Advertising in the press: an ethical issue

In September 2012, the French newspaper Libération released a front page that produced controversies. Bernard Arnault, CEO of luxury firm LVMH, appeared above the statement “Casse-toi riche con”. The sentence refers to the Bernard Arnault’s application for Belgian citizenship. After few days of verbal struggle between the CEO and the newspaper, Liberation said LVMH and other firms cancelled for €700,000 in advertising, in response to the front page1. The loss of such a sum can threaten the financial health of the newspaper, whose global sales are around 60 million €. What should Libération have done? Avoid criticizing LVMH’s CEO, to ensure its advertising revenue and financial survival? To deal with the issue of advertising in the press, we need to check its economic weight. In France, the newspaper industry obtains almost 40% of its revenue from advertising2. This number is even bigger in the US (almost 70%). The other 60% are revenues from sales. At the same time, the press industry faces a grave crisis and its benefits are very low. Advertising is thus essential for newspapers survival. Moreover, newspapers have faced the rise of free newspaper for few years. Free newspaper, like the worldwide distributed Metro, find 100% of their revenues in advertising. In front of free news, it has become difficult to sell information. More and more citizens consider today information as a right, and refuse to pay anything for it. The economic context is therefore constraining for newspapers. In such a context, one may argue ethical considerations should be dismissed. I try here to prove the press cannot afford to forget ethics. I also try to prove ethics and economic results are compatible, through the example of advertising in the press. In a first part, I will point out the ethical issue around a free press. I a second part, I will explain how advertising threatens freedom of the press. Then, I will mention alternatives to the classic press, proving it can escape from advertising.

I.

The freedom of the press issue

If the press were a classic business, a good press-maker would try to maximize his profit, by satisfying his clients. Here clients are readers and advertisers, which are both buyers. Readers buy the newspaper, whereas advertisers buy spaces to broadcast advertisements. A newspaper-maker has to balance the satisfactions of both types of clients: not too many advertisements to satisfy the readers who care about the content, but enough to satisfy the advertisers. Like in a market, an optimal equilibrium (or Pareto efficiency) can be found. At this point, the sum of the satisfactions of readers, advertisers and newspaper-makers are at the highest, and the society utility is optimized. In brief, a purely economic reasoning would accept a bit of advertisement. The current situation would thus be satisfactory. Yet the press rules are more complex than a market mechanism. It should respect imperatives created by its ethical and political status. There is indeed an ethics of the press. Within it, we can find concepts like truth and good journalism practises. A large part of the ethics of the press is linked with freedom of the press. I will focus on this issue, this ethical imperative.

1

http://www.lemonde.fr/economie/article/2012/09/13/lourdes-pertes-publicitaires-pour-liberation-apres-saune-sur-bernard-arnault_1759485_3234.html 2 http://www.dgmic.culture.gouv.fr/IMG/pdf/Enquete_Rapide_2011_Texte_et_chiffres.pdf

An ethical imperative appears around a commonly accepted standard, particularly when this standard may be threatened. Here, two commonly accepted standards are raised to defend freedom of the press: democracy and public interest. According to the Western philosophy, democracy should be universally respected. The government for everyone by everyone is the political system which accords the most value to the individual freedom. With regards to democracy, freedom of the press is compulsory at two different levels. At the first one, freedom of the press is a fundamental freedom, and a part of freedom of the speech. Our society thus considers freedom of the press as a human right. According to the Universal Declaration of the Human Rights, “everyone has the right to freedom of opinion and expression; this right includes freedom to hold opinions without interference, and impart information and ideas through any media regardless of frontiers”3. Like every human right, freedom of the press is a categorical imperative. As Kant said, a categorical imperative is necessary, and may be universally applied4. Consequently, the imperative of freedom of the press is not arguable, even in the case of economic necessity. It is there a case of deontological ethics: people shall act according to principle. At the second level, freedom of the press is a mean, a tool for the good functioning of democracy. The prominent British jurist Lord Bingham states “the proper functioning of a modern participatory democracy requires that the media be free, active, professional and inquiring”5. Media take here their literal meaning: a medium of communication within the society. Democracy is based on the ability of citizen to choose their destiny. To make their choice, citizens need information, given by the press. The instrumental value of the free press has been recognized by the British court in a case about the right of journalists to interview prisoners. Freedom of the speech is described as the “lifeblood” of democracy: “the free flow of information and ideas informs political debate”6. The free-press democracy is opposed to the one-media propaganda of dictatorship. In contrary to the first argue in favour of free speech, which depends on deontological ethics, we are there in front of consequentialist ethics. Freedom of speech is important because of its positive consequences on the political debate and the functioning of democracy. Another consequentialist reasoning takes public interest into account. It goes furtherer than the previous idea. The final goal of freedom of the press is not only the well-being of our political system, but the well-being of citizens. The concept of public interest refers to the general welfare of citizens. The general welfare should be the sum of the particular welfares or the situation which exclude the worst conditions (the justice according to John Rawls). This theory supposed that getting information from the press generates satisfaction. If we choose to maximize the sum of satisfactions, the pure freedom of the speech is necessary. But that could lead to intolerable situation for people being slandered or victims of disrespectful journalists’ methods7. Rawls ethics forbids those situations. In consequence, freedom of the press may be partially limited to protect public interest. The freedom of the press has been recognized as a political right stemming from the freedom of speech, and appeared in most of national constitutions or laws in democratic countries. In the

3 4

http://www.un.org/en/documents/udhr/ "Act only according to that maxim whereby you can at the same time will that it should become a universal law without contradiction." Immanuel KANT, Groundwork of the Metaphysics of Moral 5 http://www.official-documents.gov.uk/document/hc1213/hc07/0780/0780_i.pdf 6 Ibid 7 The recent News of the World ‘s scandal is an example of those methods.

United States, such a mention appears in the First Amendment to the Constitution8, among other political freedoms. However, it only concerns the action of the State. While the State cannot dismiss the freedom of the press, the Constitution does not deal with the factualness of freedom of the press in the American society. In France, the Declaration of the Human rights, which protects the freedom of the speech9, is part of the Constitution. In contrary to the US, it protects the freedom of the speech in general and not only with regards to the State. The freedom of the press refers to public ethics, answering to this question: how to structure our society and our institutions. Another level of ethics is built from this background: the corporate ethics. While public ethics concerns States and politics, and remains theoretical for the population, corporate ethics is used by professionals. Its aim is to answer to the question: how to behave according to personal and public ethics? The topic of advertising in the press is an example of this level of ethics. Journalists and press-owners have to translate the public ethics principles I evoked above – freedom of the press, truth – into concrete practises in their day-to-day work. In many countries, professional associations translate public ethics into corporate ethics through official code of ethics. These texts are similar to the Hippocratic Oath for doctors. First, an international charter (the Munich Charter) has been signed by the European Federation of Journalists10 in 1971. It defines the rights and duties of journalists. The following article is directly linked to the freedom of the speech: “the journalist cannot be forced to express an opinion which is contrary to his conviction”. Moreover, the Charter is aware of the danger of economic pressures. An essential duty of the journalists is “never to confuse the profession of journalist with that of publicist or propagandist; never to accept direct or indirect orders from advertisers”11. Secondly, national codes of ethics are respected in various counties. In France, the Charte des devoirs professionnels des journalistes français was written in 1918 and modified in 2011. In the United States, the Society of Professional Journalists has his own code of ethics, which states “conscientious journalists from all media strive to serve the public with thoroughness and honesty”12. The Swedish Code of ethics for the press is more concrete and tackles the threats of advertising. It states media shall not “let any public distrust to develop by letting third parties have an influence in the content of publications”. The Code also gives a branch of dangerous situations, for instance “when asked for promises for publicity beforehand”13. Nevertheless, even in the most democratic counties, the ethics codes of journalists never ask for a ban or a limitation of advertising. It only asks newspaper to be cautious with specific cases, like bribery. In the second part, I will explain why advertising is in itself a danger for the press.

II.

The ethical problem of advertising in the press

We have seen the press has to be ruled by wider imperatives than the financial one. The freedom and independence of the press lies among those ethical imperatives. However, advertising
8

“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” 9 « La libre communication des pensées et des opinions est un des droits les plus précieux de l’Homme : tout Citoyen peut donc parler, écrire, imprimer librement, sauf à répondre de l’abus de cette liberté, dans les cas déterminés par la Loi » (Article 11) 10 The organisation represents more than 310,000 journalists in Europe. 11 http://www.journalistes-cfdt.fr/charte-1918/la-charte-de-munich.html 12 http://www.spj.org/ethicscode.asp 13 http://ethicnet.uta.fi/sweden/code_of_ethics_for_the_press_radio_and_television

threatens freedom and independence of the press. I will explain such a threat in three points: the inner problem of advertising opposed to democracy by nature, the conflict of interests in the press, and the economic pressure on newspapers. The inner problem of advertising in democracy Because democracy should ensure free confrontation of opinions and values, advertising is a problem in itself. First, advertising carries its own values. Of course, it is not a neutral support for communication. The ideal carried by advertising is consumption and materialism. Several anticapitalist thinkers have written on the subject. Terence H. Qualter writes about a “ubiquitous commercialism”14. But the most prominent is probably Noam Chomsky. Chomsky developed an idea of class conflict. He used the term “propaganda model” to criticize media15. Advertising has a major role in this model. Both companies and newspapers belong to the same elite, and they have mutual interests: selling the most, and maintain a consumer society. The newspapers help to construct the mass adhesion to our socio-economic and cultural system (based on consumption and the domination of the elite). For instance, when the press uses the expression “American dream”, it implies a positive judgement of the socio-economic system. Meanwhile, the advertising sells “dreams” to the readers, and implies consumption triggers happiness. The result is the maintaining of the capitalist system based on consumption. In other words, advertising makes the media “serve, and propagandize on behalf of, the powerful societal interests that control and finance them”16. By carrying values, advertising prevents a true open-minded public debate from emerging. Secondly, advertising undermines the practise of democracy. Democracy supposes equality between citizens, i.e. equal voices in the public space. The voice of a rich citizen does not weight more than the voice of a poor one. A true democracy should let all citizens express their opinions in the same extent. Advertising goes against such a principle. Only few companies can afford advertising, which is expensive. In an advertising system, the rich and the poor are fundamentally unequal. Some can express their voices, and influence the minds. Others cannot afford it. This ethical problem is particularly pregnant in the context of political elections. In consequence, the State made laws to ensure every candidate can communicate the same in the media. In a non-political context, the State does not provide any equality between the players. The richest get the power to influence the mass through advertising, the mass do not. Those arguments condemn advertising in general. In the case of the press, the problem is even bigger, because the press is a democratic institution. Conflicts of interest and editorial pressures in the press In the context of advertising, the freedom of the press is endangered by conflict of interests. This takes two forms. The most visible is the pressure to erase articles that hurt advertisers. The struggle between Libération and Bernard Arnault is a good example of it: newspapers cannot publish against the interests of companies which are they clients, because they financially need those companies. An American survey from 1992 revealed 90% of new editors have “experienced advertisers withdrawing advertising to influence content”17. Several stories have revealed the pressures advertisers put on the press. The Forbes magazine owner re-wrote articles to avoid alienating advertisers. The magazine Esquire cancelled an article after pressures from Procter & Gamble. The

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Terence H. QUALTER, Advertising and Democracy in the Mass Age, Palgrave McMillan, 1991 Noam CHOMSKY, Edward S. HERMAN, Manufacturing Consent, Pantheon Books, 1988 16 Ibid 17 Robert L. CRAIG, “Advertising, Democracy and Censorship”, Censorship and Democracy, vol. 11, 2004

article, dealing with sex, was considered as too trash and harmful for the Procter & Gamble advertisement18. A similar ethical problem appears when a newspaper is owned by a big company. In France, both Le Figaro, Libération and Les Echos are owned by big economic interests (Dassault, Rotschild and LVMH). Advertisers can also influence newspapers in the choice of the topics. Advertisers want articles to be good drivers for advertisements. They need journalists as a mean to communicate about their products. In some cases, articles seem to have no other utility than a moral justification for selling advertisements. For instance, newspapers created columns only to attract advertising. Luxury, consumption and “way-of-life” pages are disguised advertisements. Too often, articles about watches take place next to advertisements for watches, and articles about holidays in Croatia take place next to advertisements for holidays in Croatia. Sometimes, editors and advertisers even work together and share profits. The Los Angeles Times scandal in 1995 showed the newspaper “split the profits generated by a 16-pages special section about the new Staples Center sports arena with the Center itself”19. By influencing journalists directly or indirectly, advertising threaten the freedom of the press, and acts against the interest of readers. C. Edwin Baker wrote “advertising operates as a censor because the media content desired by advertisers is not the same as the content desired by media consumers”20. Back to last example, Baker means readers have no interest in reading about the new Staples Center, but the newspaper chose to favour advertisers. In other words, newspapers balance between clients often benefits to advertisers instead of readers. The economic pressures on newspapers The third ethical problem led by advertising is linked to the previous one. Advertising put pressure on papers to be read by the most. Newspapers are pushed to adopt a marketing strategy and will produce no more information but infotainment. The reason is that newspapers are in competition to catch advertisements. One may argue a newspaper only depending on sales would have the same pressure: attract the most readers. Anyway, the commercial pressure is undoubtedly bigger when it is set by advertisers. Without advertisements, a newspaper only needs to balance its budget on a whole year. If an edition is not sold enough, the next one can compound the failure. With advertisement the quick success is compulsory. The advertiser does not tolerate the long-time: his advertisement is an investment which shall be profitable as quick as possible. Newspapers, the Internet and each support for advertisement are in competition to attract companies. If the investment is not profitable enough, the investor – the advertiser – removes it. We can also argue advertising push the press to conglomerate. A bigger firm is indeed stronger in bargaining and getting better price from advertisers. To obtain bigger revenues of advertising, two newspapers should rather merger together. That directly leads to the threat of press concentration, not so different from the complete state control over information. Moreover an advertiser, who has interest in the success of a newspaper, can misevaluate the true potential of it. Readers and advertisers behave not the same. Advertisers have indeed schematic
18 19

Ibid Ibid 20 C. Edwin BAKER, Advertising and a Democratic Press, Princeton University Press, 1994

ideas of readers as customers. As the old-school marketing do, they simplify the reality to construct models. These models are for instance segments of readers, which are supposed to have the same profiles and preferences. A middle class Christian housewife with three children is supposed to read the same articles as others middle class Christian housewives with three children. She is also supposed to be seduced by the same advertisements. As a result, advertisers totally ignore the housewife who has different preferences. But she exists and buys newspapers. Moreover, the market of readers is not as perfect as the market of advertisers. Companies generally get good information, and optimize their spending. Readers do not. They have their habits, they follow their instincts and they can buy a newspaper by chance. Therefore, a small newspaper dealing with a very specific topic which only interests a minority according to the marketing studies, can finally reach a bigger audience. As a result, the typical press company shaped by advertising has to be big, dealing with safe and mainstream topics, and trying to fit commercial segments. At the same time, a wide range of subjects would never appear in a newspaper depending on advertisements. The subjects would be considered as potential commercial failures, because they do not fit the marketing models. Yet it can work and trigger commercial success for the newspaper. Some examples prove it.

III.

Alternatives exist

Alternatives to advertising-press are arising, in the particular context of the economic crisis. Advertisement is currently fleeing the press. The internet is attracting more and more users, who are potential customers. To reach them, companies invest more on the internet, and less in the press. Advertisement importance is smaller than before. The revenue of advertising for newspaper is decreasing. For instance, advertising revenue of British newspapers is expected to fall by 9% in 201321. In the US press, the revenue of advertising has dramatically felt since 2000. Today, the revenue is almost the same than in 195022. Although the press is still strongly dependent on advertising, the overall trend is the fall of the advertising revenue. As a consequence, newspapers need to find new business-models to survive. Some bet on the internet, but none made profit with their websites. The website of the British newspaper The Guardian lost more than £40m last year. Several chose to make the readers pay online (The Wall Street Journal, The Times…). In the same time, the prices for printed editions rose. In France, the main newspapers cost nearly €2, twice than few years ago. In the US, the New York Times cost $2.50. As a symbol, the New York Times announced in January 2013 that subscriptions generated more revenue than advertising, for the first time in its history. We can thus say the press is facing a double challenge: an ethical one and as well as en economic one. Newspapers have to adapt to the decreasing revenue from advertisement, byh increasing prices. But are they cancelling advertising meanwhile? Unfortunately, only few newspapers made the choice of the non-advertising, which remains very risky. But there are enough cases to analyse and some are prominent success. I will focus on French newspapers, but I am sure similar examples could be found in other countries. Free-advertising newspapers are not new in France. The most famous, Le Canard Enchaîné, was launched a century ago. This newspaper is totally free from advertising, and generates astonishingly huge revenues. Its success is so impressive that the Wall Street Journal made an article about it,
21 22

http://www.guardian.co.uk/media/2012/dec/11/uk-newspaper-advertising-bleak-forecast-2013 Newspaper Association of America published data

writing “Le Canard may offer a valuable parable to the news industry”. But many others newspapers exist without advertising. Those papers are very different one from each-others. Le Canard Enchaîné and Charlie Hebdo are the only being published weekly, some are published monthly, others quarterly. While some defend strong political points of view, others are less politicized. To sum up, we can distinguish two formats and two motivations within those newspapers. About the format, some newspapers have chosen to sell an elaborate “object” rather than a simple newspaper, hence expensive prices and long-time publishing frequency. The journal XXI is the main example of it. The journal has been described as a “mook”, a hybrid between magazine and book. Several mooks followed XXI : Feuilleton, We Demain, Muze. These magazines are sold in bookstores instead of traditional newspapers kiosks. They cost around €15, and are published quarterly. They do not directly deal with news or politics, but tell actual stories from all around the world. They pretend to treat their topics in depth, in contrary to the usual press. They also want to sell a beautiful object as well as stories and information. While normal newspapers are usually thrown away, mooks are kept like a book. Meanwhile, other advertising-free newspapers do not care as much about the format. The paper is simple, the price cheaper, and they are published more often. Moreover, readers buy them in kiosks, like normal newspapers. Those papers are usually dealing with political topics, with satirical or critical tones. The main examples are Le Canard Enchaîné and Charlie Hebdo. We can also name La Décroissance, CQFD, Fakir, Article 11. These very politically engaged newspapers are weekly or monthly published, and essentially deal with political news. The topics are different for the monthly Le Tigre and L’Impossible, which do not concern news and politics, but society and individuals stories. Then, we may distinguish two kinds of motivation to refuse advertising. Some journals are motivated by pragmatic reasons. For instance, XXI does not contain advertisement because nobody was interested at the start23. The journal working well, the owner does not need advertising any more. We can argue the motivations are as much pragmatic for the others mooks. Not to have advertisement is even a marketing argument. Mooks makers sell a product between the newspaper and the book. Not to have advertisement helps not to be considered as a newspaper. It implies that readers would not pay so much for a journal with advertisements. On the other hand, some newspapers have ethical reasons not to publish advertisements. It is obviously the corporate ethics I presented above that push Le Canard Enchaîné to be advertisingfree. Likewise, the chief redactors of Le Tigre and Article 11 have often written about their advertising-free policy. Le Tigre explains they want to keep “the absence of advertising, their financial and editorial independence”24. Michel Butel from L’Impossible compared advertising with “renouncement”25. These papers defend values, such as democracy and independence. Others papers like La Décroissance, which is very politicized, refuses advertisement on a political basis. Advertising is considered as a capitalist practise. Some of these political papers are even linked with anti-advertising activists. While Le Tigre defends a corporate ethics – the independence of the press, La Décroissance defends a public ethics principle: advertising shall be forbidden. In general, all those papers pretend to be different from the classic press. They all reject the mainstream journalism, based on news items. They claim to practise a deep journalism, and criticize the short-term view of the classic press26. I thus want to include the advertising-free press in the slow movement trend. This ideal rejects the mass-consumption system. It aims at fighting the stress
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Public speech of Patrick de Saint Exupery in January 2013 in Lille http://www.le-tigre.net/L-avenir-du-Tigre,24025.html 25 http://www.limpossible.fr/actualite/michel-butel-donne-des-nouvelles-de-limpossible 26 Ibid 23

caused by our workers and consumers condition27. Inside the slow movement, one may find practises like slow food, slow sex, and slow media. According to the manifesto of slow media28, the press should focus on quality and the involvement of readers. Both pragmatic and idealistic nonadvertising newspapers need this involvement from readers: some are expensive (the pragmatic mooks), others carry strong political and ethical values. We are thus in a slow media perspective.

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To conclude this essay, let’s have a look on economic considerations again. Though a newspaper respects ethics, the interest is nothing without economic survival. We can wonder if ethics and business are compatible. May an ethical behaviour lead to commercial success? All of the advertising-free newspapers had not the same success. XXI has known a huge one for 5 years. 400,000 copies of the first edition have been sold29. This hit was a true surprise: neither analysts nor advertisers expected any commercial success. Even the creators expected fewer sales. Still today, the averages sales reach 450,000 copies, and the newspaper makes profits. XXI is now a reference for all the mooks being launched for a couple of years. The non-advertising probably plays a role in its prosperity. In bookstores, buyers expect a mook not to have advertisements, like they do for a book. Thanks to its non-advertising position, the journal got a quasi-book status. Readers thus accept to pay €15. In others words, the absence of advertising gave XXI a commercial legitimacy, based on the quality of the thing. Other success story, Le Canard Enchaîné sells more than 500,000 copies each week, and made €4.4 million in 201030. Beyond the commercial success, the paper has got a large credibility. It is become an institution, and worked at revealing many political scandals through the last decades. Nonadvertising refers to a political legitimacy for Le Canard Enchaîné, instead of a commercial legitimacy in the case of XXI. Readers do not care about the quality of the object, but are sensitive to the independence of the newspaper. Le Canard Enchaîné carries political values, and a strong concern about democracy. This position probably pleases readers. However, most of the others newspapers I evoked above know economic difficulties. Some gave up, notably among the mooks that tried to imitate XXI. Many others rely on the donations from readers. For instance, Le Tigre publishes a call for donation each year. In its speech, the refusal of advertising is defended31. The newspaper expects the readers to adhere to their ethical values. For the moment it has been a success, but the company is on the edge of bankruptcy. Likewise, L’Impossible generally publishes a call for donation in the paper: “Sometimes, shareholders support the press. It is not our case. Revenues may come from advertising. It is neither our case. Remain the readers: you. Small amounts are enough. This mode of production is ideal. It shows the common state of mind between authors and readers.” 32 For the moment, the economic balance is positive, but for how long? Imagining a press without advertising is possible, and concrete cases prove it. But it remains minor in the press industry. Too many newspapers which bet on an advertising-free model are suffering.
27 28

Carl HONORE, In Praise of Slow, Orion, 2005 http://en.slow-media.net/manifesto 29 http://www.journaliste-entrepreneur.com/2010/10/revue-xxi-un-pari-reussi-sur-la-%C2%AB-valeur%C2%BB-du-journalisme-de-recit/ 30 http://newsletter.challenges.fr/lireA2.php?fichierN=295 31 Editorial, Le Tigre, december 2012 32 L’Impossible, mars 2013

Several found a difficult equilibrium between sales and donations. To my mind, this model is the most ethical. With donations, newspapers do not depend on sales any more. They are free from this economic pressure. The reader-donator acts as an engaged citizen. He is politically involved in the survival of the paper. Therefore, the donation model can exist for political valued newspapers, but its translation to the mainstream papers would be tough.