Campaign Report on Worldwide Advertising (IAA Special): Business news prospers in digital age - Real-time services are brushing up their analysis while print media have discovered the Internet. Richard Cook looks at new rivalries in the business market

The man in the street might still scratch his head when you ask what European regulation means to him, but what about the global advertiser? Sometimes there’s just no substitute for the straight facts. Sometimes, in fact, only the news will do. And while many of us like to know what’s happening the moment that it’s happening, businessmen simply need to know.

The man in the street might still scratch his head when you ask

what European regulation means to him, but what about the global


The World Federation of Advertisers’ director general, Bernard

Adriensens, is more certain. ’We want a liberal market in Europe and a

free single market for commercial communication.’ At the extreme,

international advertisers, faced with a patchwork quilt of media

regulations in Europe, could decide to take their money to Asia


European media regulation is minimal but a number of EC green papers

could have a crucial effect on commercial communication. Advertisers and

agencies are trying to retain freedom of commercial speech and ensure

that any regulation is not so draconian that it might get in the way of

a single market approach.

The main piece of EU media regulation to date has been the Television

Without Frontiers directive, introduced in 1989 to remove obstacles to

trans-frontier broadcasting. It contains guidelines on programme

sponsorship, teleshopping and directions for each member state about

drawing up a shortlist of sporting events that should remain free to

air. Member states are allowed to impose stricter rules than those set


Television Without Frontiers still allows enormous discrepancies to

exist between member states. Plenty of new areas of the media

playing-field in Europe are being prodded by the men and women in

Brussels, while complaints about specific infringements of regulations

by member states are waiting to be heard or dismissed by the European

legislative body.

Reassuringly, over the past few years the commission has become more

media- and advertiser-friendly. John Shannon, president of Grey

International, thinks that ’one of the problems that has bedevilled us

for a long time has been a feeling that people in the commission are

thinking about regulations and draft directives without sufficient

knowledge and involvement with some of the realities of the situation’.

But the commission now seems more open to arguments about

self-regulation and scientific methods of evaluating advertising.

At the beginning of March, the commission outlined a series of measures

designed to balance the need for better cross-border commercial

communication with consumer interests, following a green paper on the

issue. It spelled out the enormous number of jobs that new commercial

communications services would bring and the pivotal role marketing

campaigns play in developing new business and funding media. For France,

Germany, the Netherlands and the UK alone, the value of these new

commercial communications services is forecast to grow to as much as

pounds 860 million by 2002. According to Stig Carlson, the director

general of the European Advertising Agencies Association, the measures

have already generated concern among some interest groups because of

their liberal tone.

Carlson welcomes the initiative but, before he gets too excited, he

wants to see headway made on existing infringement cases , including

complaints about the Greek ban on toy advertising and the French Loi

Evin which prohibits alcohol advertising. ’If action isn’t taken by the

commission, why should people think that this is anything other than a

nice new piece of paper?’ he asks. The commission knows that such laws

do not just protect general interests but also have the effect of

protecting domestic producers.

Until recently there was a very real possibility that there would be

further restrictions on advertising to children. But, despite widespread

support in the EU for an outright ban, the freedom to provide services

such as advertising to children has not been changed. Added to which,

the European Court of Justice ruled last year that Sweden’s existing ban

was in contravention of Television Without Frontiers.

Such a liberal standpoint has not been echoed in the EU’s position on

tobacco advertising. It is pushing forward with a ban which Brian

Jacobs, managing director of Carat International, thinks might possibly

create a domino effect. He feels it is good to guard against a climate

of increased regulation. ’It might be possible to ring-fence tobacco but

if you start to fiddle about with, say, children’s advertising, there’s

not much point in having a global communications strategy if it can’t be

implemented across half the world.’

Bans may well be one major obstacle to a realistic global strategy, but

any sort of extra regulation poses another potential problem. One of the

biggest areas for discussion at the commission is the new green paper on

’convergence’, which addresses the issue of regulation in the new-media

age but seems to raise more questions than it answers. It is generally

accepted to be a minefield. Adriensens says: ’You potentially have to

control billions of people. Nobody can do that. How can you regulate

commercial information on the Internet? The only way is to be


One technical solution could be the V-chip, which is introduced for

consideration in Television Without Frontiers. But it is a solution

riddled with problems.

If the concept were adopted it would need a whole new content ratings

system. Adriensens has another reason for dismissing the chip. ’If you

put such a device in the TV set,’ he says, ’the first ones to find a way

of short circuiting the device will be children.’

Transatlantic tensions about how to regulate new media on a global scale

have already appeared after the EU rejected US proposals on the

management of the Internet, pointing out that they could lead to

’permanent pre-eminence of American jurisdiction over the Internet as a


Another phenomenon that goes hand in hand with convergence is the number

of joint ventures and alliances formed across the world to muster the

necessary capital it takes to develop the new-media market. EU

competition policy has had a significant impact. Karel van Miert, the

competition commissioner, has actively prevented those joint ventures he

sees as anti-competitive and with the potential to create super

monopolies, either through controlling the networks, the set-top boxes

which give access to services, or the content.

At the European Newspaper Publishers Association there are concerns that

regulation, in the light of convergence, could bring tighter rules

across from telecoms and broadcasting. Fears that smaller companies may

be absorbed by multi-media giants are balanced by a recognition of the

advantage of developments which could allow them to get into new-media


Ross Biggam, head of European affairs at the ITV Network Centre,

acknowledges that, in this changing environment, investigations into

certain alliances must take their course but he says that the EU should

speed up the process.

The recent scrutiny of the British Digital Broadcasting consortium took

so long that it threatened to put back the launch date of digital

terrestrial for ITV.

Biggam is also relieved about the recent failed commission initiative to

tighten rules on media ownership. A detailed directive would have put

ceilings on the market shares of individual TV companies, newspaper

publishers and on pan-media empire building. It would have capped

audience share in individual sectors, such as TV and publishing, at 30

per cent, and put a 10 per cent ceiling on any one owner’s share of the

media market.

’It is in the advertiser’s interest to have as many outlets to advertise

on as possible,’ Biggam says. ’Any regulation of media ownership should

take that into account, rather than restricting existing people from

setting up new services.’

Liz Workman, executive regional media director at Leo Burnett, says: ’We

welcome competition, it stimulates markets. But being able to resist

monopolistic media owners is important.’

Workman is among those who think it easy to overestimate the practical

impact of EU media regulation. If you are talking about making Europe

more competitive as an attractive single market to buy media space, then

there is only so much difference an EC directive can make. First, there

are only 15 EU member states, while there are 25 states in Europe.

Second, as Workman says, ’In the end, media are fundamentally local. We

believe in local with a global (or regional) umbrella. The whole basis

of negotiation is on relationships.’ Added to which, ’The German

housewife is not the same as the Italian housewife, so I’m going to buy

them in very different ways.’

Her first concern regarding the discrepancies that exist across the EU

is the minutage mess. ’There is a guideline which some people are

adopting and other people aren’t,’ Workman says. The guideline is

written down in the Television Without Frontiers directive, which puts

an upper limit of 15 per cent of all airtime which can be filled with

spot advertising, and 20 per cent in any given hour. But it is not

enforced - member states are freely allowed to come in under that time

and some give a good impression of coming in well over. Workman isn’t

the first to suggest that if UK broadcasters were to up the percentage,

it might counter concerns about media inflation. In other countries it

might improve quality if a few minutes were taken off the total. ’Look

at Italy, where there is vast clutter. A huge number of messages are

being hurled out at the viewer every day,’ Workman says.

Minutage is just one example of how difficult it is to regulate on a

pan-European scale effectively. Other areas of media throw up their own

set of questions. While reviewing the issue of commercial

communications, the commission decided to examine a number of areas,

including the sponsorship industry. It commissioned the sports law firm,

Townleys, to conduct independent original research into the sponsorship


Jacqueline Lawrence, a lawyer at Townleys, says that ’at the very least

there is a state of uncertainty among many parties regarding the

potential impact of different market regulations upon their sponsorship

programmes, and the extent to which their sponsorship association can be

fully exploited in different countries’. The industry in the UK, widely

acknowledged to be the most sophisticated sponsorship market in Europe,

is largely self-regulated. But in France and Germany there are

legislative controls and the Scandinavian countries tend to adopt a

mixed approach to regulation.

The advertising community welcomes the fact that the commission has an

ear to industry research and is on the media learning curve. But at the

same time as publishing its new measures on commercial communication -

which state that it intends to continue upward on the learning curve and

seem to suggest a more liberal philosophy - the EU is also considering

tightening up codes relating to car advertising. The British presidency

is calling for new rules to be introduced in member states by the end of

June, as part of an initiative to improve road safety. ’While the

industry said it was a wonderful objective,’ Carlson explains, ’we do

not see any proven direct link between advertising content, or the

content of brand advertising, and road safety.’

Bernard Barnett, executive vice-president and director of corporate

affairs, Europe, for Young & Rubicam, and chairman of the International

Agencies Committee at the EAAA, defines the agency point of view:

’Anything that’s legal to buy should be legal to advertise.’ He also

welcomes the friendly face of the EU but with reservations, mindful of

the large influence that special interest groups have on the hearts and

minds of the policy makers.

’There is a willingness to listen and to make up their minds on the

basis of facts. Our hope is that where regulations are put together they

will be based on objective evidence rather than political dogma.’

Sometimes there’s just no substitute for the straight facts.

Sometimes, in fact, only the news will do. And while many of us like to

know what’s happening the moment that it’s happening, businessmen simply

need to know.

When the Asian markets, for example, go into freefall, western traders

can watch it happen on the screens in front of them in real time. The

businessman in London who is resigned to wait for his copy of the Asian

Wall Street Journal to arrive by surface mail might feel he needs to

know more quickly. Nowhere, in short, is the encroachment of digital

media on to traditional print publications more keenly felt than in the

business sphere, where the term global markets is not some futuristic

pipe dream, but a reality of day-to-day life.

The success of the real-time business news and information services such

as Bloomberg and Reuters bears testimony to the reality of that


But this uneasy relationship between the digital and printed worlds

seems to be shifting. For several years the two sides of the business

publishing coin have known their place in the overall scheme of things.

According to the conventional wisdom, printed business matter is for

opinion and comment on the events of the day, week or fortnight; digital

is for the real-time transference of news, all the time, as it happens,

around the clock, around the world. But this convenient shorthand

distinction is becoming increasingly hazy.

Relative newcomers such as Bloomberg are trying to erode the traditional

printed media’s point of difference, by leveraging their own lead in

information provision into a lead in precisely that area that business

magazines and newspapers have long claimed as their own - intelligent


Bloomberg is even trying to convert the success of its innovative

real-time financial data provision service - delivered 24 hours a day to

more than 250,000 financial professionals and organisations worldwide -

into the mainstream media. Bloomberg TV broadcasts around the world in

seven languages. The New York radio station, Bloomberg News Radio

(WBBR), has more than 100 affiliates worldwide. A wire service,

Bloomberg News, provides business news to more than 850 newspapers,

while Bloomberg Magazine’s average reader is 34 with an average personal

income of pounds 80,000. Its circulation of 180,000 might not be causing

the Economist too many sleepless nights, but it is growing at an

accelerated rate.

So far, though, it’s been something of a paradox of this digital age

that the printed business titles have continued to prosper as well. The

Economist’s worldwide circulation has almost doubled over the last

decade and the magazine now has a worldwide readership figure of around

two-and-a-half million. Fortune and Business Week have enjoyed similar

record-breaking spells and the Wall Street Journal can now claim a total

paid worldwide circulation of more than nine million.

’We look on our interactive arm as a supplement to the analysis in the

magazine, and tend to think that other digital or electronic business

news is doing a rather different job,’ explains the Economist’s Website

master, Peter Sonderskov. ’So, for example, we don’t have new editorial

up on the Net - news here is the product of discussion - that is our

point of difference, and that is something you can’t do on a daily

basis. Where the online edition can add value is in more research-based

areas: in its ability to archive material, so that readers can look up

old stories.

We also can gather together reports and group articles by subject matter

to make life easier for people trawling through the archives.

’What print publishers are wary of is the cannibalisation of their

readers or their advertisers by a new-media department that is supposed

to be complementing them. But we really don’t see that we are competing

with the Bloombergs or the Reuters. That need for real-time information

provision has always been there and always will be there, we just hope

that the demand for our opinion of that news will always be there


Other publishers view the connection between the printed and the digital

transference of information differently. The Wall Street Journal has

been at the forefront of a digital fightback by certain publishers of

the printed product - as perhaps befits an organisation whose history

and experience straddles both camps. The Wall Street Journal Interactive

has its own dedicated team of more than 50 editors and reporters, while

Dow Jones Interactive makes use of the 730 full-time reporters and

editors that work on the Dow Jones real-time economic and financial news


’Well, we actually started out as a sort of pre-digital news provider

with telegraph wires over a hundred years ago,’ Dow Jones’s director of

digital services, Mary McCall, points out. ’But the most important thing

is that we recognise that different customers want their financial news

and comment in different ways. How we give them that information doesn’t

much matter to us, whether it’s through the printed version of the

Journal, through the Wall Street Journal Interactive or through Dow

Jones Interactive. We make sure there isn’t any cannibalisation of our

reader by making the products different, and making sure that the

digital products have their own separate editorial teams.’

So far the strategy appears to be paying off handsomely. The Wall Street

Journal Interactive has well in advance of 150,000 paying subscribers,

making it the single largest paid subscriber site on the Web and one of

its top advertising destinations. Moreover, the digital editions are

bringing the content to an entirely new, younger market.

’Wall Street Interactive is bringing a completely new audience to us,’

McCall says, ’people who might have thought that it was some sort of

dull, grey paper but who - because they think the Web is cool - are

prepared to give the online version a go. We have identified a new

audience for interactive or digital business news and comment, of people

who just wouldn’t consider buying the printed version of any title. I

think it’s a huge mistake for publishers not to try to talk to this

market and to use it to drive product development.’

The increasing closeness between the printed and digital forms of news

provision can be seen more closely by looking at the evolution of the

Dow Jones Interactive service. Although conceived as a corporate tool,

it is user-friendly and aims to appeal to a wider audience.

’The crucial difference came when we made it accessible from a normal

computer browser,’ McCall explains, ’because then we didn’t have to send

anything out to people before they could get started. Now the end-user

can feel comfortable working with the service. It still has all the

access that the professional information-gathering service needs, but

now business people who want to take some of that burden themselves find

it quite comfortable and easy to use. The difference is that now they

will be finding something - not just searching.’

Other publishers have tackled the relationship with the digital media in

different ways. Business Week has designed its own interactive version

as more than merely an extension of its printed version, and has, the

company says, invested heavily in creating a discrete digital


In addition to daily news flashes and daily market information from

Standard & Poor’s Marketscope, the service offers a fee-based archive

retrieval system, a personal investment portfolio tracker and BW

RadioNet, an hourly service of market and business updates in real


Fortune is another magazine that has used its Internet edition to add

value to the print-based product, although it does not place too much

confidence in the sway that digital data holds over its relatively

leaden-footed print-based rival. ’I can remember as far back as 1985

when it became clear that financial information of all kinds was moving

towards a digital age. Everyone then was waiting for this to change the

financial world overnight. The trouble is they are still waiting,’

Fortune Europe’s managing director, Michael Weatherseed, argues.

’In truth the digital sphere is very new and all the publishers are

still experimenting with it. And the reason it’s taking time for the

best response to become clear is because everyone is worried about

cannibalising sales of the core product, the magazine. But as far as the

evidence goes, and it’s difficult to do detailed research in this area,

that really isn’t happening. Our magazine comes out every fortnight so

it’s not competing with business news providers at all, and while we

have daily news on the Website, it’s just soundbites on a few of the

most important stories. Anybody who just needs business information is

going to go somewhere else. What we are offering on the Web, as in our

magazines, is our own take on events.’

By going on the Web, Fortune is also hoping to offer an extra service to

its existing magazine subscribers, while at the same time providing a

useful shop window for potential new readers of the print product.

Browsing is free but the title charges if people want, for example, to

download the Fortune 500 list. The Web offers potential subscribers,

especially in Europe where penetration is low, an opportunity to sample

the tone of the editorial and to get acquainted with the brand. In other

words, digital delivery has become an important evangelical tool as the

magazine struggles to establish itself as a truly global brand.

Although publishers are still for the most part wary of devaluing their

core product, the convergence already apparent is likely only to be the

beginning. ’In the end, it’s the message that’s important,’ McCall

stresses, ’not the medium.’