Lapdogs vs. Watchdogs: State Advertising and Media

Several years ago, the government in Macedonia, in power for more than eight years now, spent close to €600,000 on a campaign urging citizens to be more optimistic and respect good values. This was a curious initiative in one of Europe’s poorest countries, where almost a third of the people are unemployed, and the same proportion live under the poverty line.

This campaign was only one in a bevy of advertising contracts totaling €20 million that the government gave to media companies over five years. It is a high figure for a country of two million inhabitants, where wages average €340 a month, and even less for journalists.

This pattern of state subvention is far from unique to Macedonia. Governments around the world know that the digital revolution and the financial crisis have hit media revenues hard, so that state advertising can keep many outlets afloat. But, of course, in most cases, they are looking to buy much more than advertising space. They are paying for support.

States spend advertising money in almost half of the 56 countries surveyed in the Mapping Digital Media research coordinated by the Open Society Program on Independent Journalism. And in most of them, analysts recognize that state advertising is manipulating the media on their behalf. Exceptions include the UK, Uruguay, Japan, and South Africa.

“Of all the means that states have to support media, state advertising is arguably the least transparent and thus the most problematic,” wrote Martijn de Waal in an overview of trends in the media economy. “Across the globe, this resource is misused by states to support friendly media and discriminate against critical journalism.”

State advertising cash is used in two ways that serve the same goal. It either rewards supportive or non-critical media outlets, or it subsidizes critical yet ailing media companies that the government wants to silence. The impact of state advertising on the editorial line is not always easily detectable, but testimony abounds from journalists at government-funded media about prohibited investigations or attacks on rival politicians.

In most Western markets, state advertising is dwarfed by the total private ad spending. However, it may make its real impact at the local level. In Spain, the state spent a mere €80 million on ads in 2010, according to the latest available data. That was roughly 2 percent of the total ad market. However, this doesn’t include ad funding doled out by municipalities where the money is used to reward loyal media.

In most of the non-Western world, many media outlets would not survive without state advertising. In Pakistan, estimates put state ad spending near PKR 5 billion (US$50 million), which is almost a fifth of the entire ad expenditure in the country. In Colombia, local media depend on state advertising for more than half of their budgets.

Predictably, state advertising spend grows before elections as parties use their resources to bankroll electoral campaigns. Also, following elections, governments redistribute state ad spending to match their affinities. After the 2012 elections in Slovakia, the government of Robert Fico increased the ad budgets for the friendly TA3 all-news television and daily Pravda while slashing the spending allocated to the critical Sme daily.

Advertising money is sometimes channeled by governments through state-owned companies. In recent years, several state-controlled companies in Slovenia have moved their ad contracts away from the critical media. In Serbia, where state ad spending can account for up to 40 percent of the overall ad market, the state-owned telecommunications giant Telekom Srbija spends at least €10 million on advertising yearly. The most favored media outlets are those owned by the state. Politika daily, half-owned by the state, gobbles up almost two-thirds of the total state ad spend, according to a study by the World Association of Newspapers (WAN).

State ad contracting often operates through preferred ad agencies. In Hungary, for example, the state-controlled Hungarian Development Bank awarded the ad agency Bell & Partner some US$1.8 million for purchasing ads in 2013. The agency received the contract through a “negotiated tender” where it was the sole bidder, according to WAN.

In these countries, as in many others, the Mapping Digital Media researchers found signs of a tacit industry agreement: media companies which are affected don’t lodge complaints, either because they fear government retaliation in other forms or simply because they themselves could one day benefit.

Sullen resignation to the reality of state advertising is yielding to debate about what can be done. Latin America leads the way in developing a regional standard. In 2011, the Special Rapporteur for Freedom of Expression at the Inter American Commission on Human Rights, Catalina Botero, launched a set of principles on the regulation of government advertising [PDF], calling for fair and open criteria in disbursing state ad money based on market considerations. Peru recently introduced new rules on state advertising, requiring state authorities to publish their reasons for investing in certain media outlets and the exact figures.

In Europe, by contrast, little has yet been done. The Council of Europe has not tackled the problem head-on, although it obviously merits a recommendation. The European Commission is very active in opposing market-distorting state aid practices, yet it hasn’t ventured far into investigating state advertising deals. It has been left to the Commission’s High-Level Group on Media Freedom and Pluralism to note—in its non-binding report [PDF]—the alleged “interference by political authorities in the work of journalists … by restricting access to public advertising.” The High-Level Group recommended transparent and equitable distribution of state advertising, “reflecting not only numbers of readers but actively supporting responsible journalism and pluralism.”

The Open Society Foundations are helping WAN to try and plug this gap by raising awareness of “soft censorship” and preparing an advocacy campaign in Europe. Whatever the fate of this particular initiative, pressure to make state advertising allocation more open and transparent is bound to grow as more media outlets clamor for state funds. But this harmful practice won’t be stopped until citizens realize how their tax money is being spent to mislead them with slanted information. 

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