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O'Dwyer's Newsletter - Apr. 16, 2012 - Vol. 45 - No. 16 (download PDF version)

Page 8 Pages 1, 2, 3, 4, 5, 6, 7

A shocked New York Times on April 4 headlined, “In China Press, Best Coverage Cash Can Buy,” expressing dismay that advertising was influencing editorial coverage. It said editorial space was for sale at well-publicized prices not only in Chinese media but in media in other countries.

This “play for pay” story must be paired with the latest stats on newspaper ad/circulation figures.

Ad revenues fell to $20 billion in 2011, a 60-year low and down from $49B as recently as 2006. Revenues were $63.5B in 2000 (adjusted for inflation).

Circulation declined from 62 million daily in the mid-1990s to 45 million. The result is a tidal wave of newspaper closings, shrinkage and staff cuts. Journalists fell from 56,900 in 1990 to 41,600 in 2011. The PR population, meanwhile, went from about 100,000 in 1980 to 270,000 currently.

More than 700 magazines a year folded from 200709 or more than double the number launched according to

No doubt the same thing is happening in China and other countries. Companies that don’t advertise nor buy any subscriptions to publications and/or broadcast media are showing up with pieces that are ill-disguised ads. Marketing’s view of PR is that it is “free advertising.”

Media in China and elsewhere know a bad business deal when they see one. They do not like getting stiffed by PR firms that are well paid to place stories for clients that are far more effective than paid ads. The “Macy’s 10-1 rule” is all too true—one inch of editorial = ten inches of ads.

A Better Solution Is Buy Website Licenses

Failure to say that editorial matter has been paid for compromises the media involved. “Paid advertisement” should be put somewhere even if it’s in small type.

But media need to find new sources of revenue because ads and circulation have dried up. Recent generations mostly stopped reading newspapers and rarely subscribe to anything. Companies have to take up the slack.

Robert McChesney and John Nichols in “The Death and Life of American Journalism” in 2010 proposed government-funded press as the solution. That idea did not go too far.

We have a better idea. Media can reasonably ask if the PR firm and its clients are subscribers. The unkindest cut of all for newspeople is to be asked to run a story and then send a tear sheet to the PR person.

Companies cannot be expected to buy thousands of copies of a medium but they can pay substantial fees for website licenses. Surely they want their employees to read any story! Would that influence coverage? Not if a medium had lots of such contracts. Whereas purchase of ads next to or near a story implies a quid pro quo, purchase of web access is a private transaction.

Marketers must stop thinking of PR as free advertising. Media must get paid one way or another if they are to survive.

— Jack O’Dwyer

"60 Minutes" correspondent Mike Wallace, who died April 7 at the age of 93, was a gift to the PR business.

I remember attending countless crisis management workshops and seminars during the early 1990s that promoted themselves as events loaded with insider information about “What to do when Mike Wallace knocks on the door.”

Mike Wallace
Image: CBS News

The sponsors of those sessions made money, but the audience was always short-changed. When one-man truth squad Wallace showed up, the jig was up. The PR workshop/seminar takeaways were either to keep your corporate nose clean or door closed when Mike came a-calling.

The no-frills newsman was also a goldmine for PR firms. They earned millions in fees pitching the fear of Wallace to skittish clients.

CBS ultimately phased-out the “ambush journalism” that was so perfected by Wallace. Executive producer Don Hewitt decided that ambushes were nothing more than “showbiz baloney.” He told Mike to “retire your trench coat.” An era passed.

In today’s 24/7 electronic communications environment, 60 Minutes has lost some of the power that it had as the only game in town.

Though CBS has ditched ambush journalism, the hypothetical question, “What do you do when Steve Kroft knocks on the door?” just doesn't have PR people running for the exits.

Kroft is good. Wallace was one-of-a-kind.

In last night's 60 Minutes tribute, Kroft remembered Wallace as the program’s “most public face,” “a true giant of television” and a correspondent with a “reporting style and interviewing technique” that influenced generations of journalists.

Morley Safer, who knew Wallace longer than anybody else on the show, called him a “restless man always chasing the next story.”

Wallace is now at rest.

Former Microsoft CEO Bill Gates is the only business representative on Burson-Marsteller’s study of Twitter’s ten most powerful political influencers.

That’s a signal of Corporate America’s retreat from the public discourse.

It’s unclear whether Gates’ clout comes from his reputation at Microsoft or from the good deeds of the Bill and Melinda Gates Foundation.

Barack Obama, Mitt Romney, Michael Bloomberg, Nancy Pelosi and five media players (Fox’s Bret Baier, CNN's Anderson Cooper, MSNBC/NBC's Chuck Todd and Washington Post’s Ezra Klein and Chris Cillizza) round out the list.

— Kevin McCauley

Page 8 Pages 1, 2, 3, 4, 5, 6, 7


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