The top circulation executive at Gruner + Jahr USA stepped down yesterday, as the company moves to quell outrage on Madison Avenue over inflated circulation numbers.
The resignation of Diane Potter, senior vice president of consumer marketing, was the first indication of fallout from the company’s lawsuit against Rosie O’Donnell over Rosie magazine.
The judge in the case indicated he would not award damages to the ex-talk show host or the company, but the case did shine light on the company’s questionable circulation practices regarding Rosie.
The company conceded that most half-yearly circulation numbers are only estimates.
During the trial, execs admitted the company deliberately overstated the Rosie estimates, which turned out to be far higher than the actual circulation figures as revealed in an ABC audit later on.
Many ad agency executives were angry when the practice came to light.
Potter could not be reached for comment, but G+J’s embattled CEO, Daniel Brewster, issued a statement, saying, “Diane did this because she believes it is in the best interest of the company.”
Potter was the second major executive to leave the company in two days. On Thursday, Child Publisher Kate Kelly Smith told staffers she was leaving to become publisher of Rodale’s Prevention.
No replacement had been named for Kelly Smith at press time.
In yesterday’s memo, Brewster said, “The scrutiny to which we were subjected revealed that in several instances our company overestimated its newsstand sales in 2002.
He vowed, “Overestimates were discontinued, will not affect 2003 and will not recur in the future.”
Brewster has also moved to speed the audits done by ABC from annual to every six months.