Faced with declining circulation over the past decade, the newspaper industry has put on a brave face. Annual circulation declines have made newspapers less attractive to advertisers, which in turn has led to falling revenues cutting their margins and profitability. To make matters worse, advertisers have been pushing more and more aggressively for discounts. Now, in an attempt to convince advertisers they are still worth the money, the industry has decided to change a key pricing measure: the way it tallies the number of newspapers sold. The trick lies in the numbers.

The gold standard for setting advertising rates has long been the number of paid copies sold. Last month, circulation numbers complied by the Audit Bureau of Circulations, or ABC, contained an additional metric — total audience numbers. With this, the industry hopes to gradually focus on overall readership, or how many people read each copy rather than how many people buy copies. This new way of approaching circulation grew out of an initiative called Audience – FAX that was launched jointly by the ABC, Newspaper Association of America, or NAA, and Scarborough Research. The initiative aims to provide advertisers with an integrated number that includes the newspaper’s paid circulation, overall readership, and online audience measurements. This data could then be sliced in various ways to suit the needs of the advertiser.

With 206 papers from across America, Audience – FAX is the first-time that audience numbers are being measured at a national level. “Audience-FAX reflects a desire by both publishers and advertisers for a report that integrates circulation, print, and online readership, and website traffic data. The combination of these metrics reflects a more complete picture of a newspaper’s total audience,” says Jeff Sigmund, an NAA spokesperson. For example, The Boston Globe, with a circulation of 360,695, has one of the largest audience numbers — 1.9 million — for a regional paper. With the new metric, the paper could now sell itself with the aid of its much larger audience numbers and not just the smaller number of copies it sells.

So far, advertisers have kept quiet about the new audience numbers, but industry observers predict it will take at least five years for them to replace circulation numbers. After all, representatives from the advertising industry make up the majority of the ABC Board, which means the new moves have their support. And it would bring the U.S. newspaper industry in line with their Canadian counterparts, who have been using readership numbers for more than a decade in setting advertising rates.

Still there are constant reminders that circulation remains important. It brings in 20 percent of the revenue at most newspaper companies and printed copies command three times the advertising rates of the Web. “Circulation continues to be very important for advertisers that use inserts like circulars,” says Mark Fitzgerald, editor-at-large at Editor and Publisher magazine.

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