Grocery story shelf space and media space are being sold to the highest bidders. It's a shocking statement but there's a lot of truth to it. PR people must be aware of such market forces in order to cope with the PR fallout.

supermarketMoney talks and ethics walks might be another way of saying this. PR traditionally has had a higher believability quotient than ads but that may be under erosion.

A spotlight was put on the practice of supermarkets charging for shelf space when PR Society of America chair Kathy Barbour joined Acosta Sales and Marketing in January.

Acosta, a private company based in Jacksonville, Fla., with $1.5 billion in sales and 30,000 employees and "associates," plays a leading role in negotiating such deals with stores.

Suppliers, including many of America's most famous brands, pay to get their new products on shelves, keep current products there, put products at eye-level, put them next to other famous brands, limit the shelf space of rivals, and obtain end-of-aisle displays (very expensive), among other tactics. Slotting fees add to the cost of products being sold.

Look-Alike Editorial Space Being Sold

Some media, including the New York Times, are selling ads that closely resemble editorial matter. Such copy can be so newsy and informative that readers don't care whether it's paid for or not.

That observation was made by Arik Hanson of Communications Connections who said two "paid posts" on NYT's "T Brand Studio" were outstanding — "Grit and Grace," an article on ballet placed by Cole Haan, and "Women Inmates: Why the Male Model Doesn't Work," by Netflix.

Hanson said a study that found that T Brand stories pulled 361% more unique visitors and 526% more time spent with the post than regular ads.

t brand studioWe don't doubt that riveting copy can be posted by sponsors. The question becomes whether the medium involved is not covering something or covering it only slightly because it might annoy the advertiser?

Readers can check other media for desired coverage but their confidence in the first media may suffer.

Slotting Fees a Highly Charged Topic

Slotting fees are such a hot button topic that witnesses at a Senate hearing wore hoods to conceal their identities, the Los Angeles Times reported Jan. 29, 2000.

LAT said there had been a "dramatic escalation" in such fees and estimated suppliers pay $9 billion yearly for them, quoting analysts as saying the payments make up more than half of supermarkets' profits. It noted that mergers had concentrated supermarket power in a few hands.

"Like Hollywood accounting, the economics of slotting and grocery story pricing are shrouded in mystery, fueling the debate on the system's ultimate effect on consumers," wrote LAT reporters Robin Fields and Melinda Fulmer.

Barbour and Karen Bennett Mathis, PR manager of Acosta, have not returned emails seeking information about the company, its employees and "associates," and its tactics to win shelf space for clients.

FTC Dropped Topic After 2003 Study

The Federal Trade Commission published a study in 2003 that estimated from $1.5 million to $2 million in slotting fees would be needed to introduce a new product nationwide. No follow-up study has been done by FTC.

Motley Fool, referring to the study Aug. 26, 2013, said nationwide rollouts could now cost as much as $2.5M. Reporter Brian Stoffel noted the FTC study found that 80%-90% of food companies surveyed paid slotting fees. Tracking the fees is hard, he said, because the activity "usually takes place off the books."The Motley article on slotting was titled, "The Hidden Profit Machine for Grocery Stores."

Shelf placement activities of Acosta are described in detail in a 2,580-word article in the Jacksonville Daily Record by editor Karen Brune Mathis on July 23, 2012 (although slotting charges were not mentioned), and in copy on the Acosta website.

Acosta Reps in Stores Daily

"Acosta's 17,000 retail associates are in stores every day, allowing the company to deliver faster speed-to-shelf for new items, correct out-of-stocks and voids more quickly, and gain greater distribution of existing products," says copy.

Acosta created "Space Management Solutions" which help "optimize our clients' shopping management strategies."

It includes "strategic planogram development, which ensures our clients' brands are positioned on the right shelf, adjacent to the right products, with sufficient space to prevent out-of-stocks in all stores."

A planogram is a visual representation of a store's products and services.

NYT reported April 7 that many of the large companies that are being squeezed by stores are in turn squeezing their suppliers by making them wait up to 120 days to get paid. Procter & Gamble and Heinz are among the companies named.

BI Intelligence and the Interactive Ad Bureau say such ads will reach $21 billion by 2018, a 400% gain from 2013.

Hanson says the "trust" that readers have in NYT editorial content is what is driving popularity of its branded content.

"If you have a big product launch coming up, a story in NYT would go an awful long ways," he noted. If you hire T Brand Studios, it "actually could be guaranteed." The price might be lower than any PR firm would charge, says Hanson. His essay was titled, "Will native advertising eventually be PR's demise?"

Slotting Fees Are Unethical, Say Some

Biz-Shifts Trends, in a May 18, 2014 posting, says "Some experts argue that slotting fees are unethical since they create a barrier to entry for small businesses that don't have the cash flow to compete with large companies."

Marianne M. Jennings, emeritus professor of legal and ethical studies in business, Arizona State University, says the practice is "sort of under the table and sort of not, but it seems to be growing." She is the author of the textbook, Case Studies in Business Ethics, now in its eighth edition.

Slotting fees have become increasingly important and common in many retail sectors such as supermarkets, drug stores, bookstores and music stores, says Biz-Shift Trends. No matter how much effort goes into product design, promotion, etc., "as much as 80% of all purchase decisions in some categories are made at the point of sale," it adds.

"Some industry experts say that these allowances raise consumer prices…more important, small vendors are being crushed by the practice," it adds. The practice is highly secretive and is generating from $6 billion to $18 billion a year, it estimates.

NYT Skips Some Topics

While there is nothing wrong with news media running ads that look like stories, as long as they are so identified, the question that is begged, is what stories are being avoided?

With NYT, several topics come to mind.

It currently has a blackout on the battle over eruvim in the Hamptons. It has cost Southampton, Westhampton Beach, Quogue and Jewish People Opposed to the Eruv more than $1 million in legal fees after four years of pre-trial skirmishing. Last NYT article on this was Feb. 4, 2013.

Former Johnson & Johnson employee Scott Bartz in 2012 authored The Tylenol Mafia, a 485-page book claiming that the poisonings of Tylenols that cost seven lives in 1982 took place while the product was still in the distribution chain and not at the store-level as claimed.

In any case, Tylenols in easily-spiked capsules should not have been sold again after the murders but they were, resulting in the death of 23-year-old Diane Elsroth of Peekskill, N.Y., on Feb. 17, 1986. NYT has been steadfast in its praise of J&J/Tylenol including a nearly three-page story Aug. 22, 2010 by Peter Goodman that said "Exhibit A in the lesson book on forthright crisis management is the mass recall of Tylenol in 1982 after the deaths of seven people…"

NYT's Natasha Singer wrote May 3, 2013 that "J&J is considered a model for the consumer products industry for its fast and adept handling of the Tylenol scare in 1982…"

Scant NYT Coverage Given to Wittels Case

Garrett Wittels, 20-year-old Florida Int'l University baseball player who owned a 56-game hitting streak in 2011, was hit with rape charges resulting from an incident that took place at the Atlantis resort, Bahamas, on Dec. 20, 2010.

The charges and the hitting streak garnered extensive coverage in the Miami Herald, MSN, AP, fox.sports.com and the FIU student website, among other media. The Broward/Palm Beach New Times headlined: "Deeply religious Jewish baseball star arrested on rape charges."

Although NYT had carried tens of thousands of words when three Duke University lacrosse players were hit with rape charges in 2006, it only ran two brief AP items on the Wittels charges. They were dismissed June 16, 2011 when Bahamian officials decided the father of one of the two women involved was trying to extort money from Atlantis.

The Duke and Wittels cases never got to a jury. The Duke charges were dismissed by North Carolina Attorney General Roy Cooper.

Duke grad William Cohan in 2014 authored The Price of Silence in which he claims that justice in the Duke case was "turned on his head" by the campus culture, a voracious media and the issues of sex and race. He interviewed Crystal Mangum, victim of the alleged rape, who is serving a 14-18 year prison term on charges that she murdered her boyfriend. Mangum, whom he found to be "quite poised, quite intelligent, quite articulate and quite clear thinking,"
repeated charges that she was attacked. Cosmopolitan interviewed Cohan April 2, 2014, headlining it, "How the Duke Lacrosse Case Spun Out of Control."