The buyer’s market
The buyer’s market – not a reference to the housing climate, but instead a reference to the commercial relationships between advertising sellers and buyers, which have come under the spotlight significantly over the past couple of weeks. The Daily Telegraph’s reporting of HSBC’s alleged tax evasion scheme from its Swiss banking arm, or rather lack of reporting, has shaken up the media industry and forced questions to be asked as to the complex relationships between the role of advertising and editorial and the business and moral strategies of both departments. In the case of the Daily Telegraph, editorial compromises on the reporting of HSBC’s tax affairs appear to have been made in order to protect the high figure advertising partnership between the newspaper and HSBC, one of the largest banking and financial services in the world.
Peter Oborne, ex chief political commentator of the Daily Telegraph, who announced his resignation on a blog on the 17th February this year, describes the role of a newspaper, as taking a ‘constitutional duty to tell their readers the truth’, and there lies a sea of grey wash – ‘the truth’. Turning a blind eye to banking allegations to appease advertisers arguably doesn’t challenge ‘the truth’, but it does challenge a fundamental moral quandary between what is right and wrong.
With the cover price of a newspaper never covering the cost of producing a newspaper, revenue has to be secured in other ways, and here plays the role of advertising. Media houses, whether national newspapers, consumer magazines or the trade press are under increasing pressure to drive revenue through advertising and the spend figures don’t look pretty. Figures from Group M suggest that advertising within the newspaper sector has nearly halved since 2007 from £1.6 billion to £900 million, with funding being re-invested into other forms of advertising, namely the emergence of native solutions.
As we make our journey through this evolving advertising model, the blur between making money and delivering unbiased editorial is becoming cloudy. On the 21st January 2009, whilst all national newspapers focussed their front page headlines on the inauguration of Barrack Obama as the first black president of America, the Daily Express ran the first ever cover wrap for any paid national newspaper, a deal which is said to have cost car manufacturer, Fiat, £150,000. In doing so, the newspaper made a decision to turn their backs on what was undoubtedly one of the biggest political and social stories of the century, to favour financial gain from an advertiser.
Media buyers have the flexibility to chop, change and pull ads as they see fit, a tactic which was rife with the major supermarkets during the Horsegate scandal. This flexibility plays favourably in not only commercial decisions, but also when handling sensitive headlines. The placement of a British Airways advert against news of a major air disaster would not sit comfortably on page and so whether for commercial, moral, or purely commonsensical motives, the power of what content appears and when, appears to be weighted towards the buyer’s market. With buyers appearing to have a significant advantage over sellers, and allegedly having the ability to dictate what stories should or should not appear in a newspaper, newspapers are at serious risk of losing public trust. As Peter Obourne commented during his resignation letter – “If major newspapers allow corporations to influence their content for fear of losing advertising revenue, democracy itself is in peril.”
As PR practitioners, we understand the increasingly complex role of advertising and the continued evolution to native solutions. Whilst the boundaries between editorial and advertising are perhaps becoming unclear to the consumer, the opportunity to leverage this and build brand trust and engagement with quality and targeted content is becoming an increasingly popular and savvy approach.
Alexa Hopkins – Account Director