Sam: The Dangers of Using Government Advertising to Prop Up Suffering Newspapers

The business of journalists might be journalism and playing a role in democracy and all that, but the main business of most of the newspaper companies that pay them is advertising.

And with so many of their customers (advertisers) shut down or financially crippled in recent months, newspapers in Ireland are hurting. Some have cut staff pay, others jobs. Others have paused publishing indefinitely and furloughed staff, and others still have collapsed into liquidation.

The government has responded to the financial pain of the lockdown with broad programmes that also help newspapers. Salary supports, for example. But there have also been calls for it to bring in newspaper-specific measures.

Among the steps proposed to help these advertising businesses is basically just giving them wads of cash to spend as they please, by buying more ads from them.

This might seem like a simple and direct solution, and it might be well-intentioned. But it risks increasing the government’s influence over what journalists write – and, nearly as importantly, the perception of that influence – which, especially long-term, is a bad thing.

Newspapers Struggling

Many businesses that regularly bought adverts before the lockdown have now simply stopped advertising. Some have closed, while others are conserving cash.

Advertising-funded freesheets have probably been hurt the worst – particularly those that in normal times had been dropped in stacks at restaurants, pubs or supermarkets.

Totally Dublin and the Dublin Gazette simply stopped publishing. Neither has responded to queries about their future plans, and nor has the Dublin freesheet Local News.

The company that publishes the Northside People and Southside People, with 17 staff members, is going into liquidation, RTÉ reported Saturday.

Newspapers that not only sell ads but also charge a cover price, and sell through businesses like grocery stores and corner shops, which are still open, seem to be faring a bit better.

Johnny O’Hanlon, director of Local Ireland, which represents 46 local papers, said his members have lost 50 to 70 percent of their advertising income, and about 15 percent of their circulation revenue (i.e. money from the sales of newspapers).

Overall, they’ve seen their incomes fall roughly 55 to 60 percent, O’Hanlon says. That’s pretty bad, but not as bad as ad-funded freesheets that lost the majority of their advertising income.

Independent News and Media, the Irish Times, the Business Post, and other large media organisations have been hurt too – cutting salaries, and laying off staff.

A lot of workers have lost their jobs, or seen their pay cut, and are suffering. And a lot of readers have lost their papers – temporarily or permanently – or are now depending on papers operating with fewer staff and resources and facing uncertain futures.

Government Ad Aid

In this grim context, the National Union of Journalists (NUJ) has called for a “Government led strategic initiative to rescue the media”.

It wants, among other interventions, “strategic investment in government advertising, including the hyperlocal sector, involving central and local governments and public bodies”.

Look at the programme of government ad-buying in the UK, says Lisa Buckley, a spokesperson for NewsBrands Ireland. “We have written to An Taoiseach to request that our government look at a similar system of support here,” she said.

There seems to be support for this idea beyond the journalists’ union, and the association of national newspapers. It’s already happening, in fact.

The Department of the Taoiseach told the Sunday Times recently that the government was directing advertising to newspapers to support them.

Jack Chambers TD, communications spokesperson for Fianna Fáil, which may form the next government with Fine Gael, says he supports such measures.

“It is vital that advertising spend is used to keep normally viable publications which provide public service journalism alive,” he said, by email recently.

Since the shutdown began, the Department of the Taoiseach and the HSE have been taking out full-page adverts in the weekly newspapers that Local Ireland represents across the country, said O’Hanlon, the group’s director.

Each week, each paper got the same full-page ad or ads, with payments varying depending on what each paper normally charges for an ad of that size, says O’Hanlon. After haggling, that might turn out to be €800–€1,600 per ad, he said.

“It’s a help but in no way does it make up what they’ve lost,” he said.

The Department of the Taoiseach told the Sunday Times that the volume could “potentially grow in size in the coming weeks”.

But the department has not yet responded to a query about exactly how much it might grow. And Chambers has not responded to a query about how much he thinks it should grow.

Dangerous Approach

As the proverb goes, she who pays the piper calls the tune.

In the 18th and 19th centuries in the UK, the government used its ad budget to discipline newspapers, says Roderick Flynn, a lecturer at DCU’s School of Communications.

It was the biggest advertiser, and would funnel its business to papers that supported it.

By some reckonings, the government of Ireland today is one of the biggest advertisers in the country. And with so many others currently out of the market, its importance will only have increased.

Meanwhile, following years and years of decline, many newspapers were already fairly desperate. After this latest blow, many are now fighting for their very survival.

It is clear who holds the power in this relationship.

The 2018 fiasco of the government paying papers to run “good news” stories about its Ireland 2040 national development plan is a (relatively) recent example of how some newspapers are willing to sell their credibility for cash.

Is there a danger that the Irish government today will take advantage of having the power in the relationship and use an expanded ad budget during a crisis to get good news stories about itself, or to pressure newspapers to write what it wants?

O’Hanlon, of Local News Ireland, says this is a valid concern. “In the long-term this is no way to support the industry,” he says.

“If we have this direct drip from the government of advertising there will always be the potential that they could always turn around and say, ‘Don’t publish that or we won’t give you an ad,’” he says.

Compounding this danger is a lack of transparency in the system of distributing government advertising to newspapers.

Opaque System

Although you might think that someone in some single, central government office just rings up the newspaper ad departments and buys adverts, the system is much more complex.

“The Office of Government Procurement offers the Media Planning, Strategy, and Buying Framework to all public service bodies,” says a spokesperson for the Department of Public Expenditure and Reform. “This Framework Agreement was established following a competitive process.”

If a department or other “public sector client” needs some advertising work done, it can essentially hire “framework members” – qualified, approved ad agencies – to do that, in a couple of different ways, the spokesperson said.

The Department of the Taoiseach works with PHD Media, and the HSE has Core Media. These agencies buy advertising across all platforms to meet the department’s and the HSE’s needs.

Neither PHD Media nor Core Media have responded to queries about how exactly this process works, and whether the department or the HSE ask that certain media be included.

However, emails released by the Department of the Taoiseach in response to a request under the Freedom of Information Act in 2018 show how discussions worked in at least one case – the department’s Ireland 2040 ad campaign.

PHD Media managing director Jason Nebenzahl proposed a broad campaign to get the government’s message out, spanning TV, online video, “digital” (including “display”, social and search), national and local radio, and national and local “news press”.

PHD might then go to companies like Independent News Media or Mediaforce to buy packages of advertising across several or all the newspapers these companies represent. In the case of the Covid-19 campaign, the ads for Local Ireland members came through Mediaforce, O’Hanlon said.

However, this is not an arm’s-length process where the department says it wants to reach a certain demographic or region and leaves the details to a media agency like PHD.

In 2018, for the Ireland 2040 campaign, Nebenzahl asked the Department of the Taoiseach what specific newspapers they wanted to advertise in, proposing a list of papers. “Have a look and if you spot any gaps (or unintended regional bias) please let us know,” he wrote.

In this case at least, the department had the opportunity to pick and choose which papers would get the ad money, on whatever criteria it wanted to use – although there’s no evidence of anything untoward of this sort being done in this case.

O’Hanlon of Local Ireland, which he says represents 90 percent of weekly paid-for papers in the country, says he has never heard of one of his member papers being blackballed from getting government advertising because of something it published.

But influence could be subtler than that. It could be papers self-censoring, or shaping their coverage in certain ways, to ensure they don’t get left out, without even being told.

What Then?

I am not arguing that the government shouldn’t try to help newspapers as they fight for their survival, or that newspapers should refuse government aid and die on the altar of purity.

There will always be government advertising. Government departments have the need – and desire – to get their messages out to the public in an unmediated way.

In the case of Covid-19 ad campaigning, the HSE getting public-health messages out to newspaper readers, or the Department of the Taoiseach spreading the word about government supports for businesses, is no bad thing.

Perhaps increasing the amount of government ad spending in the short-term is a reasonable way to get these messages out, and also necessary to keep some newspapers alive through this period.

But the system of doling out advertising money is so opaque at the moment that there’s no way to keep an eye on it to make sure it isn’t being abused for political gain.

There’s no system that shows how ad money is being spent across all government departments, and whether certain papers are getting more, or less, than their peers, says Flynn, the DCU lecturer. “The absence of data creates a risk, because we just don’t know where the money is going.”

To remedy this, Flynn suggests creating a centralised online resource where each government department says where and how they have spent their ad budget.

Even with a more transparent system, though, in the medium and long term, having the government keep newspapers alive by doling out cash to them in this ad-hoc way is not the solution.

If the government wants to support newspapers, Local Ireland, NewsBrands Ireland and the NUJ have a slew of ideas ready to go that do not carry the same dangers that subsidy-by-advertising does.

For example, reducing or eliminating VAT on newspaper sales; reforming defamation laws; or including newspaper publishers in the Department of Communications’ brief, or under a new Department of Arts, Culture and Media.

Other proposals include plans to redistribute money from the tech companies that have in recent years won so much advertising away from news media, back to news media.

The NUJ proposes “A windfall tax of 6 percent on the tech giants … towards funding a News Recovery Plan”. O’Hanlon, of Local Ireland, wants to see the government engage energetically with an EU effort to enforce a copyright law he says would see Google and Facebook paying publishers for using their content.

On a more fundamental level, some proposals would allow for the creation of a new type of newspaper in Ireland, which is not a profit-driven, advertising-based business, but rather a public-interest focused, journalism-based organisation.

For example, the NUJ’s menu of proposals includes: “Confer ‘asset of community value’ status on local newspapers, ensuring that titles are preserved for potential community ownership” and “allow the establishment of charitable status to media outlets that want it”.

It would be great to see organisations like this in Ireland – community-owned non-profits focused primarily on delivering the service of journalism, rather than traditional companies focused primarily on selling the product of advertising.