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First of three articles

At free dailies, advertisers sometimes call the shots

News blends with ads, and the wealthy come first for home delivery

Columnist, advertiser or both? In his San Francisco Examiner real estate column last week, Realtor Bryan Jacobs advised readers to "hire a Realtor." His own ad appeared on the previous page. Click here to see Mr. Jacobs' column.

Free tabloid-size daily newspapers are being heralded as a cure for an industry in decline. But when advertisers become the papers' only paying customers, some readers might consider the remedy worse than the ailment.

A close look at the most prominent local free dailies reveals a number of journalistic problems that have arisen through this novel business model:

Free papers did not invent any of these practices. But as their readership and influence grows, some of the new free tabloids in the Bay Area are taking the commercialization of news to a new level.

In the first of three articles, we examine the role of advertisers in shaping coverage and access to the news. In subsequent articles we’ll look at whether the free local tabs benefit the civic life of their communities.

Satisfying 'corporate HQ'

The Palo Alto Daily News makes no apology for its pro-advertiser orientation. And the influential giant newspaper chain that acquired it last February, Knight Ridder, claims not to be familiar enough with its contents to comment.

The Daily News regularly runs a chatty feature called Town Talk. The writer, Joan Dentler, recently heaped praise on each of the13 businesses she considered, sometimes using the language of a reviewer: "Clair de Lune is a rarity on the mid-Peninsula: a colorful, playful and hip boutique ala Provence, owned by a team of designer-savvy sisters..." But elsewhere, her writing read like advertising copy: "At the Dollar Warehouse, your 11th item is free with the purchase of 10 items all priced at $1 or less -- even the Mylar balloons. Stop in and tell Sam you read about him in the Daily News."

Double duty: The Palo Alto Daily News' Robby Schumacher said she is "both an entertainment guide columnist and an advertising representative." The Poynter Institute's Kelly McBride said that arrangement signals "competing loyalties." Click here to see Ms. Schumacher's column.

In fact, Town Talk is pure business promotion written by the advertising department -- but nowhere on the page does it say so. Only on the Web site of the East Bay Daily News, the newest of the paper's six geographic editions, is the feature described this way: "It's a column devoted to selling ads so we can make enough money to keep the people at corporate HQ happy."

Asked if she thought the mix of ads and news could confuse her readers, Ms. Dentler, who has a journalism degree from Ohio University but has worked mostly in ad copywriting, said a "regular reader" could tell the difference.

"I've never really thought about it that way," she said. "I don't think it's ever the intention of the paper to be misleading. It's intended to give the ad sales reps an extra boost. And it's clearly working, because our circulation is growing."

Similarly, the paper's "Buzz" entertainment section is a seamlessly laid-out blend of articles penned by the advertising staff but presented as news ("Now there are more reasons than ever to satisfy your appetite for a New Zealand vacation!") and unquestionably real journalism, such as articles from the Associated Press, Knight Ridder/Tribune Information Services and a column by syndicated movie critic Roger Ebert. The section also employs a restaurant reviewer and a fine arts writer, both of whom are ad reps.

Also in the mix are promotional-sounding articles, such as the glowing two-page story earlier this month titled, "My day at the salon," by the managing editor, about Mountain View’s American Male Salon -- an occasional advertiser.

"It sure didn't seem like three hours had gone by," Jeramy Gordon wrote in a first-person "review" surrounded by eight photographs of his facial, manicure and pedicure, "but everybody had done a fabulous job and I looked pretty damn good."

Promotion or journalism?

On its face, the whole idea of the "Buzz" section would appear to violate the Society of Professional Journalists' code of ethics, which urges reporters and editors to "distinguish news from advertising and shun hybrids that blur the lines between the two." The appearance of journalistic conflicts of interest, said the late president of the society's Northern California chapter, Beverly Kees, help erode the credibility of the news profession, which today "ranks lower than spider spit."

The logic behind the traditional "wall" separating the news and advertising functions at newspapers derives from their different purposes: Advertising is persuasion on behalf of a client, while most journalists agree that news ought to be impartial information gathered for the benefit of the public -- a distinction known in the news business as "separation of church and state."

The Daily News chain blends the two.

"I'm both an entertainment guide columnist and an advertising representative," said the Daily News' Robby Schumacher. Her columns in the "Buzz" don't mention her advertising role, and laud both community organizations and businesses. "We're not going to knock 'em," she said. "That's our community. They're our people.

"I wouldn't say it's a promotion; it's information," Ms. Schumacher explained. "It's never, 'You have to advertise in this paper to get coverage.' But they get a lot of calls from the coverage, and a lot of the times that's why they want to be in our paper. If they get great business out of it and they want to continue getting good coverage out of us, then hopefully it will be a great, great thing and they will come back to us."

Paying back the piper: The Town Talk feature in the Palo Alto Daily News chain plugs businesses, such as a local Harley-Davidson dealer. "It's a column devoted to selling ads so we can make enough money to keep the people at corporate HQ happy," the company says. Click here to see Town Talk.

But Kelly McBride, an ethicist at the Poynter Institute, a school for journalists in St. Petersburg, Fla., said the dual advertising/journalism role creates "competing loyalties." Even if there's no agenda of paying back advertisers or luring new ones, she said, you can't serve the reader doing both jobs. At minimum, she said, the Daily News should disclose their full job descriptions to readers.

If you're a journalist, "it's the service to the reader you're trying to provide -- a fair and honest assessment of a business in a business column," she said. "If the purpose is to generate ad revenue or reward good advertisers, then you've placed another value in front of serving the reader -- the value of profit-making -- by virtually duping the reader."

Memo to writers: 'partner' with business

Running promotional stories in the service of advertising has been a longstanding policy at the Daily News.

In a memo he wrote to the staff as the Palo Alto Daily News was starting up 10 years ago, the paper's co-publisher, Jim Pavelich, outlined his view that the business reporter should write stories that promote advertisers:

"In addition to covering business as a news beat, this person must also cover local business from the perspective of the business owner, or, as their partner," he wrote. "This means promoting the business as their own. This is the key to early and continued success. If we embrace our advertisers and help them promote with good writing and photos, they will become our strongest supporters.

"This in no way compromises the ethics of the editorial staff," he continued. "Hard business news should be covered as such and promotional news should not interfere."

Asked about the memo, which was provided to Grade the News by David Danforth, a former partner in the Daily News, Mr. Pavelich said the paper has always distinguished its promotions from its "hard" news about business. He added, "If a chef gets a DUI, it goes on the front page of the paper."

The dual journalistic/promotional role no longer applies to business reporters, he said, because the paper can now afford to hire people to do each job separately. Town Talk, he said, is now written by the ad department and is "there to shamelessly promote business."

But he argued that even though it is designed to look like news, no native speaker of English could possibly be misled because the writing is so obviously not journalistic. "It's a fun community thing, and it's a product of public relations."

The Daily News' other publisher, Dave Price, concurred. He laughed off any suggestion that the ads-as-news printed in his paper could be misunderstood.

"Do you have to label a duck a duck?" Mr. Price said. "Treat the readers with the respect they're due."

If we embrace our advertisers and help them promote with good writing and photos, they will become our strongest supporters.

-- Jim Pavelich, co-publisher, Daily News group

Scholarly research, though, suggests even educated readers might get confused. A study by Glen T. Cameron at the Missouri School of Journalism has shown that advertising material is more likely to be believed, and is retained in readers' memory longer, if it is laid out to look like news. "The bottom line is that 'advertorials' do borrow from the editorial credibility of the paper," he said.

See no evil

In February the Daily News chain was purchased for an undisclosed sum by Knight Ridder Inc., the company that owns the neighboring San Jose Mercury News and the Contra Costa Times, the second- and third-largest circulation newspapers in the Bay Area, respectively. Asked if the company, which is among the most journalistically respected in the country, would try to rein in the mixing of news and ads in its newest properties, two Knight Ridder executives said they were not familiar enough with the paper to offer a comment, and referred questions back to Mr. Price.

"The readers seem to love them," said Jerry Ceppos, Knight Ridder's vice president of news. "My vote would be to keep running them as a separate enterprise. I would describe it as an experiment." Mr. Ceppos said he has yet to make the 18-mile trip up from Knight Ridder’s San Jose headquarters to visit the Daily News main office in Palo Alto.

"I do think it's reasonable to say that these newspapers were purchased because they are successful as they are," said Polk Laffoon, vice president of corporate relations. "So I would be surprised, if they had a successful formula, that we'd be jimmying with that formula."

The Examiner: 'columns' by advertisers

Although executives of the San Francisco Examiner maintain that there is a wall between advertising and news, the wall seems to have quite sizable perforations.

Afsoon Shahrdar, an agent with Cashin Co. Realtors in San Mateo, writes a real estate advice column on Fridays in the Examiner, and at the end of the column her employer is identified. But whereas most journalists are paid for their expertise, with Ms. Shahrdar's column the arrangement is essentially the other way around.

Nowhere on the page does it mention that her company pays the Examiner for quarterly ad inserts and display ads that appear in its sibling publication, the Independent.

"Our company advertises with them constantly," Ms. Shahrdar said. "I felt it would be good for the exposure of me and my business if I wrote a column."

She said the column, which she started this year and sends by fax to an Examiner ad rep, is not advertising per se because no money changes hands upon submission. "It's an indirect advertising for me because people would want to know who wrote that article. In the body of the article it's all information for the consumer. I don't promote myself. But at the end, there's a picture of me and an explanation of who I am."

Similarly, Bryan Jacobs, co-owner of J.V. & Associates Inc. Real Estate and Finance in San Carlos, wrote a column last Friday giving readers advice on renting their own homes. His suggestion for navigating the complications of property law also happened to benefit his professional association: "If you have concerns, it's always safe to contact your local Realtor or attorney ... Better yet, hire a Realtor to do the work."

The Realtor's eighth-page ad appeared on the previous page.

There are also press releases from advertisers dressed up as news. On the same page as Mr. Jacobs' column was an article, again in the Examiner's standard typeface and news layout, with the headline: "The Manchester at Cambridge in Belmont is a stunning escape." It had no byline, but started with this improbable sentence: "If you seek ultimate style, a wealth of state-of-the-art features, low-maintenance, and mid-Peninsula living in the secluded Belmont hills, check out Cambridge by SummerHill Homes."

In the case of the advertisers, who come first because they generate the funds that allow us to have a free tabloid, the problem is making sure that they reach everybody they want to reach in the marketplace.

-- Robert Starzel, former chairman, SF Newspaper Co. (Owner of the San Francisco Examiner)

The article is really an unlabeled ad, said its author, SummerHill Homes' Marketing Manager Laura Jamison. Such writeups are submitted along with the company's occasional boxed display ad, and run whenever the newspaper has room for it. While the San Francisco Chronicle does the same thing, she said, there it is clearly labeled "advertising feature."

Though it looks like other news pages, not a single article in last week's Examiner real estate section was written by a journalist.

And then there are news articles by bona fide journalists that happen to harmonize with ads. Last month the paper ran an ad for a Celine Dion concert in Las Vegas opposite a prominent staff-written write-up and photo of the same event.

The editor of the Examiner, Vivienne Sosnowski, said the newsroom gives a heads-up to the ad department about coming features. But not vice versa: "I don't know anything about advertising until it appears in the paper the next day," she said.

Poynter ethicist McBride criticized the ethics of the arrangement. "It undermines the editorial independence," she said. "It would be a disincentive to do critical stories if you knew that the advertising department was using that [story] agenda to sell ads. It would also create confusion among staff about why you chose the stories you did. It's essentially creating a product to serve the advertisers rather than the readers."

Where advertisers 'come first'

The management of the Examiner is clearly sensitive to issues of advertiser accommodation in the news pages. But it's the circulation side of the company that lets business set its agenda in an even more direct way.

The Examiner drops tens of thousands of copies in free boxes in San Francisco and the Peninsula to the south. But tens of thousands of other papers go toward targeted free home delivery -- intentionally sidestepping poorer neighborhoods, where a free newspaper is arguably most needed.

Whereas traditional newspapers are invited into homes by readers who choose to pay for a subscription, the Examiner inverts that relationship. The paper very carefully picks its readers based on who it feels can afford to buy products advertised there. The paper's newest owner, Denver billionaire Philip F. Anschutz, has found the model so successful that he bought a newspaper company in Washington and early this year re-launched it as the Washington Examiner, also delivering to "upscale" addresses -- households with incomes of more than $75,000 a year.

"We deliver to blocks that are the highest probability of having the kind of demographic groupings that the advertisers want," said Robert Starzel, who until last month was chairman of the company that runs the San Francisco Examiner, at a meeting of the California Society of Newspaper Editors in April.

"What we should be doing is what every good business does, which is figure out how to be a constant problem solver for people," Mr. Starzel said. "What are their problems? Well, in the case of the advertisers, who come first because they generate the funds that allow us to have a free tabloid, the problem is making sure that they reach everybody they want to reach in the marketplace."

Most American newspapers already rely on advertising for at least three-fourths of their income. And most spend a great deal of effort studying their readership in an effort to demonstrate to advertisers their readers' consumer potential.

"It's an unfortunate fact of life," said John Morton, a newspaper industry analyst in Silver Spring, Md., and columnist for American Journalism Review. "All newspapers do it. Look at the New York Times -- it appeals to a very narrow slice of the demographic. Almost every newspaper today emphasizes the favorable demographic of its readers."

The difference with free papers is that they have decided that it's not worth the headache of going after readers' increasingly elusive pocket change. The real money comes from selling ads. So eliminating the per-copy charge means you can print as many copies as advertisers will pay for, without the hassle of managing and collecting payment for individual subscriptions.

Many of the free dailies that have emerged in the last five years in New York, Chicago, Boston, Philadelphia, Dallas, San Diego, Washington and other cities are targeted to commuters. But they generally hand them out downtown.

"They don't just hand them out on the street, they hand them out at specific places on the street at specific times -- they hand them out to people who have jobs at rush hour," said John Burks, chair of the journalism department at San Francisco State University.

We're a newspaper first and foremost, and then a business.

-- Jerry Lee, publisher, San Mateo Daily Journal

The Daily News has also started to home-deliver some of its editions on Sunday. While the paper goes to doorsteps in the relatively wealthy community of Palo Alto, it doesn't go to the mostly poor and immigrant city of East Palo Alto, just across Interstate 101.

Selective demographics might also explain why Knight Ridder and the Alameda Newspaper Group have both studied the relatively wealthy Berkeley market to start a new free daily, as opposed to focusing on poorer communities such as Richmond to the north or even Oakland to the south. ANG's free daily experiment, The Daily Flash, was apparently abandoned after Knight Ridder got there first with an eight-page handout called the East Bay Daily News in May. Like the Examiner and the other Daily News editions, the East Bay Daily News prints ads on its front page, including a box that recently ran in the lower-right corner beseeching, "THIS SPACE FOR RENT."

Advertisers don’t always come first

But not all papers are as quick to bend over backwards for advertisers. Some publishers say the total reliance on advertisers in the free daily model does not necessitate compromising the journalistic impartiality of the paper.

David Danforth helped start the Aspen Daily News in Colorado and is still involved in free papers in Santa Monica and Conway, N.H. He was involved in the founding of the free Berkeley Daily Planet (which now publishes two days a week under different ownership), and was an original partner with Mr. Price and Mr. Pavelich on starting the Palo Alto Daily News. He split with them in a fight that ended up in a complex lawsuit that he lost.

One of the reasons he said he could no longer work with his former colleagues was their avoidance of news stories that might embarrass advertisers, he said. The Daily News' remaining two publishers said Mr. Danforth's claims are sour grapes. They denied pulling stories to mollify advertisers. But Mr. Danforth maintains that the free daily model does not necessitate bending journalistic rules.

"There's no institutional reason why non-paid dailies can't support good journalism," Mr. Danforth wrote in an e-mail. "The problem isn't paid/non-paid, as some in the paid daily biz would have you believe. It's in financial pressure brought to bear by advertisers/golfing buddies."

In the Bay Area, there is a third free daily that disclaims the business strategies of both of its free competitors.

The 22,000-circulation San Mateo Daily Journal -- less than a third the claimed size of the Daily News and a seventh the size of the Examiner -- says it doesn't target the wealthy for delivery. Instead it focuses on businesses and apartment buildings where distribution is easiest.

While the Daily Journal is not above running front-page ads, its owner says he refuses to create editorial content as a favor for advertisers. A quick survey of the paper supports his claim.

"We're a newspaper first and foremost, and then a business," said the paper's 33-year-old publisher, Jerry Lee. "You know the old wall of China between news and advertising? It's higher here than at most newspapers."

Sometimes his sales reps approach him, and say advertisers tell them that another paper offers "pseudo-stories," and wonder if the Daily Journal will do the same.

"My answer is, 'No, because we're a real newspaper,'" Mr. Lee said. "Readers sometimes read the paper hurriedly, and there are also senior citizens and non-English-speaking readers who utilize our paper, and we don't want to take advantage of them. Our most valuable asset is our integrity and that's the reason that we're still here."

What do you think? Discuss it in The Coffeehouse.


A project of the School of Journalism and Mass Communications at San Jose State University, Grade the News is affiliated with the Graduate Program in Journalism at Stanford University and KTEH, public television in Silicon Valley.

Monitoring the Bay Area's most popular news media:

Contra Costa Times

Knight Ridder

San Francisco Chronicle


San Jose Mercury News

Knight Ridder

KTVU, Oakland (FOX)

KTVU, Oakland (FOX)

KRON, San Francisco

KRON, San Francisco

KPIX, San Francisco (CBS)

KPIX, San Francisco (CBS)

KGO, San Francisco (ABC)

KGO, San Francisco (ABC)

KNTV, San Jose (NBC)

KNTV, San Jose (NBC)


Bay Area media advocates:

Media Alliance
Center for the Integration and Improvement of Journalism at SFSU
Maynard Institute
Youth Media Council
Project Censored
New California Media
Society of Professional Journalists, Northern California chapter
National Writers Union Bay Area chapter

Site highlights


The three-part series follows the rise of three Bay Area handouts:
• Part 1: At free dailies, advertisers sometimes call the shots
• Part 2: Free daily papers: more local but often superficial
• Part 3: Free papers' growth threatens traditional news
• See also: SF Examiner and Independent agree to end payola restaurant reviews
• And: The free tabloid that wasn't: East Bay's aborted Daily Flash


Lou Alexander started a firestorm with his original guest commentary predicting the company would be sold. Several other experts on newspapers have weighed in:
Newspapers can't cut their way back into Wall Street investors' hearts, by Stephen R. Lacy; Alexander responds
Humbler profits won't encourage buyouts, by John Morton; Alexander responds
Newspapers can't maintain monopoly profits because they've lost their monopolies, by Philip Meyer
Knight Ridder in grave jeopardy, by Lou Alexander...


Leakers and plumbers: There's no difference between a good leak and a bad leak? Journalists need a shield law. 11/22/05
Unintended consequences: How Craigslist and similar services are sucking revenue from faltering newspapers. 9/13/05
Is CPB irrelevant? As Congress moves to cut public broadcasting funds, has CPB become obsolete in the modern marketplace. 6/26/05
The paradox of news: There's more news available and its cheaper than ever before, but fewer young people are interested. 5/12/05


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