e have completed our financial review of 2002 and the results of our readership survey are back, and both tell us that it was a record year for The Green Sheet. I wish to thank everyone who took the time to mail back your ideas or to answer our questions online. This feedback each year helps us continue to bring you the content you need and make the changes you suggest.

Just as your business has had to adjust to the current economy, so has The Green Sheet. We all know that the U.S. economy is in the doldrums; what you may not know is that one of the harder-hit segments of this downturn has been magazine publishing. Ad sales are down dramatically, subscription sales have plummeted, long-established titles have folded and magazine launches are few, with new mastheads disappearing after a few issues. However, we have bucked the trend at The Green Sheet so far.

Our mission is to provide payment-processing sales professionals with the information, education and inspiration you need to create wealth, for yourselves and the businesses you serve. With that in mind, our success as a "magazine publisher" is in truth the report you have issued on how well we have carried out that mission.

What the Report Tells Us

From January 1 through December 31, 2002, our print-publication subscription numbers increased 11%. The Green Sheet Online has had an even more robust growth year. At the end of 2002 our Web site traffic had doubled over the previous year. Whether you count hits, visits or pages downloaded, our online statistics show a 200% increase from January 2002 to January 2003. We now average 1.5 million hits per month to www.greensheet.com. That's 50,000 hits per day. In short, we have the highest readership of anyone in the industry at about 40,000 monthly readers, and it is audited for both paper and electronic formats.

While The Green Sheet began its life as a newsletter, at its current size and content it has admittedly become a magazine.

The Green Sheet's quarterly four-color magazine "GSQ" has the entire industry as a target. With the ability to be more comprehensive in the material and focus on a single topic, the GSQ has found a niche of its own in the payment arena.

The Green Sheet, published twice a month, has continues to be true to the independent sales agent as its only target. While the Green Sheet continues to have broad readership outside the sales bull's-eye, the focus on what salespeople are thinking and reading drives interest beyond the target audience.

The debate over how many salespeople there are in the market continues. Perhaps the registration of individual sales representatives with the newly founded sales union, National Association of Payment Professionals (NAPP), eventually will solve the puzzle.

Even though I know that some in the industry put the sales representative number as high as 25,000 or more, I see the questions much differently because I have been looking at our readership and our database for nearly 20 years. In fact, I see the ETA meetings as an excellent barometer to the industry's size as a whole. At each ETA meeting, it is clear that the number of acquirer, bank, leasing company, check company, equipment manufacturer, etc. employees, outnumber the sales individuals by a significant margin.

I further see that regardless of whether you believe the number of sales professionals in the industry is large or small, everyone must agree that the marketplace grows and shrinks daily. The number of people who come to work briefly in the industry has helped exaggerate the totals over time, and while many of these individuals continue to receive mailings from the industry (very few cancel), they are essentially inactive.

Terminology also has been an obstacle in trying to get to the actual numbers. I believe the number of ISOs is between 9,000 and 10,000, which may represent an individual salesperson or a number of individuals working collectively.

Our original term "ISO," by which we mean Independent Sales Organization or Agent, has continued to be our measuring stick. This number is large as it compares to those who are members of the ETA or who have registered with Visa or MasterCard, but it is small when compared to the number of people who have ever worked in the industry. It also is enlarged by the number of employee salespeople in organizations such as TeleCheck or FDR.

The truly important question in my mind is not how many sales professionals there are, but whether they are being reached. From an industry advertiser's perspective, there are only about 1,800 ISO "buyers/decision-makers" in the industry, and reaching beyond it provides no additional sales opportunity. Whether you count unregistered organizations (individuals), as we do, at about 9,500 or as Visa does, at about 1,000, or the number of salespersons at about 25,000, very few make the buying decisions.

Are there many, many more individuals working in the industry? Of course, and they increase the attendance at industry events and readership of many publications, but they are not the individuals or organizations that an advertiser is looking to reach.

We think that the advertisers in The Green Sheet understand these important points and have continued to place their advertising dollars in the place that it has a return - The Green Sheet. This in turn has allowed us to grow its support for the sales professional, bring you an ever increasing amount of free content and services.

Advertising in The Green Sheet grew by 52% last year! Perhaps you've noticed the larger page count. The advertising support for our publications enables us to provide our services to sales professionals at no cost. This increased revenue has enabled us to broaden our industry coverage, deepen our editorial staff and enhance our Web site presence.

Of course, one of our management assumptions is that increased ad sales DEMANDS increased editorial copy (more ADS = more WORDS). Participants in the online ISO Forum and Letters to the Editor consistently have referred to our publications as "the Bible" and the "Holy Grail" of the industry. We really appreciate the accolades. We strive to be your portal to the payment-processing information you need. Our advertisers come to us to build their sales channel through you!

2002 Reader Survey

We received a wonderful response from our subscriber base to our annual survey, enabling us to report a statistically valid response that is representative of our subscribers as a whole. The data has been combined for the paper and online readership. (Totals may not equal 100% because of individual non-response or multiple responses.)

Who reads The Green Sheet?

We asked readers to identify what type of company they work for:

• ISO/MSP (Sales Organizations and/or Agents) 74%
• Bankcard Acquirer/Processor 7%
• Equipment Manufacturer/VAR 2%
• Other 11%

Within these companies our readers fulfill the following positions:

• Professional--56%
• Executive Management--47%
• Sales/Account Executive--33%
• Middle Management--5%
• Other*--11%
  * Many independent salespersons checked this category

As we celebrate our 20th anniversary in 2003, we can see the results of managing our subscription database over our extensive tenure. We have succeeded in reaching the "feet on the street" in an unprecedented way.

Readers Rate the Articles

Ongoing feedback from our readership has been imperative to our growth as a publishing company. Each issue of The Green Sheet consists of a vital mix of industry news, feature stories, sales advice and inspiration, new product information and company or individual profiles. In 2001 we began our occasional pieces profiling specific Industry Leaders who have made a significant impact within the payment-processing arena, and your survey responses told us that you enjoyed these features.

We asked you to rate each of these departments within our publication from 1 through 5, with 1 being "uninteresting/of no use," 3 being "moderately interesting/moderately useful" and 5 being "very interesting/very useful." We are very pleased with the report card you issued.

Feature Stories (e.g., "This Isn't Your Grandfather's Payment Industry," issue 02:12:01)

• Very Interesting - Useful--74%
• Moderately Interesting - Useful--29%
• Uninteresting - Not useful--1%

Company Profiles (e.g., "WebTransact," issue 02:11:02)

• Very Interesting - Useful--72%
• Moderately Interesting - Useful--24%
• Uninteresting - Not useful--4%

New Products (e.g., "Check Imaging da Italia," issue 02:12:01)

• Very Interesting - Useful--79%
• Moderately Interesting - Useful--20%
• Uninteresting - Not useful--1%

Industry News (e.g., "First Data Countersues Visa," issue 02:11:02)

• Very Interesting - Useful--83%
• Moderately Interesting - Useful--16%
• Uninteresting - Not useful--1%

Inspiration (e.g., "Excelling with E-mails," issue 02:11:02)

• Very Interesting - Useful--53%
• Moderately Interesting - Useful--41%
• Uninteresting - Not useful--6%

Industry Leaders (e.g., "George Wallner, Hail to the Chief," issue 02:10:02)

• Very Interesting - Useful--64%
• Moderately Interesting - Useful--32%
• Uninteresting - Not useful--5%

Many of our readers took the time to tell us which article published during the year stood out as their "favorite." More than 20% chose the FTC vs. CMS coverage. Many of the respondents told us that every issue was a gem.

We are looking for a number of ways to continue to strengthen our writing. Our editorial staff - Rick Vacek, Patti Murphy, Juliette Campeau and Karen Converse - is exploring ways to expand the depth and breadth of our reporting through:

• Conducting third-party interviews for company and product profiles
• Researching emerging market opportunities
• Improved analytical techniques.

We want to encourage all of our readers to tell us what you need to know. Send us your industry-related questions, story ideas and company and product referrals to greensheet@greensheet.com. Of course, Letters to the Editor are always appreciated to paul@greensheet.com.

Response to Advertising

In order to continue our mission of supporting the payment-processing sales professionals, we sell an abundance of advertising opportunities. In print and online we offer classified and display advertising to companies wanting to increase their sales through the IC channel. Our success is a direct measure of how strongly you respond to these offers .

• Responded to 5 or more ads--30%
• Responded to less than 5 ads--47%
• Have not responded--24%

An overwhelming majority (77%) of our readership has responded to companies advertising with us. We consistently have received one major complaint from these readers: "No one returns my call." We are working with our advertisers to ensure that they are ready to rapidly increase their enterprise.

Our media-placement specialists work with our clients to put the infrastructure in place to support the independent sales force.

Room for Improvement

No readership survey would be complete without a response to areas in which we have done a less than stellar job. We strive for an error-free publication; our managing editor has a zero-tolerance policy for typos. All that said, we sometimes goof.

We wish to extend our apology to those of you whose name appeared incorrectly or whose product information was misidentified.

Some of you have complained about the font size and paper color of our publication, and we are taking your comments under advisement.

You did respond to our brief, pithy survey much more rapidly than in years past. We will continue to enclose brief questionnaires in print and online in order to gauge your ongoing response to our efforts.

Look for new products and services in the coming months as we celebrate our 20th year. Thank you for your continued support of The Green Sheet.

We're doing another survey online. Cast your vote by April 30, 2003 for the Best Payment Processing Players - just go to www.greensheet.com.