The Solomon Scandals A Washington newspaper novel by David Rothman

Ad biz’s Gordon Gekko sees lines blurring between news and ads—and WANTS news biz to shrink

Sy Solomon the imag­i­nary real estate tycoon is pals with the imag­i­nary George McWilliams, exec­u­tive edi­tor of the imag­i­nary Wash­ing­ton Telegram. Along the way, Sy is also one of the Telegram’s biggest adver­tis­ers. But at the very least the news­pa­per in The Solomon Scan­dals cares about the appear­ance of a wall between the edi­to­r­ial and busi­ness sides—the old church-state routine.

In the future, the Telegram actu­ally could look like a paragon of purity. Mar­tin Sor­rell, the British CEO of the U.K.-based WPP Group, per­haps the biggest advertising-related hold­ing com­pany, pre­dicts that ad agen­cies will be get­ting “very much more involved” in con­tent devel­op­ment. He also says, accord­ing to Adver­tis­ing Age, that “the lines between adver­tis­ing and edi­to­r­ial are going to get much more blurred over time whether we like it or not.” This isn’t the­o­ret­i­cal if you extrap­o­late from his company’s past behav­ior and his cur­rent think­ing. “We do, in one mar­ket in Spain, have a minor­ity inter­est in one of the tele­vi­sion chan­nels, and the model is a very inter­est­ing model.”

Might the news-ad blur­ring be Sorrell’s wish regard­less of the “whether”? I sus­pect so. Ad Age says he “not only thinks that con­trac­tion of the news­pa­per and mag­a­zine indus­try will con­tinue, but that it NEEDS to con­tinue.” And, I sus­pect, with fewer pub­li­ca­tions of major import, the sur­vivors just may get away with more sleaze, more blurs with­out as many rivals to sound the alarm. How­ever Sor­rell feels, you can see and hear him in action via an Ad Age video reach­able through the just-given link. Tellingly per­haps, Sor­rell recently got him­self eli­gi­ble for up to $100M in bonuses within the next five years. Way to go, Sir Mar­tin.

Is Sor­rell the Gor­don Gekko of adver­tis­ing, the truth sayer with the balls to say, “Greed is good”? With­out in the least accus­ing him of any ille­gal­i­ties, I think so—at least at the social-responsibility level. Just why is he so thrilled to see news­pa­pers die, jobs be damned? Because he wants the remain­ing news providers to be able to charge more for con­tent, a point he seemed to make? Have read­ers pay more for the paper and value the ads more? Not to men­tion the higher rev­enue for agen­cies charg­ing clients a per­cent­age of ad costs? Maybe a hope, too, for more effi­cient place­ment of ads, with fewer news out­lets needed to reach more read­ers? Could sim­ple dis­like of “frag­men­ta­tion” be at work, a knee­jerk pas­sion for “con­sol­i­da­tion”? Could that be the rea­son? What­ever the case, this stinks from a public-interest per­spec­tive. We need bet­ter busi­ness mod­els and more appeal­ing con­tent and smart interactivity—not dead news­pa­pers and mag­a­zines when, even now, the num­ber of two-newspaper cities is dwindling.

Now back to the “blur” issue. Could big busi­ness, rather than the Inter­net and blogs, be the real threat to news­pa­pers, which would like con­sumers to see them as more cred­i­ble than born-digital pub­li­ca­tions? Who will want to pay to read new­soids, as I’ll call Sorrell-style news­pa­pers? You’ve heard of fac­toids—sort–of facts. Well, wel­come to the age of new­soids, at least if news-ad blurs pre­vail. If anti-consumer forces win out with laws penal­iz­ing grass­roots Web sites and other poten­tial new­soid rivals, you may have to read a new­soid for your major local news whether you want to or not. Granted, news­pa­pers have long car­ried “adver­to­r­ial” sec­tions, with advertiser-supplied mate­r­ial pre­sented in news­pa­per for­mat, and I approve of that as a money maker if con­spic­u­ous label­ing alerts read­ers and the busi­ness side sup­plies the copy. But my sense is that Sor­rell really wants busi­ness to have much, much more of a role in deter­min­ing the kind of news to be focused on by the edi­to­r­ial side. I doubt he would be an eager advo­cate of, say, increased labor-union coverage—itself already dimin­ished com­pared to the past.

The Wash­ing­ton angle: Will Con­gress have the guts to inves­ti­gate the adver­tis­ing industry’s pos­si­ble role in the death of news­pa­pers dur­ing the mas­sive tran­si­tion to digital?

The Gekko-style acqui­si­tions angle: No, Sor­rell isn’t an inde­pen­dent Wall Street oper­a­tor like Gekko, and once again, I’m not accus­ing him of law-breaking; but remem­ber he, too, is in the buy­out busi­ness. His acquisitions-minded com­pany employs 145,000 and has 2,400 offices in 107 coun­tries, with reported 2008 rev­enues of $13.6B. com­pared with oper­at­ing rev­enues of $6.7B for the Gan­nett news­pa­per chain in the States. The $13.6B could buy or start a lot of media prop­er­ties once WPP pays off its debts, which, like Gannett’s and many other chains’, can be wor­ri­some to some. WPP’s debt at the end of 2008 was $8.2B. Sig­nif­i­cantly, unlike Gekko, WPP has major pub­lic rela­tions and lob­by­ing capa­bil­i­ties that it could use against anti-trust offi­cials and oth­ers, as in fact it has done on occa­sion in the past in regard to tax pol­icy in the U.K.

The free­dom of the press angle: The WPP Code of Con­duct cov­ers top­ics rang­ing from drug poli­cies to avoid­ance of racial slurs and insider trad­ing. But unless I’m miss­ing some­thing, the actual code does not con­tain a syl­la­ble promis­ing respect for free­dom of the press, ser­vice to read­ers, or con­cern toward work­ers on news­pa­pers. I don’t see talk of, say, main­tain­ing bureaus in Iraq. If WPP-related sites pre­empt “legacy media” or if the com­pany even takes over estab­lished pub­li­ca­tions in some cases, will Sorrell’s con­glom­er­ate be the equiv­a­lent of Gor­don Gekko, who didn’t give a squat about the work­ers or pas­sen­gers of the air­line he tried to buy? A related doc­u­ment, a Cor­po­rate Respon­si­bil­ity Report, does say: “We sup­port the right of our peo­ple and their fam­i­lies to basic human rights includ­ing the right to organ­ise, the right to fair con­di­tions of work, free­dom of opin­ion and expres­sion and free­dom from forced labour and child labour.” But what are “basic human rights” as applied to pri­vately owned Web sites? Or the issue of jour­nal­is­tic respon­si­bil­ity? Pro bono work, such as efforts against global warm­ing, just isn’t enough to atone for a decided lack of for­mal interest—in the con­duct code and respon­si­bil­ity report—in regard to press free­dom and jour­nal­is­tic responsibility.

Last tweaked: Novem­ber 9, updat­ing the Sor­rell link and adding new information.

Prior usage of “Gor­don Gekko of adver­tis­ing”: Here, from Mike Rut­stein, who wrote the piece orig­i­nally for Med­ical Media and Mar­ket­ing (with­out Sor­rell in mind).

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