Home-Delivery Promotions Guide

Introduction

This guide is intended to explain and clarify the rules and guidelines governing promotions for Canadian newspapers that generate circulation to be classified as individually paid home delivery on AAM documents, regardless if the subscription is delivered in print or digital format.

This guide is not intended to be all-inclusive, but provides general guidance on the most common home-delivery initiatives. It is effective as of the posting date noted at the bottom of each Web page.

Simply click on a topic below for guidance on AAM rules and guidelines, explanations and examples.

It is the publishers’ responsibility to ensure their home-delivery promotions are executed in compliance with all AAM rules and guidelines. Upon request, AAM’s Publisher Relations department provides a confidential review of members’ programs. To take advantage of this review or if you are developing an initiative that is not addressed in this guide, please contact your Publisher Relations manager.

All Examples

Definitions

Home Delivery

Home-delivery circulation is defined as subscriptions purchased by individual consumers for personal use. A subscription is defined as the purchase of more than a single issue of a newspaper, either in print or digital format.

Home-delivery copies are often delivered to subscribers in one of the following methods:

• Carrier: Individual that delivers the newspapers on foot
• Motor Route: Individual that delivers the newspapers via a motor vehicle
• Mail: Copies delivered via the United States Postal Service
• Digital Editions: copies delivered digitally. See also Digital Edition Guide.

Basic Prices

A basic price is the price that anyone can purchase a subscription from the newspaper at any time. A newspaper establishes its own basic prices and discloses them in paragraph 6 of the publisher’s statement.

Basic prices may be established for the following methods of distribution:

• Mail
• Home Delivery
• Motor Route
• Single Copy
• Digital Editions (effective 7/28/08)

Within each of these categories, one basic price may be established for each of the following:

• AAM zone (city zone, retail trading zone, newspaper designated market, etc.)
• Frequency of delivery (Sunday-only, seven-day, weekend-only, etc.)
• Term (various subscription lengths such as one-month, 13-weeks, one-year, etc.)

Basic prices may not be established for specific editions of the newspaper or based on payment method.

See also Rule C 101.2 Prices.

Paid Circulation

AAM defines paid circulation as subscriptions and single copies paid at an amount of at least one cent, net of all considerations.

See Rule C 101.1 Paid Circulation Defined.

While Rule C 101.1 Paid Circulation Defined is the primary rule defining paid circulation, it is not the only AAM rule a newspaper must consider when creating home-delivery promotions. Rules also exist governing premiums, combination sales, frequency conversions, etc. Therefore, a newspaper must consider all other pricing rules applicable to the program they are developing.

Apartment Programs

An apartment program is defined as a situation when a subscription to the newspaper is included with the cost of the monthly apartment rent, but where the tenant may receive a refund of the subscription value if the subscription is declined.

Qualification

For the subscription copies included with the monthly apartment rent, the lease (or lease addendum) for the apartment must:

• State the term (monthly) and frequency of the subscription.
• State the amount of the rent per month allocated to the subscription (subscription value).
• Ask the tenant if they wish to receive the subscription (yes and no response options).
• State that if the subscription is declined, a refund for the subscription value will be provided.
• Exclude any reference to the subscription as being free, no additional cost, bonus, or other synonymous language.

Pricing

The subscription value must be at least one cent, net of all considerations.

Promotional Material

The promotional material is the lease addendum. Therefore, it must comply with the requirements stated above.

Example—Apartment Programs

Reporting

Circulation generated from apartment programs is classified as Home Delivery—Sales with Other Services on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic price, and circulation sold at less than 50 percent of basic prices.

The price classificatin for apartment program subscriptions is based on the amount of the monthly rent stated on the lease addendum as allocated for the subscription (also equates to the refund value).

• If the amount allocated for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
  
  
• If the amount allocated for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 will provide an explanation of the apartment program including that subscriptions were sold in conjunction with apartment leases, the renter was given the opportunity to decline the subscription and if declined, the purchase price was refunded. It will also state the average number of copies included in paid circulation that were sold in this manner.

Charitable Donations

A newspaper may decide to donate a portion of the consumer’s subscription purchase price to a charitable organization and use this as an incentive to generate home-delivery circulation.

A newspaper may not use revenue from subscription sales to generate funds for Educational Copies.

Pricing

When a subscription to the newspaper is sold where the consumer is informed that a portion of the purchase price will be donated to a charity, the amount paid by the consumer must be no less than one cent, plus the amount presented to the consumer as a donation.

See Rule C 105.7 Sponsored Subscriptions and Rule C 101.1 Paid Circulation Defined.

Promotional Material

All promotional material must:

• State the term and frequency of the subscription.
• State the purchase price.
• Indicate the specific amount of the donation and name of charity.
• Reflect a qualifying price

Example—Charitable Donations

Reporting

Circulation generated from the sale of subscriptions inclusive of a charitable donation is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for charitable donation subscriptions is based on the net value of the subscription—the offer price less the amount of the donation.

• If the net value of the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
  
  
• If the net value of the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraphs 1G and 7.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 will provide a description of all charitable donation programs, including the price at which the subscriptions were sold, the amount of the donation, the name of the charity and the quantity of subscriptions sold.

Combination Sales

Combination sales include the sale of two or more different publications as a package to new or renewal subscribers.

A subscription combination sale is defined as the sale of a subscription to two or more different publications as a package during new, renewal or billing efforts, and where each publication in the sale is a priced product. A newspaper subscription may be sold in combination with another newspaper or a periodical.

Please note that a subscription to each publication in a combination package must be generally available for sale in the marketplace independent of each other.

See Rule C 105.3 Combination Sales.

Pricing

A publication may create a solicitation piece for combination sales as follows:

• Promoting only the sale of the combination package.
• Sale of both publications for one package price.
• Promoting the combination package as well as a subscription to one or both of the publications individually (optional). ­
  
  • The sale of one or both publications individually in the solicitation piece is optional.

If the solicitation material is promoting the sale of only the combination package, then the purchase price offered to the subscriber must be a minimum of the following:

• Once cent for each newspaper in the sale, plus
• One cent per periodical in the sale.

If the solicitation material is promoting the combination package as well as a subscription to one or both of the publications individually, then the purchase price offered to the subscriber for the combination must be a minimum of the following:

• 100 percent of the selling price for the subscription with the highest individual subscription price involved in the sale.
• One cent for each additional newspaper and one cent for each additional periodical subscription in the sale.

Promotional Material

All promotional material must:

• State the publications involved in the combination package.
• State the term for all publications in the package (and frequency for newspapers involved).
• State the purchase price for the combination package.
• State the purchase price for a subscription to one or both publications individually, if offered (optional).
• Reflect a qualifying price.
• Exclude any reference to any of the publications as being free, no additional cost, bonus, or other synonymous language.

Examples—Combination Sales

Reporting

Circulation generated from combination subscription sales is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

• If the subscription value for the newspaper is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the subscription value for the newspaper is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraphs 1G and 7.

The subscription value for each publication in a combination sale is determined in one of two ways:

1. The stated value of each publication in the offer, if it exists.
2. A pro rata of each publication’s basic home-delivery prices, if no individual values are stated. (For periodicals, you would use the publisher’s annual suggested price.)

For Example:

For reporting purposes, the value of Publication A is $25 and the value of Publication B is $75.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 will provide an explanation of the combination sale, including the name of the publications involved and the price(s) at which the combination package was sold.

Contests

A newspaper may choose to entice the sale of subscriptions by offering purchasers the opportunity to enter a contest to win a prize. Offering an individual the chance to enter a contest would not impact the qualification of the subscription purchase.

Technically, if the winner of the contest is a subscriber, then he or she has now received a gift as a direct result of purchasing the newspaper. However, since there would be only one winner, affecting only one subscription, then the impact to paid circulation would be immaterial.

Only if the newspaper held a significant number of contests or offered a significant number of prizes over the course of the audit period that impacted circulation materially, would AAM consider the contest to impact paid circulation.

No disclosure of these contests is required.

See also Rule C 105.5 Contests and Coupons.

Discounts

A newspaper may choose to sell subscriptions at a price discounted from basic prices to encourage consumers to buy the newspaper.

Pricing

Subscriptions of the newspaper may be sold at a price of at least once cent, net of all considerations.

See the definition of paid circulation.

Promotional Material

All promotional material must:

• State the term and frequency of the subscription.
• State the purchase price.
• Reflect a qualifying price.

Example—Discounts

Reporting

Circulation generated from discounted subscription sales is classified as Home Delivery on the AAM publisher's statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for discounted subscriptions is based on the subscription price offered to the consumer.

• If the price offered for the subscription is 50 percent of more of basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure ini paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 6 lists all reduced prices at which the subscriptions were sold. This listing includes the frequency, term and price at which the subscriptions were purchased.

Easy Pay Programs

Easy Pay programs are defined as those programs where a subscriber pays for the subscription on a continuous basis through the automatic billing to a debit or credit card. The subscriber will continue to receive delivery of the newspaper until they contact the newspaper to cancel service or future payment (billing).

Easy Pay programs are subject to all the same AAM rules and guidelines as any other home-delivery offers including premiums, discounts, combination sales, etc. Therefore, if you are considering a home-delivery promotion for Easy Pay, please see the other promotion types discussed in this guide.

REMINDER:
Basic prices may not be established specifically for Easy Pay subscriptions. The home-delivery basic prices that are established for the newspaper are the basic prices from which all home-delivery circulation is measured for qualification. See basic prices.

Free: Part of a Single Subscription Term Stated as Free

A newspaper may wish to construct a new or renewal subscription offer where part of the total term of delivery (subscription length) is presented to the consumer as free, trial, risk-free, no additional cost, bonus, no extra charge or other synonymous language.

The circulation associated with the entire period of delivery has the opportunity to be classified as paid circulation on AAM reports provided the promotional material presents a perceived cost to the consumer for the entire subscription term. This may be accomplished by stating the full-delivery term and cost of the subscription in the contract portion of the order.

See Rule C 101.1 Paid Circulation Defined.

The contract portion of the order is the material the consumer returns to the publisher such as:

• The direct mail card.
• The portion of a solicitation flyer that must be mailed to the publication.
• The order page on the Internet.
• The point of verbal agreement in a telemarketing script or inbound call.

Pricing

AAM rules require that a subscriber pay at least one cent, net of all considerations—for the entire delivery term of the subscription, inclusive of the weeks represented as free.

Promotional Material

All promotional material must:

• State the term of the subscription that is paid and the term that is free.
• State the frequency of the subscription.
• State the purchase price.
• Contain language in the contract portion of the offer that states the full-delivery term and purchase price of the subscription.
• Reflect a qualifying price for the entire term of delivery.

For Easy Pay offers, if part of a term is presented as free, then the promotional material must contain language that implies value to the free term with a paid portion of the offer. For example, if it solicits “Choose Easy Pay and get the first 4 weeks free,” then the value can be implied by stating, “That’s the first 8 weeks for the price of 4.”

Examples—Part of a Single Subscription Term Stated as Free

Reporting

When part of the subscription term is presented as free to the consumer, the end result is an offer at a reduced price (discount). Therefore, the reporting is the same as that for discounts.

Circulation generated from discounted subscription sales is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for discounted subscriptions is based on the subscription price offered to the consumer.

• If the price offered for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 6 lists all reduced prices at which the subscriptions were sold. This listing includes the frequency, term and price at which the subscriptions were purchased.

Frequency Conversions (Upgrades)

There are two types of frequency changes:

• Forced conversion
• Frequency upgrade

Note: The expiration date of the subscription should not be extended as the result of a frequency change unless it is done in conjunction with renewal or billing efforts where the consumer is contracting for a new, extended term.

Qualification

Forced Conversions
A forced conversion is when the newspaper is eliminating a subscriber’s current frequency of delivery and needs to begin service of a new frequency as a replacement. By eliminating the frequency, the newspaper is forcing the subscriber to receive a new upgraded frequency. For all the copies distributed as a result of the forced conversion, the following is required:

• A frequency may be eliminated for one or multiple AAM zones. However, the frequency must be eliminated throughout an entire zone.
• After the date the frequency is eliminated, no subscriber may remain on the eliminated frequency for any reason.
• The former frequency must not be reinstated for a period of at least three months.
• All subscribers having their frequency eliminated must be notified of the change.
• The notification may not state that any of the additional days of delivery are free, no additional cost, no extra charge, bonus, or other synonymous language. Rather, it should state the additional days are included with the cost of the current paid subscription.
• See Rule C 105.12 Subscription Offer Based on Acceptance Unless Declined.

Frequency Upgrades
A frequency upgrade is when the newspaper is not eliminating a subscriber’s frequency, but wishes to service subscribers at a greater frequency. For all copies distributed as a result of the frequency upgrade, the following is required:

• Notice of a change in frequency must be sent to the affected subscribers prior to the start of the upgraded service.
• The notice must offer the subscriber an opportunity to opt-out and provide clear and simple instructions on how to do so.
• The notice to the subscriber may not state that any of the additional days of delivery are free, no additional cost, no extra charge, bonus, or other synonymous language. Rather, it should state the additional days are included with the cost of the current paid subscription.

Pricing

The amount of money originally paid by the subscriber must equal no less than one cent.

Promotional Material

For a forced conversion, all notifications to the subscriber must:

• State the current frequency has been eliminated and identify the new frequency that will be delivered.
• Identify the date the frequency change is effective.
• Exclude any reference to the additional days of delivery as being free, no additional cost, bonus, or other synonymous language. Rather, it should state that the additional days are included with the cost of the current paid subscription.

For a frequency upgrade, the promotional material must:

• State the new frequency that will be served.
• Contain a clear and conspicuous notice informing subscribers they can opt-out of this upgraded delivery.
• Provide clear and simple instructions on how to opt-out.
• Exclude any reference to the additional days of delivery as being free, no additional cost, bonus, or other synonymous language. Rather, it should state that the additional days are included with the cost of the current paid subscription.

Examples—Frequency Changes

Reporting

Circulation generated as a result of forced conversions and frequency upgrades is classified as "Home Delivery - Frequency Conversion" on AAM documents.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for upgraded subscription circulation is based on the amount the subscriber originally paid for their current subscription as compared to the basic prices for the new frequency of delivery.

• If the original amount paid for the subscription is 50 percent or more of basic prices for the upgraded frequency, the circulation is included in paragraph 1A.
• If the original amount paid for the subscription is less than 50 percent of basic prices for the upgraded frequency, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 will disclose the following details for each change in frequency: the former frequency, the new frequency, the number of subscribers affected, the impact on paid circulation, the effective date of the change, and the AAM zone(s) in which the change occurred.

Gift Subscriptions

A gift subscription is defined as a subscription purchased by an individual for another individual as a normal expression of friendship. The same individual may purchase gift subscriptions up to a quantity of 50.

Quantities of 50 gift subscriptions or more, purchased by a single individual, shall be considered third-party sales. Subscriptions purchased by a business entity to promote their professional or business interests, at any quantity, shall not be considered gift subscriptions. Rather, these sales would be considered third-party sales. See the guidelines for third-party sales.

Pricing

A qualifying price for the sale of two subscriptions to the same newspaper by a single individual, regardless if delivery addresses are different, is one cent per subscription, net of all considerations.

Promotional Material

All promotional material must:

• Identify the number of subscriptions in the sale.
• State the term and frequency of each subscription.
• State the purchase price.
• Reflect a qualifying price.
• Exclude any reference to any of the subscriptions as being free, no additional cost, bonus, or other synonymous language.

Example—Gift Subscriptions

Reporting

Circulation generated from gift subscriptions is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for sales of gift subscriptions is based on the subscription price offered to the consumer.

• If the price offered for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

See also multiple subscriptions to the same newspaper.

Joint Distribution Agreement

A joint distribution agreement (JDA) is defined as a situation when a newspaper that publishes less than seven days a week wants to distribute copies of another newspaper on those days of the week when it does not publish.

For example, Newspaper A publishes a newspaper on Monday through Saturday, but not on Sunday. Newspaper B publishes seven days a week. Newspaper A may wish to enter into a joint distribution agreement to service its subscribers with Newspaper B on Sunday.

Qualification

If a newspaper wishes to enter into a joint distribution agreement, the following requirements must be met as of the date the agreement becomes effective for the newspaper that does not publish seven days a week:

• The service of the joint days must be effective for all subscribers, by reporting market.
• All frequencies of the newspaper must include the joint day(s) of delivery
• It may only enter into a joint distribution agreement for no more than two days on which it does not publish.

Example:

As of the effective date of the joint distribution agreement, the following must occur:

• The Friday and Sunday issue of Newspaper B must be forced on all subscribers of Newspaper A.
• All frequencies of Newspaper A offers must include the Friday and Sunday issues of Newspaper B.
• Newspaper A may not expand its joint distribution to include Saturday of Newspaper B, as it is already servicing the maximum limit of two joint days on which it does not publish.

Note: If Newspaper A does not wish to force Newspaper B on all of its current subscribers, then the joint distribution agreement concept is not applicable. The sale of the two publications together would be a combination sale and all combination sales rules and guidelines would apply.

Pricing

A basic price must be established for the joint distribution agreement frequency.

All current subscribers to whom the joint distribution service was added must have paid a minimum of one cent, net of all considerations. All new and renewal subscription offers must reflect a qualifying price of no less than one cent, net of all considerations.

Promotional Material

All promotional material must:

• State the two newspapers involved in the joint distribution agreement.
• State the term and frequency of the joint distribution service.
• State the purchase price.
• Reflect a qualifying price.
• Exclude any reference to either of the newspapers as being free, no additional cost, bonus, or other synonymous language.

Example—Joint Distribution Agreement

Reporting

Circulation generated from joint distribution subscriptions is classified as Home Delivery—Joint Distribution Agreement on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for joine distribution subscriptions is based on the subscription price offered to the consumer compared to the joint distributin basic price(s).

• If the price offered for the subscription is 50 percent or more of the joint distribution basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of joint distribution basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 will provide a description of the joint distribution agreement. For each agreement, the details disclosed include the name of the two publications involved, the basic price(s) for the joint distribution service, and the fact that no other service option is available for the newspaper published less than seven days.

Multiple Subscriptions to the Same Newspaper

A multiple subscription sale is defined as the sale of two or more subscriptions of the same newspaper to one individual, for personal use (not intended for resale).

If multiple subscriptions are being purchased by a business to promote their professional interests, then home-delivery rules do not apply, rather the sale is governed by the guidelines for third-party sales.

Pricing

A qualifying price for the sale of two subscriptions to the same newspaper by a single individual is one cent per subscription, net of all considerations.

Promotional Material

All promotional material must:

• Identify the number of subscriptions involved in the sale.
• State the term and frequency of each subscription.
• State the purchase price.
• Reflect a qualifying price.
• Exclude any reference to any of the subscriptions as being free, no additional cost, bonus, or other synonymous language.

Examples—Multiple Subscriptions to the Same Newspaper

Reporting

Circulation generated from multiple subscription sales is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for sales of multiple subscriptions is based on the subscription price offered to the consumer.

• If the price offered for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
  
  
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraphs 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Also see gift subscriptions.

Premiums

Premiums are defined as any item or inducement offered to an individual to entice them to purchase a subscription. The premium item could be anything that is:

• Free
  ­
  • “Buy a subscription and get a free $20 gift card to a local home improvement store!” ­
  • The gift card is a premium.
    
    
• A discount
  ­
  • “Buy a subscription and get a coupon for $5.00 off your next oil change!”
  • The $5.00 coupon is a premium.
  • Note: Coupons in the newspaper (ROP and FSI) are not considered premiums.

The following items are not considered premiums:

• Publications (newspaper and periodical) published four or more times per year. In these cases, combination sales rules and guidelines apply.
• Part of the subscription term. See the section on part of a single subscription term stated as free.
• Free or discounted access to the archives or back content.
• Free or discounted access to online content or digital edition from the same editorial home page of the publication.
• Anything sent free by mail with the subscription offer or sample merchandise that can be ordered and received regardless if a subscription is purchased.
• Items offered to current paid subscribers as an inducement to convert to payment method for a future subscription.
• See also Rule C 105.1 Premium Defined.

Pricing

AAM rules require that when a premium is offered with a subscription, the consumer must pay at least one cent, plus no less than the full value of the premium. See Rules C 101.1 Paid Circulation Defined and C 105.2 Premiums with Subscriptions/Single Copy Sales.

The full value of the premium is considered to be the highest of the following:

• Stated value (value stated on the promotional material)
• Retail value (price it would cost a consumer to buy the item in the public marketplace)
• Cost to publisher (cost to obtain or produce the item)

In some cases, an item may not be sold to the public and the promotional material will not state a value. In those cases, the cost to publisher would be used to determine the premium value. However, if more than one value exists, the premium value is always considered the highest value for AAM qualification.

Promotional Material

All promotional material must:

• State the term and frequency of the subscription.
• State the purchase price.
• State the premium being offered with the sale of the newspaper.
• Reflect a qualifying price.

The promotional material may state that the premium is free to the consumer with the purchase of the subscription. The subscription itself may not be stated or implied as free.

Examples—Premiums

Reporting

Circulation generated from subscriptions sold with premiums is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for subscriptions sold with premiums is based on the net value of the subscription—the offer price less the value of the premium.

• If the net value of the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the net value of the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraphs 1G and &.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 lists all of the premiums that were offered, the value of the premium, and the term, frequency, and price of the subscriptions sold with a premiums offered.

Previous Sunday

The program commonly referred to as the previous Sunday program is one where a consumer is offered a copy of the most recent Sunday paper with the purchase of a new subscription. This Sunday is additional to any Sunday copies included in the new subscription term.

Qualification

For the previous Sunday to be claimed as paid circulation, the following requirements must be met:

• Must be offered to only new subscribers.
• The consumer must take affirmative action to accept the previous Sunday copy (opt-in).
• The previous Sunday may not be reported as free, no additional cost, bonus, or other synonymous language.

Pricing

For the previous Sunday to be claimed as paid circulation, the consumer must pay at least one cent for the new subscription (inclusive of the previous Sunday), net of all considerations.

Promotional Material

All promotional material must:

• State the term and frequency of the new subscription.
• Require the subscriber to take affirmative action to accept the previous Sunday (opt-in).
• State the purchase price for the new subscription.
• Reflect a qualifying price.
• Exclude any reference to the previous Sunday as being free, no additional cost, bonus, or other synonymous language. Rather, state the cost of the previous Sunday is included in the price of the subscription.

Example—Previous Sunday

Reporting

Circulation generated from new subscriptions inclusive of a previous Sunday is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for new subscriptions inclusive of a previous Sunday is based on the subscription price offered to the consumer.

• If the price offered for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Sale of a Subscription with Other Services

A publication may include a subscription of the newspaper with the sale of other services such as cable television, Internet, or phone service.

If a third party purchases the copies for the recipient (such as a cable, Internet, phone company, etc.), those programs would be governed by the guidelines for third-party sales.

Qualification

In circumstances where a subscription is offered in conjunction with the sale of another service, the following is required: (See AAM’s Policy on Sales with Other Services).

• The decision to purchase the subscription must be separate and distinct from the purchase of the other service.
• The consumer must take affirmative action (opt-in) to order the subscription.
• An incremental cost for the subscription must be charged to the consumer above the cost of the other service.
• The invoice, receipt, or billing statement for the other service must itemize a qualifying price for the subscription separate from the cost of the other service.

In other words, the newspaper copies may not be automatically included with the purchase of another service. The other service must be available for sale without the inclusion of the newspapers. The cost of the other service on its own must be less than the cost with the newspapers by a qualifying price for the newspapers.

Pricing

A qualifying price for a subscription sold with other services is one cent, net of all considerations.

Promotional Material

All promotional material must:

• Offer the consumer the choice to purchase the subscription as a separate decision from purchasing the other service.
• State the term and frequency of the subscription.
• State the purchase price for the subscription.
• Reflect a qualifying price.
• Exclude any reference to the subscription as being free, no additional cost, bonus, or other synonymous language.

Examples—Sale of Subscriptions with Other Services

Reporting

Circulation generated from subscriptions sold with other services is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for subscriptions sold with other services is based on the subscription price offered to the consumer.

• If the price offered for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Subscriber Loyalty Programs

A subscriber loyalty program is defined as a reward program to subscribers as a value-added benefit. It is designed to promote brand loyalty by demonstrating appreciation to subscribers and providing added value for advertisers. These loyalty programs commonly include, but are not limited to, additional news content, VIP ticket access, discounts to local retailers, etc.

If a newspaper’s loyalty program meets all of the following conditions, the program shall not be subject to the premium rules:

• Requires enrollment initiated by the subscriber. Automatic enrollment is not permitted.
• Rewards take the form of either merchandise or points redeemable for merchandise.
  • May include benefits such as, but not limited to, access to archives of the newspaper, other editorial content generated by the newspaper, community calendars, discounts to retailers, VIP access to events, and access to newspaper sponsored events and services.
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  • Cannot include access to paid print or digital subscriptions of other publications.
  • Rewards cannot be converted to cash or accepted as payment for a subscription to the newspaper.
• Rewards provided to a new subscriber in the first 90 days of their term may not exceed the price they paid for the subscription.
• The newspaper may designate who is eligible for membership in the program and level of membership that may be obtained.

If a newspaper’s loyalty program meets all of the above conditions, the explanatory paragraph of the publisher’s statements and audit reports must disclose the details of the program offered including a description of the program and the number of participants.

If a newspaper’s loyalty program does not meet all of the conditions listed above, then the following applies:

• When membership is offered to subscribers as a free benefit or gift for subscribing, then the membership is viewed by AAM as a premium and is subject to all premium rules.
• The newspaper must make membership in the program available to non-subscribers (for a price).
• The price at which the membership is sold to non-subscribers is considered the premium value.
• Per the premium rules, all subscribers receiving membership in the program must have paid at least one cent, plus the full premium value. In Canada, the minimum price is one cent, plus the full premium value.
• A description of the program, its value, and number of subscriptions sold through the program will be disclosed in the publisher’s statements.
• See also premiums and premium example.

Subscriptions Purchased with Award Points

Subscriptions purchased with award points refers to programs where a consumer may purchase a newspaper subscription by redeeming accrued award credits, in lieu of cash. Commonly known award point programs include frequent flyer programs and credit card programs.

Qualification

The qualification requirements for subscriptions purchased with award points primarily focuses on the structure of the reward point program.

The qualification requirements are as follows (See Rule C 105.9 Subscription Purchased with Award Points)

• The award programs must:
  • Build brand loyalty of discretionary goods and services and increase the sales of a host organization.
  • Require an enrollment process.
  • Require points be earned as a result of specific incremental actions performed by the consumer. The consumer must be fully informed of the actions necessary to earn points including volume of points for each activity.
  • Make accrued points available for future redemption.
  • Make a consumer’s account status accessible on a regular basis.
• The consumer must be fully aware of all items that may be obtained for the redemption of points.
  • All items offered must have a stated value in points or dollars.
  • At least 20 percent of all items offered for the redemption of points must be non-publication items. At least half of all the non-publication items must be commercially available.
  • The value of each commercially available item must be equal to or greater than the average value of all publications available.
  • The program may provide an initial award of no more than 35 percent of the points needed to obtain the least expensive product or service in the program.
• Each point must have a monetary value.
  • The product value divided by the assigned point value equals the per-point value.
  • The point value must be consistent for all award items.
• If the points have an expiration date, the program must allow time for sufficient accumulation of points to redeem the highest valued item.

Pricing

A qualifying price for a subscription purchased with award points is one cent, net of all considerations. This can be determined by multiplying the per-point value for points in the program by the number of points required for the acquisition of the newspaper subscription.

Promotional Material

All promotional material for the award program must reflect the requirements listed above.

The promotional material to encourage consumers to redeem their points for subscriptions must:

• State the term and frequency of the subscription.
• State the number of points required to obtain the subscription.
• Reflect a qualifying price (based on per-point value times the number of points required to obtain the subscription).

Reporting

Circulation generated from subscriptions purchased with award points is classified as Home Delivery on the AAM publisher’s statement.

Canadian publisher's statements delineate between circulation sold at 50 percent or more of basic prices and circulation sold at less than 50 percent of basic prices.

The price classification for subscriptions purchased with award points is based on the subscription price offered to the consumer—the per point value multiplied by the number of points required to acquire the subscriptions.

• If the price offered for the subscription is 50 percent or more of basic prices, the circulation is included in paragraph 1A.
• If the price offered for the subscription is less than 50 percent of basic prices, the circulation is included in paragraph 1B, with further disclosure in paragraph 1G.

In paragraph 2, the circulation is classified in the proper reporting zone based on where the copies are delivered to the subscriber.

Paragraph 8 provides a description of the program including the name of the award program, the term and frequency of the subscriptions, the number of points necessary to obtain the subscriptions, and the total value of points redeemed for the subscription (subscription value).

For the Audit

For all home-delivery circulation promotion efforts, a newspaper must maintain a file for each audit period that has an example of each promotion solicitation piece that is used. See Rule B 101.1 File Copies, Subscription Promotion Offers.

This includes, but is not limited to:

• Direct mail pieces
• Order forms
• Telemarketing scripts
• Radio scripts (or recording of radio advertisement)
• Television scripts and storyboards (or recording of television advertisement)
• Print out of website pages
• Point-of-purchase material (signs, posters, etc.)
• Advertising campaigns (run of press and free standing insert)

The newspaper should be able to identify the internal promotional code assigned for each specific and unique promotion.

For reporting of many of the various programs, the quantity of copies sold for each program is required. Therefore, the newspaper must also maintain a production report for each of the promotions executed during the audit period.

It is the publishers’ responsibility to ensure their home-delivery promotions are executed in compliance with all AAM rules and guidelines. Upon request, AAM’s Publisher Relations department provides a confidential review of members’ programs. To take advantage of this review or if you are developing an initiative that is not addressed in this guide, please contact your Publisher Relations manager.

In addition to a review of the promotional material, the auditor will evaluate the financial relationship such as wholesale rates, credits and debits issued, and collection procedures between the newspaper and its home-delivery contractors. The auditor will also review a selection of subscriber accounts for detailed testing. Therefore, access to the records of any agents and subscribers will also be required. These records may include, but are not limited to copies of invoices, draw sheets, collection reports, debit and credit memos, payments, and bank deposits.

It is imperative to the efficiency of the audit that the publication responds in a timely manner to all auditor requests for documentation to support circulation claimed as home-delivery.