Periodical permits at risk over 75 percent ad rule

There’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.

Postal Tips by Max Heath

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.”
Requester publications cannot exceed 75 percent advertising in more than 25 percent of their issues.
The 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 New York City threatening loss of Periodicals mailing privileges for this violation.
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 is the same as ever.
Often, newspapers will get a warning from a friendly postmaster to correct prior to initiating revocation.

WILL I LOSE MY PERIODICALS PERMIT?
Not if you take immediate and sustained action to get the advertising percentage at 75 percent or below. Remember, you can be 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 email (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, at 75 percent or less for enough weeks to get the 12-month trailing 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-month average, 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), that there is no chance of staying in compliance.
Then there are other 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 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 for better 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 zero to 25 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.
The non-advertising rule is rooted in statutes that make Periodicals a unique and distinct class from advertising products, and they underpin the integrity that gives Periodicals lower pricing for having educational, scientific, cultural or informational value.
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 Postal One! at the original entry office are increasing based on member calls and emails. It’s not automatic, but postal employees can run an advertising report to see the how many issues are over 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 enough photos have been shot for a page or two of photos, but space limits coverage to perhaps two or three shots. Being over 75 percent may present opportunities to open up the paper a bit more, even if a week or so after the event when a problem arises. 
2. 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 newshole 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.
And I need to add that the magazines that you aren’t paid to insert, like American Profile and Relish, are measured on an advertising/editorial basis for each issue. 

© Max Heath 2017 Max Heath, NNA postal chair, is a postal consultant for Landmark Community Newspapers, and is sponsored by Interlink Software. Email maxheath@lcni.com.