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PRWeek/MS&L Survey Finds Pay-For-Play Editorial Is on the Rise

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NEW YORK (AdAge.com) -- Mark Hass, CEO of the Publicis Groupe-owned public-relations agency Manning Selvage & Lee, had a rather alarming conversation last month with a "very senior" media planner from an agency outside of his parent holding company.
Mark Hass, CEO of Manning Selvage & Lee
Mark Hass, CEO of Manning Selvage & Lee

"I just don't understand what you guys [in the PR industry] do at the end of the day, because if I need a story for one of my clients, all I need to do is ask [a publisher or ad rep] and I get it," Mr. Hass recalled the agency executive saying to him.

A recent survey shows that that agency executive isn't alone. The sixth-annual PRWeek Marketing Management Survey, sponsored by MS&L, found that 19% of the 252 chief marketing officers and marketing directors surveyed said their organizations had bought advertising in return for a news story. That represents one in five senior marketers and is up from 17% last year.

"I'm not saying it's a huge problem," Mr. Hass said. "But 19% of senior marketers saying they do it constitutes a problem."

That's particularly true in this age of transparency. "One type of coverage you buy and the other you achieve through persuasive argument, making it a credible source of information and not something that has to be taken with a grain of salt," Mr. Hass said. "There needs to be credible, independent media, and the marketing industry should not be doing anything to undermine credible editorial quality."

Cautionary tales
The backlash that arises from any sort of underhanded scheming can and will spread like wildfire in the digital age. Just ask Wal-Mart and Whole Foods. Wal-Mart was called out for running a pro-Wal-Mart fake blog, and Whole Foods CEO John Mackey was caught posting favorable comments, under a pseudonym, about his company and its financial results in chat rooms.

The study reveals that the online world is viewed as a place where marketers can ignore ethical guidelines, and it's that finding that Mr. Hass said he finds most perturbing. More than half (53%) said the marketing industry as a whole is not following ethical guidelines in the new-media realm, more than said so a year ago.

"It's almost like there's a different standard for online activity, and that's a little worrisome because that's the growth area," Mr. Hass said. "That's something the industry needs to be attentive to, because the reputational damage that can occur if a marketer is dishonest online is huge."

This year's study also found that 8% of respondents, up from 5% in 2007, said their organizations paid or provided a gift of value to an editor or producer to place a news story about the company or one of its products. And 10% said their organizations have at one time or another had an "implicit/non-verbal agreement with a reporter or editor that you expect to see favorable coverage of your product or company in exchange for advertising."

Thomas Huang, ethics and diversity fellow at the Poynter Institute and editor at The Dallas Morning News, said he finds these numbers incredibly troubling.

Too cozy
"If these numbers are true, it indicates that the relationship between marketers and journalists is getting cozier and cozier," he said. "And this could end up damaging the credibility of mainstream news media."

Mr. Huang said he has received pitches for stories including the disclaimer that the subject being pitched had purchased advertising space in the paper. "I get some of that, and I'm clear about the line that we draw," he said. "In general, newspaper editors are talking more with their ad departments about ideas for new sections that can attract advertising. And sometimes the ad department will come back to an editor and say, 'We have a company interested,' but at that point the editor needs to make clear there will be no trading of ads for coverage going on."

Mr. Huang said he believes the declining economic situation in the publishing industry could lead editors to make decisions they normally wouldn't. "There's incredible financial pressure on news organizations to create revenue," he said. "So there may be the temptation to work with marketers and advertisers to trade news stories for advertising."
Whole Foods CEO John Mackey
Whole Foods CEO John Mackey

That a significant number of C-level marketers are willing to partake in a pay-for-play model reveals that the concept and value of PR is still very foreign to them, a problem Mr. Hass lays at the feet of his own industry. "I always thought the PR industry did a poor job of explaining what it does to its advertising and media colleagues," he said.

As for the conversation between Mr. Hass and that media planner, Mr. Hass said he was unable to get a concession that he was right but felt he managed to create an aha moment for the executive.

"I could see the scales falling from his eyes about the disproportionate value that's created when public relations 'earns' coverage by working with a journalist," Mr. Hass said, "compared to what he could get with a check."
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