By Nick Grant
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Who sank the News of the World?

This article is over 10 years, 6 months old
Advertisers fired the torpedoes that sunk Murdoch’s flagship, the News of the World.
Issue 2260

Advertisers fired the torpedoes that sunk Murdoch’s flagship, the News of the World.

Ford pulled spending first, quickly followed by high street retailers like Sainsbury’s and Boots. Why did this happen?

Firstly we need to understand the general economic facts of the media.

Consumers of mass media receive news, views, entertainment and information.

These are the hooks that get us to pay the cover price or subscription/licence fee.

We are the fish being hauled in, but who is the angler?

It is the media capitalist who goes one stage further than is obvious at first sight.

Audience figures for each newspaper, magazine, movie, radio or TV show become commodities. Our eyes and ears are sold to advertisers, and bought at market prices.

Media buyers handle this trade in media audiences on behalf of clients seeking both mass markets and niche markets for their products.

These media buyers are not so bothered with the politics of a particular paper. They will recognise it—but prioritise matching their client with a target consumer. They want to know who is reading, watching or listening, how often and for how long.

Top of the range Jaguar cars are more likely to be advertised in Vogue and the Financial Times than tabloid newspapers. Coca Cola and Heinz beans are more likely not to be.

Some products have cross-class markets and can be placed in media that reach mass audiences. So Sky Sports football coverage is sponsored by Heineken lager and Ford while Barclays Bank sponsors the Premier League in Britain.

We should think of all commercial media in the opposite way to our common-sense notion. Each is a set of adverts interspersed with editorial materials of varying factual or fictional content, not the other way round.

As a sometime teacher of media studies I ask students to collect a range of print media and count the pages devoted to advertising and editorial content. I also ask them to list the kind of products being advertised.

It becomes quickly clear that more down-market publications tend to have a higher advertising content, for cheaper household goods. Upmarket publications peddle costly luxury items.

Why did such a haemorrhage of advertising revenue occur at the News of the World?

The need to improve profits by attracting the highest possible audience figures and sell them to advertisers requires journalists to deliver scoops and exclusive news week after week.

In the News of the World case, a greater narrative about the justice of its methods overwhelmed a business operation that turned stories and audiences into commodities.

The scandal appalled many ordinary people—and may have impacted on the paper’s sales. Advertisers rushed to dissociate their own reputations from such a tainted product at a time of high economic, social and political tension. This is a business and political decision.

There are sub-plots here of course.

Advertising revenue has been plummeting for some time. The profits available for research and development, training, reinvestment in plant, and marketing have been squeezed in the recession.

Many of the companies that pulled their spending from the News of the World may have been looking to cut back anyway. They want even higher bangs for their reduced advertising bucks, and new technologies mean that older channels of advertising like newsprint are becoming redundant.

This episode is a case of capitalism crashing under the weight of its own contradictions.

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