MEDIA FORUM: How has scandal damaged The New York Times?

Was the recent scandal at The New York Times overplayed or do advertisers think the title has been irreparably harmed, Alasdair Reid asks.

Most UK media commentators have been perplexed and somewhat disturbed by The New York Times affair. This is a brouhaha we'd love to be all ironic and superior about - but clearly we can't. While we happily mock the superficiality and insincerity of American culture, we can hardly begin to imagine a major public scandal unfolding from the fact that a newspaper journalist "made up" a story or two.

Crikey. They obviously believe it's the job of journalists (a la Robert Redford and Dustin Hoffman in All The President's Men) to ponce about in white suits in the name of truth and justice. On this side of the Atlantic we perhaps take a more robust view - though there was a similar wailing and a gnashing of teeth in France when Le Monde's integrity was called into question recently. Our newspapers are so driven by propaganda on the one hand and feeble entertainment values on the other, that we can be forgiven for struggling with this one. Since when was the newspaper business supposed to be remotely legal, decent, honest and truthful?

Jayson Blair, the journalist at the centre of The New York Times furore, would be one to watch over here. He'd most likely be encouraged to keep cobbling together bits he'd stolen from other media reports and adding in others he'd made up off the top of his head, his brain lightly fried due to a liberal intake of cocaine and alcohol. Over there, his detection and confession was swiftly followed by his resignation and he was denounced in the highest of high moral tones. Not only that but other resignations followed - notably the paper's managing editor, Gerald Boyd, followed by the executive editor, Howell Raines.

But did the saga have much of an impact on the brand and have advertisers become more reluctant to use the paper?

Arthur Sulzberger Jr, the publisher of The New York Times and the chairman of The New York Times Company, said he was saddened by the two most senior editorial departures but added: "While the past few weeks have been difficult, we remain steadfast in our commitment to our employees, our readers and advertisers to produce the best newspaper we can by adhering to the highest standards of integrity and journalism. For nearly 152 years, The Times has devoted itself to this mission. With the efforts of our outstanding staff, we believe we can raise our level of excellence even higher."

But isn't this a bit much given we're talking about a regional paper in a city a couple of hundred miles from the capital? It's basically America's Yorkshire Post, isn't it? Well, not quite. Its circulation is 1.1 million through the week and 1.6 million on Sundays and it's the chosen title of the educated and chattering classes the length of the eastern seaboard.

In contrast, The Wall Street Journal is drier than our Financial Times and the Washington Post is basically for political bores.

Rich Hamilton, the chief executive of ZenithOptimedia Group, the Americas, points out that The New York Times has always been regarded as America's pre-eminent paper of record - and it will take a lot to undermine that position. "Traditionally, it has been trusted for its objectivity more than any publication in the US. Clearly, recent events have been a blemish on that. But on a long-term basis, given the corrective action they have taken, I don't think it will affect advertising sales in any substantial way. As egregious as the problem is, they fessed up to it immediately and took immediate action and that is very commendable," he argues.

That action involved a very public admission of guilt, including giving prominent coverage to the story on its own pages. "We have tabloids over here too," Hamilton adds. "And they've been trying to take full advantage of The Times' difficulties but The Times has taken its own problems and put them on the front page too. The people who manage The Times have, I believe, the highest standards of integrity and I think they will emerge from this with their reputation intact."

Well, perhaps. But the New York media scene's ability to close ranks is legendary. David Pattison is ideally placed to give a transatlantic perspective. As the chief executive of PHD Network, he spends three weeks out of four in the US. He says that, ultimately, readers will decide.

He says: "It's the views of the consumer that matter. If the consumer forgives the brand, then the advertiser will forgive the brand, especially if it has a readership profile that advertisers value. I think in the short term, consumers will give The New York Times another chance so, yes, advertisers are unlikely to be worried."

Pattison also argues that consumers are far more sophisticated than we often believe. In fact, somewhat perversely, we can mark down the impact of this sort of scandal (even in the US) because, in general, most consumers are relatively cynical about the integrity of the media they consume.

This sort of thing is just another piece of evidence for them to mull over. And, he adds, one factor will help both consumers and advertisers get over this - there's no real alternative for intelligent, upmarket New Yorkers.

So, maybe the whole thing was somewhat overcooked? "If it had been another newspaper brand it may not have been such a story. But The New York Times has a worldwide reputation," Pattison responds.

Toby Usnik, the newspaper's head of PR, insists there has been no real impact, either in circulation or advertising terms. "Our advertising has remained steady. We have spoken with advertisers and they are supportive of the actions we have taken and impressed with the forthrightness of our response," he says.

And Richard Beaven, the managing director of Coca-Cola AOR at MediaVest in New York, can believe it. He states: "As media brands go, this is one of the strongest. Even for a broadsheet it commands premium-price positioning (in terms of cover price) and its business performance generally is very strong. It is very much focused on news and being the best at it. It is innovative in its marketplace both in terms of new sections and in its online product and there is a strong sense that it is determined to stay ahead in that respect. At the heart of all of that is journalism of the highest quality."

And he concludes: "In the short term, what has happened may have a small impact but longer term it's very unlikely it will have an impact at all. The stock is still rising and I think the lesson we can take from all of this is that you have to take swift action. Some people questioned whether they were right to do what they did but they have been shown to be right in wanting to be as transparent as possible. Anecdotally, the evidence is that the advertising community remains very supportive and you don't hear of many people cancelling their subscription either."