MEDIA & MARKETING: When is a newspaper sale not a newspaper sale? That is the question advertising agencies have been asking themselves for the last week since the ABC circulations figures were published.

Agencies logging on to the ABC website last Thursday could be forgiven for being a little confused.

The circulation of Ireland on Sunday, owned by Associated Newspapers, was up a staggering 185 per cent for the second half of 2002.

But this increase, extremely large by the standards of the newspaper industry, did not seem to have greatly damaged the Sunday Independent, believed by most to be Ireland on Sunday's main rival. Strange, said many observers in the advertising world.

The Sunday Independent claimed an average circulation of 305,182, a 1.4 per cent drop, but hardly a massive plunge considering the rise of Ireland on Sunday.

All of this made agencies scratch their collective heads, until they discovered that only 90 per cent of the Sunday Independent's circulation were paid sales, known in the trade as "actively purchased" sales. Over at the Evening Herald the figure was lower at 85 per cent.

The remaining 10 per cent of the Sunday paper's circulation was made up of 25,738 on-off bulk sales and 5,572 regular bulk sales, while the Irish Independent included 14,500 one-off bulk sales and 6,665 regular bulk sales in its overall circulation figures.

Bulk sales are essentially free giveaways of the paper to the consumer, although third parties who distribute them - for example hotels - normally pay a discounted price to the newspaper group.

The widespread use of this practice prompted Goodbody Stockbrokers to question Independent's figures last week.

Goodbody analyst Mr Neil Clifford said the decline in actively purchased newspapers might have an impact on advertising revenues at Independent. "Readers that actively purchase their newspaper are more valuable to advertisers," he said.

Since then Independent has contacted Goodbodys to contest their analysis.

The broker has since issued a fresh note on Independent, saying it appeared the main reason for the rising bulk sales was because the ABC had altered the way they classified these sales.

However, the comments have been seized on by Associated Newspapers, as part of an increasingly bitter war of words.

Its managing director, Mr John Thompson, said this week it was clear the Independent group was including bulk sales in order to put a more positive slant on its circulation figures.

Mr Thompson and colleagues in Associated this week sent the ad agencies a letter to this effect.

In it they point out that at one point last December, the Sunday Independent had bulk sales of 57,000. The situation has certainly created concern among the agencies.

Mr Liam McDonald of All Ireland Media, the biggest press advertising spenders in the State, said yesterday: "It is clearly of concern, particularly the proportion of bulks and the way they have been increasing in recent times. There is a big difference between the man who puts his hand in his pocket and pays for a paper and the man who is just handed a paper. "Research shows that somebody who pays for a paper has more affinity with that paper."

Mr Richard Law of the agency MediaVest, also raised concerns. "With greater competition in the market for circulation and ad revenue, it is no surprise that titles seem to be adopting a more aggressive stance, either by looking at ways to massage circulations or by pointing the finger at others' circulation practices," he said.

"Some instances of bulking/ lesser rate sales can be perfectly acceptable. For instance, if the Independent offered an incentive to its readers to also buy the Sunday Independent at a reduced subscription price, that is just sound marketing.

"The fact, however, that certain issues of the Sunday Independent seem to have such high levels of bulking, when we all know there is increased competition from titles such as Ireland on Sunday, is something that needs explanation as we will not pay for unwanted circulation," he added.

Asked how agencies treat bulk sales, he said: "Each agency's view is different. My view is that some level of bulking / promotional work is fine, but that this looks too much like artificial propping up of headline figures. It is up to each agency how they deal with it."

However, Independent has strongly defended the use of bulk sales or giveaways. Mr Barry Brennan, group marketing manager at Independent, says there is a lot hype around the issue.

"It is inaccurate to say we have begun pursuing these sales since July. We have been involved in sales programmes to vital reader sectors for many years."

Asked about why the numbers appeared to be rising, he said: "This is simply the first year the ABC has reclassified these figures from discounted papers to regular multiple bulks," he said.

He said the bulk sales went to airlines, hotels, industry and primary and secondary schools. He said they were part of legitimate marketing campaigns to get these groups to sample Independent papers and nothing to do with panicking in the face of new competition.

In a reference that must surely be aimed at Ireland on Sunday, he said: "Indeed, it is worth asking if a consumer who spends one hour on a flight reading the Sunday Independent is more or less valuable to advertisers than a consumer purchasing a newspaper for a free CD."

He strongly rejected the charge that Independent was dumping the titles on the market. "These papers are not dumped, but are actively used in key channels, adding to the strong readerships we achieve."

If you have any media, marketing or advertising news, you can email eoliver@irish-times.ie