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

imageimageSy 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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David Rothman

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