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AUDIT BUREAU OF CIRCULATIONS (ABC)

ANNUAL REPORT 2013/2014 (Presented at the Annual General Meeting – June 20, 2014)

The new Board appointed at the AGM on June 28, 2013, under the leadership of Mr. Karthi Palanisamy, continued to lift the awareness of the ABC and drive on activities amongst key stakeholders and potential Members to deliver trust to the media industry.

ABC Chairman

Presently ABC secures audited circulation of print publications and digital replica of print publications for the benefit of the marketing and communications industry. ABC is also planning to introduce audit of digital publications and audit of the qualifying traffic to websites and other media platforms. In the long run, ABC is establishing to become the one stop body that announces audited circulation, traffic, viewership, listenership of print, digital, websites and other media so that the marketing and communications industry will refer to the figures announced by ABC for media planning decisions. The Board for the term 2013-2014 cultivated a strong and close working relationship and together with the various Sub Committees set up, strived to provide the marketing and communications industry with accounted, verified, scrutinized and transparent data in its commitment in delivering trust for media planning decisions. SUMMARY OF ACTIVITIES Audit

The Audit Committee chaired by Ms. Margaret Au Yong worked tirelessly in scrutinizing the Audited Net Average Circulation Returns submitted by members. These returns were compiled by members who practiced conservative accounting procedures, verified by Certified Public Accounting Firms, scrutinized by the Audit Committee before the Net Average Circulation Figures were endorsed by the Board. A strong trial of accounting and verification is Margaret Au Yong is practiced.

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Check audits are performed by the Audit Committee as one of the measures to ascertain the true and fairness of the figures reported in the Net Average Circulation Returns submitted by members. A series of measures to maintain and raise the credibility and integrity of ABC Audit was recommended by the Committee to be put in place. The Audit Committee reviewed the audit files of selected auditors in November 2013 to have a better understanding on the Returns submitted. The Committee Members also visited vendors in Kuching to obtain a feel of the pick- up habits of the public and their feedback. The Committee was hopeful that all these measures that have been taken would help change the mind set of planning directors to believe in audited titles. Moving with the Times As ABC progressed with the new audit rules, a more comprehensive breakdown was helpful and relevant for the planners to see where the trends are and how they buy in terms of timing. These breakdowns would also assist in the check and balance amongst the stakeholders and further translate ABC’s mission towards transparency and credibility hence “Delivering Trust.” Digital Publication ABC is planning to audit the Circulation of Digital Publications, i.e. non-replica digital versions of print editions. Simultaneously, ABC is also reviewing the Circulation Reporting Standards of Digital Replica Edition. ABC has engaged Sanv Solutions Sdn Bhd. to develop the Circulation Reporting Standards for Digital Publications. The basis of this development is the guidelines prescribed by IFABC. A preliminary meeting to discuss the proposed Circulation Reporting Standards for the audit of the Digital Publications ((i.e. Digital Publications which are not Digital Replicas of Print Editions) was attended by over 25 members held on June 18, 2014 at Macomm Management Services Office. Members in attendance were encouraged to submit any points for review and consideration.

Preliminary Meeting

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The Board also received a number of complaints in relation to the use of ABC Circulation Figures in advertisements that could be misconstrued or misleading. In the spirit of maintaining industry unity, the Board are in the process of tightening the rules to cater to situations for which the standard action may not be sufficed. The Circulation Reporting Standards are constantly reviewed so that it is synchronized with present market trends. Nevertheless the Committee views content of a publication as the determining factor for its demand and plays an important role in an advertiser’s choice. Audit Chairman Presentation at Media Workshop Ms. Au Yong, shared the second half-year 2013 (July to December 2013) top line circulation numbers to delegates at the ABC Media Conference and Workshop 2014. Most dailies could not sustain the numbers after the first half of 2013 (January to June 2013), a period which coincided with the end of the General Elections in March 2013.

Sin Chew Daily (day edition) is the number one daily with 366,390 copies followed by Harian Metro (342,689 copies) and The Star (289,611 copies). Under the free and controlled category, The Sun recorded 305,000 copies, Red Tomato 209,599 copies and Malaysia SME 50,000 copies.

For the Sunday editions, Mingguan Malaysia topped with 372,046 while the seond and third places were occupied by Metro Ahad (361,645 copies) and The Sunday Star (292,225 copies) respectively.

In Sabah, See Hua Daily News leads with 27,608 copies. The Daily Express (25,655 copies) and The Borneo Post (23,088 copies) are ranked number two and three respectively.

The Sunday Post has the highest number of copies, 70,436 in Sarawak. See Hua Daily News (67,820 copies) and The Borneo Post (66,166 copies) are second and third respectively.

Ms. Au-Yong remarked that while the figures are important, ultimately it was the message and the content in the medium that are key factors in attracting consumers to purchase a publication.

ABCi ABC has partnered Malaysian Digital Association (MDA) to source for a vendor to

verify the traffic to websites computed by ComScore. Ernst & Young in the United

States was contacted to lay the foundations for the audit procedures on the

traffic to websites. However cost was the limiting factor to explore this further.

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As a large number of media owners use Google Analytics (GA) in marketing the

traffic visiting their website to the marketing communications industry, an

audited and verified set of GA figures would be advantageous to them hence

ABCi is considering verifying the GA figures quoted by media owners. This gives

rise to an opportunity for ABCi to verify not only the comScore statistics but also

GA’s data to attract local publishers with larger international audiences or global

publishers with local viewers to sign up for the service.

The business plan framework for ABCi revolves around growing the digital adex and verifying the accuracy of the reported figures. This takes into consideration the role that ABCi could play for authenticating data for digital television and mobile devices. Mr. Serm Teck Choon Chairman of ABCi and his Committee Members are working very hard to launch ABCi as soon as possible. A special mention has to be made to former Chairman, Ms. Chan Sheow Vern, for her efforts in driving ABCi. The Haunting Truth Marketing Campaign Ms. Chan Sheow-Vern, spearheaded the birth of a marketing campaign together with the former Publicity Committee Head, our current Chairman – Mr Karthi Palanisamy. The objectives of marketing campaign were two-fold: to stress to the advertisers that they should only advertise in titles whose circulation was verified and audited by ABC and to remind publishers that it would be beneficial for them to audit their titles where the world demands transparency and accountability. Millward Brown developed the pre-and-post online survey for ABC to assess the level of awareness and conviction amongst MAA and MSA members. The pre- marketing campaign survey, sent out since November 2013, and closed prior the launch of the marketing campaign, strongly suggested the need of a bold marketing campaign to wake the industry up.

The launch with partners

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An internal launch event was hosted to provide a final briefing to all the pro-bono partners who agreed to be part of this mega campaign and extend a goodwill gesture to serve the industry. The official launch of the campaign targeting the advertisers and agencies, took place on April 29, 2014 with the first teaser video being viewed and shared. Three other videos that suggested ghost sighting were subsequently uploaded and viewed within one and a half week. At the end of the second week, all press Member publishers printed the revelation advertisements to reveal the story behind those teaser videos. These are hosted on the microsite of www.hauntingtruth.com Following the ghost-sighting videos and advertisements, more than 90% of our members published the advertisements in their respective newspapers, including Members in East Malaysia, to tell the tale. Two very strong messages were sent. Phantom readers to target the advertisers and businessmen who want to ensure there is real return on their marketing investments and the message that “Truth cannot be Buried to awaken media agencies’ responsibility to safeguard both clients’ spend and trust. All these were executed in May 2014.

To be truly effective, letters will be written in the lingo that connects with CMO or the marketing heads, CFOs, Procurement Chief, as well as CEOs, and will be sent in phases to reinforce awareness and actions by advertisers. This is executed in the hope of securing one simple action – advertisers to insist on ABC- verified and audited titles. The Board was encouraged to learn that the campaign’s online partners were keyed up for the opportunity to be part of this marketing campaign launch and to make the necessary buzz. The Board also thanked the campaign’s print partners for allocating space for the advertisements, which plays an equally important part in the success of the campaign. Credit has to go out to partners such as Says.com, RevAsia, Yahoo, BFM, Starcom, Creative Juice-Sil and Millward Brown who made this a success.

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Joint Industry Technical Committee (JITC)

Ms. Margaret Lim who chaired the first Committee meeting of the JITC examined the data generated by Nielsen Audience Measurement Sdn. Bhd. (Nielsen) for the industry’s media planning decisions. One of the main objectives of the JITC was to ensure that the Readership Figures derived

Margaret Lim

from the surveys conducted by Nielsen and the Net Average Circulation announced by ABC was not materially different. Nielsen representatives were invited to the second meeting openly discussing the issues concerned where Nielsen representatives presented the various researchers that they have conducted, especially their method of execution, and addressed the various other issues raised by the industry members. The JITC proposed an audit of the survey methodologies adopted by Nielsen to have a better understanding on the input of the survey improvement with a view to formulate solutions to satisfy the sentiment of the marketplace. The reconciliation between the two set of figures is vital for media planning decisions. The effort put in by the ex-chairman of the JITC, Ms. Margaret Lim on the matter is appreciated. In March 2014, it was resolved that the board will discuss any technical matters internally at Board level and take any key decisions affecting them. Website The new website, under the watch of Mr. Jeremy Lim, went live at the end of January 2014. The revamped site offers incentives to members through links to their respective websites while the membership directory page is another promotional avenue for members. It also highlights news and articles that are informative, relevant and current to add benefit to membership and encourage visits to the sites.

Jeremy Lim – Website Chair

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Mr. Giam Tee Hoong is constantly sourcing for content beneficial to the marketing and communications industry to be featured and updated on the website so that it would be constantly visited. Members were encouraged to contribute relevant contents. Ms. Lim Bee Leng, who is responsible for the site’s advertisement sale and promotion, has generated sufficient income for the site’s maintenance. Fund-raising ABC Forum 2013

Paul Dovas Pattrik Ting

The ABC Forum 2013 – Relevance: Circulation v Readership – was held on June 3 and drew more than the anticipated 280 participants. A panel discussion entitled Is Circulation Relevant and was followed by another discussion The Great Debate: Who will Stand?

Panelists Tan Sri Vincent Lee (The Star); MV Swaminathan (MPA); Ms. Margaret Lim (Aegis Media); Mr. Law Chan Keong (MEC); Ms. Chan Sheow Vern (Unilever); Ms. Chan May Ling (DIGI) contributed their views on The Great Debate: Who will Stand?, which was moderated by Mr. Peter Das.

Panel Speakers

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Mr. Pattrik Ting, the Chair of the Organising Committee as well as the Fund Raising Committee, generated a surplus of approximately RM38,000.00 from the Forum and garnered an overwhelming response of over 300 participants. The Board commended the efforts of Mr. Pattrik Ting, his Organising Committee, Secretariat and RUP for the successful event.

The Board noted that the Forum attracted its target audience: media planners and advertisers which constituted two third of the audience. ABC Media Conference and Workshop 2014

Workshop Organizing Committee

Mr. Ben Chew was appointed as the Organising Chairman in August 2013 and set about putting together ABC’s biennial flagship event, which was held from May 22 to 25, 2014 at Ho Chi Minh City (Vietnam). The Board records their gratitude to the Organising Committee for meeting their target of capturing nearly 135 participants for the workshop entitled Economics of Media Convergence. The theme centred on the advent of digital media diluting the efficacy of traditional media resulting in further fragmentation of the media buying and spends reductions on traditional media. The Organising Committee adopted the theme to the setting of and access to the workshop by embracing technology to enhance the workshop experience and encouraging interactivity between all participants. The three key objectives of the workshop were:

The preservation of traditional media’s saliency in a digital media landscape;

Networking and partnerships; Sharing knowledge and experience.

The thrust of the media conference and workshop was that the media was facing a technology-savvy audience who seek information online that equip them to be aware of their choices and priorities.

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Media habits, as have been explored in previous editions of the media conference and workshop, have fragmented as the consumers’ engagement with specific channels has only intensified the need to cater to these trends. The 12 speakers delivered their respective topics by connecting with the theme and also the value of the ABC, which helped in arousing and maintaining the interest of the participants. At the end of the three-day conference, a feedback was gathered via the Organising Committee’s survey.

Speakers and ABC Board Conference in Session

The participants who responded to the survey rated the choice of topics highly and rated the knowledge of the speakers highly. The case studies that were presented also scored highly with the participants. They also found they will be able to apply the views and appreciated the interaction between them and the speakers. The Board were satisfied that the workshop fulfilled its objectives and protected the interest of the ABC and enhanced its importance to its audience. Rules and Regulations Legal counsel has been sought to review ABC CRS and the By-Laws so that it is practical and conforms to the present market environment and the relevant statue and legislations. The essence of the Rules and Regulations is for the practice of Self Governance by members in a healthy competitive market environment. In further expanding the visibility of ABC, the Board appointed a public relations firm in April 2014 to increase awareness of the body and promote the key activities of ABC for a three-month period. Board appointments The members of the Board for the term 2013-2014 were nominated by MAA, 4As and MSA and elected representatives of media owners at the 38th AGM of ABC held on 28.06.2013.

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Ms. Margaret Lim retired from the Board in February 2014 and MSA nominated Mr. Fan Chen Yip (Trading Director, Dentsu Aegis Network) to replace her. The Board acknowledges the sterling performance and commitment of Ms. Margaret Lim in ABC’s efforts to establish transparent, accountable and verified data for media planning decisions. In April the Board invited Mr. Serm Teck Choon (The Star) and Mr. Pete Yoong (Better Sdn Bhd.) as the MDA’s representatives in the Board to steer ABCi. Chairman The present terms for the Chairman of ABC are one year for 4As and MSA and two years for MAA. The Board agreed that it was essential that, in pursuing continuity and the completion of the tasks set out by the Board, a one year term for Chairmanship for 4As and MSA would be insufficient. The Board resolved to extend the present Chairman’s term for another year and this was endorsed by the Presidents of 4As, MAA and MSA. In the interest of parity and practicality, the Board endorsed a two-year rotation of the chairmanship amongst the 4As, MAA and MSA. Membership Membership forms, which have been reviewed and updated, are available in the website. The Committee will endeavour to expand the membership in 2014. In July 2013, Committee head Ms. Sherene Mak identified and compiled a list of the Top 20 Advertisers of Non-Audited Titles. She will be writing to them on the long term benefits of Audited Circulation Figures for their business sustainability and growth. The Board agreed and suggested to further explain the objectives of ABC and on the transparency of the Audited Net Circulation Figures announced by ABC on media planning for marketing communications decisions. AirAsia Berhad’s in-flight magazine, Travel 3Sixty°, was welcomed into ABC and Ms. Mak also reported that the Committee had received membership queries from several other publishers such as Ace Premier Com, Light House Mediar; Ttien Media Group, Sinar Harian and The Malay Mail. Membership forms, which have been reviewed and updated, were sent to these organisations and they will also be made available online. The Committee will endeavour to expand the membership in 2014. A stronger support from Members and a new injection of membership, both at Board and organisational levels, will broaden ABC’s progress.

Important Milestone MSA Malaysian Media Awards accepted non audited titles in the past and since 2013 only accept audited titles for the Best Use of Newspaper/Magazine award category. Ms. Sherene Mak who represented MSA in the Board is credited for this milestone.

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SUMMARISED FINANCIAL POSITION OF ABC as at 31st DECEMBER 2013 and of THE RESULTS FOR THE FINANCIAL YEAR ENDED 31st DECEMBER 2013 Financial Position as at 31st December 2013 Assets RM304,674 Prepayments RM163,117 Liabilities RM47,803 Results for the financial year ended 31st December 2013 Total Revenue RM266,555 Total Expenditure RM207,892 Net Profit RM 58,663