing the White Hat: Delivering Numbers People Can Trust

I’m sure you’re aware of the alleged circulation fraud that surfaced recently at several large U.S. daily newspapers. Apparently, the pressures of delivering increased circulation numbers in a market of declining daily newspaper readership prompted some overly aggressive circulation directors to create phony circulation numbers. This came to light after several advertisers, claiming they were overcharged for their advertising and somehow aware of the phony circulation numbers, sued one newspaper. That the shortfall was brought to light by an advertiser rather than an internal audit only compounds the damage.

Unfortunately for those in print media, this wasn’t the first time a story like this broke. Remember Gruner + Jahr USA’s disclosures during the Rosie O’Donnell trial? In the course of testimony, senior company executives revealed they regularly inflated circulation numbers of their titles with little regard to actual paid circulation. Basically, the numbers the company reported to the marketplace and its advertisers were driven by internal pressures. They weren’t accurate. They misled advertisers. They misled clients. The company’s only defense: “The rest of the industry cheats, too.”

These stories have done incalculable damage to print media’s credibility. Unfortunately, they’re probably not over. I suspect a number of newspapers around the country will report lower circulation numbers over the next several reporting periods. Why? Because the newspapers that were caught are probably not alone.

The internal and external pressure on the industry over the past several years to report better circulation numbers has been intense. And it’s been delivered in the face of opposing realities in the marketplace. People are reading less. They’re subscribing less.

The damage to print media’s credibility — a reputation for honesty and integrity built over decades — will take a long time to repair.

Why is this relevant? We, too, live in a numbers-driven world. We have far more numbers to report about our audiences than any other media. It is one of our strengths. But we also live with pressures to make our numbers better. And in that area, we must avoid the trap print folks have fallen into.

We must wear the white hats. We must ensure the numbers we report to the marketplace, and to our advertisers, are above reproach. What does this mean in practice?

• Ensure internal integrity. This industry must make sure our numbers are accurate. When numbers seem too good to be true, look deeper and make sure they are true. We recently participated in a study that was so overwhelmingly positive for our partners and our company, we asked the research company to triple-check results before reporting them publicly. Had the numbers come out lower, that’s what we would have reported. When managers’ compensations are based on audience numbers they control and report, they must personally certify those numbers.
• Provide full transparency. Numbers in our industry can be complex, and they’re not always in agreement with each other (think about the discrepancy numbers generated by ad servers in the delivery of a third-party campaign). We must provide more information, not less, to be sure these discrepancies are fully disclosed to the people who pay the bills. Softening the reality of the numbers to make them easier to consume may help short-term sales but mislead advertisers in the long run.
• Admit mistakes. We will make mistakes. When we do, we must fully disclose them. We must provide full explanations, quickly.
• Be better than everyone else. We’re the new kids on the media block; we don’t have decades of reputation and credibility behind us. We must do more than everyone else. We must be better. Our numbers must not just seem more accurate, they must be more accurate. We must establish ourselves as the most credible source. That’s our opportunity.

In light of recent corporate scandals, corporate perp walks, and media-reporting fraud, credibility could be one of the most important business drivers in our industry over the next several years. We should own that driver. We should wear the white hats. We can — and should — be better.

Meet Dave at ClickZ’s upcoming AdForum. Join us for Search Engine Strategies in August.