Sponsor Content Above the Clutter with Pete Krainik
Episode Seven: Man And Machine
Brought to you by: IBM
As President Xi Jinping continues his crusade against corruption in China, we're learning how high the rot reaches into the ranks of the Communist Party. Yet amid the headlines about avaricious officials and unsavory ties between senior party leaders and moneyed interests, stories about the pervasive workaday ethical challenges are often lost. One example of relevance to marketers is the practice of paying for editorial coverage.
The most common form of this practice is the "transportation fee" paid to reporters in return for conducting an on-site interview, or for participating in a press conference. Fees hover around RMB ¥300 (about $50), and are given to the reporter in a red envelope inserted inside a press kit. However, it's worth noting that sums as high as ¥3,000 (approximately $500) are sometimes paid.
Knowledge of these practices within companies varies. For some, these fees are discreetly buried within other payments they make to outside agencies. For others, it's understood to be a "cost of doing business." Justification includes the argument that everyone does it, including multinational brands and big PR agencies; that getting media coverage without it would be impossible; and that Chinese journalists actually need the money because their salaries are so low.
Paying these fees perpetuates many problems. First, "transportation fees" have risen well beyond the actual cost of a taxi, becoming a de facto payment rather than a direct reimbursement. As a result, they have become a gateway into more nefarious practices. For example, entertaining reporters at posh restaurants, plying them with expensive gifts or taking them on junkets to exotic foreign destinations have become acceptable.
From there, it's a small step to paying reporters to write positive stories. At least one multinational with 30 years of successful business in China is known to have paid reporters a bounty of RMB ¥1-2, per word, for positive coverage. You can be certain that once a company reaches this point not one encouraging word will be written without payment.
Second, the prevalence of these practices does not make them ethical. Handing a reporter an envelope filled with cash undermines the independence of Chinese media, slows its rise as a positive force in the reform of Chinese society and undermines its credibility with the public.
Third, these practices will eventually capture the attention of China's senior leadership. When this happens, the companies and agencies slipping cash to reporters will be singled out and penalized. Finally, paying media for coverage erodes the effectiveness of the media itself, and in turn, erodes the value of public relations and advertising.
To end to these practices three things need to happen. First, PR agencies must make clear, and clients must accept, that earned media demands telling stories that journalists find worth telling. Second, we must focus our efforts only on the most credible reporters and outlets that place the value of a good story above that of a red envelope. And third, media outlets must start paying reporters a decent wage and offer appropriate expense reimbursement systems.
As China is a massive society whose continued rise will alter the culture of the world, our near-term expedience offers the potential for damage that extends far beyond its borders. Change will not be easy, as we're working against a deeply entrenched system. However, the greater good demands that we put an end to paying off reporters, and none too soon.