Advertising Controlling Editorial

- - Ethics

A scene that’s all too familiar in the world of magazines went down on the TechCrunch blog a couple days ago (here):

In an email to our sales team, the agency said:

“We found this on your site today, obviously not a good thing for AMEX or for ZYNC branding.

“Are you able to take this down from your site? If so, please do as ASAP.”

“If you are not able to monitor this more closely, we unfortunately will not be able to run with TechCrunch in the future.”


Unfortunately, this kind of thing has been happening for a long time now and this sad state of journalism can be summed up by this transcript from a talk that future-of-journalism guru Clay Shirky gave at the Shorenstein Center on the Press, Politics and Public Policy

I think the first thing to recognize about the commercial structures of the newspaper industry is that it is not enough for newspapers to run at a profit to reverse the current threat and change. If next year they all started throwing off 30 percent free cash flow again, that would not yet reverse the change, because there were other characteristics of the commercial environment as well.

The first of them was that advertisers were forced to overpay for the services they received, because there weren’t many alternatives for reaching people with display ads — or especially things like coupons. And because they overpaid, the newspapers essentially had the kind of speculative investment capital to do long-range, high-risk work. So it isn’t enough to be commercial; you have to be commercial at a level above what some theoretical market would bare.

My friend Bob Spinrad — who recently passed away, but who ran Xerox PARC, the Palo Alto Research Center, for a while — said, “The only institutions that do R&D are either institutions that are monopolies or wrongly believe that they are.” Xerox is an example of an institution that wrongly believed it was a monopoly and was willing to fund the invention of Ethernet and laptops and the graphic user interface and all the rest of it that we take for granted now. IBM, AT&T — the list of commercial entities that believed that they were monopolies, and during the time that they were monopolies could take this philosophy of overinvesting in speculative work is large. But when the commercial inputs to that kind of R&D work, the R&D work ends as well.

The second characteristic of the happy state of the 20th-century newspapering was that the advertisers were not only overcharged, they were underserved. Not only did they have to deliver more money to the newspapers than they would have wanted, they didn’t even get to say: “And don’t report on my industry, please.” There was a time when Ford went to The New York Times during the rollover stories and said, “You know, if you keep going on this, we may just pull all Ford ads in The New York Times.” To which the Times said, “Okay.” And the ability to do that — to say essentially to the advertiser, “Where else are you going to go?” — was a big part of what kept newspapers from suffering from commercial capture. It worked better for bigger papers than smaller papers, but that bulwark of guest commercial capture was a feature of the 20th century commercial market. Neither of those, neither the overpaying or the underserving, is true in the current market any longer, because media is now created by demand rather than supply — which is to say the next web page is printed when someone wants it to be printed, not printed and stored in a warehouse in advance if someone who may want it. Turned out that when you have an advertising market that balances supply and demand efficiently, the price plummets. And so for a long time, people could say analog dollars to digital dimes as if — well, when do we get the digital dimes? The answer may be never. The answer may be that we are seeing advertising priced at its real value for the first time in history, and that value is a tiny fraction of what we had gotten used to.

Full story and transcript is (here).

There Are 7 Comments On This Article.

  1. Nice line at the end:

    “The answer may be that we are seeing advertising priced at its real value for the first time in history, and that value is a tiny fraction of what we had gotten used to.”

    I think we’re also seeing many companies move their marketing dollars in house under the assumption that they can execute their own marketing campaigns for “dimes” compared to media’s “dollars.”

    But what they quickly find out is how much internal effort (and dollars) it takes to manage those campaigns. Social media and new media don’t work on a quarterly campaign basis–they need daily maintenance and ROI measured in many months, sometimes years. Problem is, few marketing departments are set up to work this way–or want to work this way. They have quarterly goals they have to meet or they lose their jobs.

  2. Hang on a second here.

    Under the rally cry of editorial free license, Arrington is merely calling out a brand for their “paleolithic” lack of marketing savvy. The agency didn’t realize how much his post was meant to “put the brand squarely in the center of things… Who doesn’t get how great that is for Amex?”

    If Arrington’s point was to kiss that much Amex ass, why doesn’t he just do what they say?

    Nothing wrong with all this of course if advertorial is your business, but if we are going to have a discussion about editorial license and the pressure of “commercial capture” surely we can find a more relevant example.

    The “sad state of journalism” is not because of threats from advertisers. It is a gradual weakening of real content by pseudo-journalists who basically have the same “agenda” as their advertisers.

  3. Wasn’t it Henry Luce who said that the first priority for a magazine was “to stay in business”?

    After that, it’s not whether to make a pact with the devil, it’s just a case of deciding what’s a fair price to pay the Prince of Darkness.

  4. You know – I’m sure those who are able to actually manage the concepts behind the buzzwords (viral, social marketing) etc will still be able to make a hefty living, but those people are very rare at this point. There’s a lot more hamfisted misuse still at this point.

    But generally… the whole advertising industry just won’t be as glamorous as it used to be. Including photographers, of course, but also graphic designers, copywriters, etc.

    And I think that’s as it should be. It is essential to get the word out about your product or service, of course, but advertising isn’t the only solution and its dominance almost seems like a fluke.

  5. the reason for reading papers and mags is the credibility. when i worked at a newspaper we called fluff pieces that tailored to advertisers “blow jobs”
    and… thats why i dont work there any more. loose your credibility and loose your readership. people will catch on.

    It certainly is a catch 22 of the industry but mags like the economist might be the future