China is notorious for censoring politically delicate news coverage. But it is more than willing to let flattering news about Western and Asian businesses appear in print and broadcast media — if the price is right.
Want a profile of your chief executive to appear in the Chinese version of Esquire? That will be about US$20,000 a page, according to the advertising department of the magazine, which has a licensing agreement with the Hearst Corp in the US.
Need to get your top executive on a news program by state-run China Central Television? US$4,000 a minute, says a network consultant who arranges
Photo: Bloomberg
such appearances.
A flattering article about your company in Workers’ Daily, the Communist Party’s propaganda newspaper? About US$1 per Chinese character, the paper’s advertising agent said.
Though Chinese laws and regulations ban paid promotional material that is not labeled as such, the practice is so widespread that many publications and broadcasters even have rate cards listing news-for-
sale prices.
And while Western companies and many Chinese journalists are loath to discuss the subject, public relations and advertising firms are sometimes surprisingly candid about their roles as brokers in buying flattering coverage, referred to here as “soft news” or “paid news.”
Ogilvy & Mather, one of the world’s biggest public relations and advertising agencies, acknowledged that it pays Chinese media outlets for client coverage in some categories.
“Our policy is to advise our clients to not participate in such activities,” the agency’s Beijing office wrote in an e-mail message, in response to a reporter’s questions. “However, in some industries, such as luxury, the practice of soft news placements is very common so this is something that we have also done before.”
A Chinese account manager for another US public relations firm was strikingly frank about paying for coverage, although she spoke only on condition of anonymity to avoid riling her industry colleagues and her employer.
“If you want more media coverage, that’s easy to do — we have plenty of channels to get your company shown on television, and in top magazines and newspapers,” she said in a telephone interview.
Media specialists, and Chinese journalists intent on playing by ethical rules, deplore the paid placements they say are all too common in the nation’s media.
“Corruption has become a lifestyle in today’s China,” said Sun Xupei (孫旭培), a journalism fellow at the Chinese Academy of Social Sciences in Beijing. “But when it happens in journalism it’s even worse than other fields, because people feel there’s nothing they can really trust.”
Executives at the Chinese-language version of Esquire magazine say they regularly publish soft news features that are essentially ads masquerading as news.
One example was a feature about a European audio company, Bang & Olufsen, that supplies equipment to Audi, the automaker. Nothing in the magazine indicated that the Chinese Esquire had been paid to run it.
But the magazine received at least US$10,000 a page for the five-page feature, according to the publication’s executives, who e-mailed images of it as an example of the paid genre. They, and others who helped produce the article, said Audi was involved in the payment. A spokesman in China for Audi declined to comment.
Cheryl Sim, a Bang & Olufsen spokeswoman in the company’s Singapore office, said it was not the company’s practice to pay for news coverage. “We certainly did not pay in this Esquire case,” she said. “But we’ll look into the matter.” The Hearst Corp declined to comment.
Not all business and company profiles in Chinese media are planted and paid for, of course. But even when they are not, Chinese media organizations often have much laxer rules than many mainstream Western journalists for accepting payments from sources for news coverage.
The highly regarded Chinese newspaper, 21st Century Business Herald, which is better known for its investigative reporting, recently ran an interview with Christophe Navarre, chief executive of the French wine and spirits maker Moet Hennessy.
The article appeared after the company, with the help of Ruder Finn, a US public relations firm, agreed to pay the airfare, lodging and food costs for nine journalists, including one from the 21st Century paper, to visit Moet Hennessy’s chateau in western China. Of the media organizations that rode along, only the international news agency Reuters paid its own travel and other costs, Ruder Finn said.
Moet Hennessy and Ruder Finn, however, insist they did not make any other payments to entice coverage. “Although we know it’s a normal practice in China, we never pay the media,” said Jean-Michel Dumont, chairman of Ruder Finn Asia.
China is not alone in bending boundaries. Media outlets in Europe, Japan, the Philippines, Latin America and even the US may venture into various gray areas, encouraging companies to pay for journalists’ travel or underwriting favorable reporting or agreeing to take out advertising packages in exchange for coverage.
But media specialists say nowhere are such quid pro quos as common and as aggressively pursued as in China — to the frustration of Chinese business executives.
“If one of my companies came up with a cure for cancer, I still couldn’t get any journalists to come to the press conference without promising them a huge envelope filled with cash,” said one Shanghai-based private equity investor, insisting that he not to be named because he feared journalists would boycott covering his companies altogether.
Six big US companies that operate in China, including Ford and General Motors, declined to comment for this article about the Chinese practice of paying for coverage. So did the US Chamber of Commerce in Shanghai, which represents many of the biggest US companies operating in China. None of the six companies have been accused of making the payments.
If US multinationals made off-the-books payments directly to Chinese reporters, editors or producers, rather than simply buying space or air time through media agencies, the US companies could be at risk of violating the US Foreign Corrupt Practices Act. The law prohibits people working for US companies that operate abroad from paying bribes or making corrupt payments to foreign officials to obtain or keep business or obtain other business advantages. It is unclear whether any Americans have been prosecuted on suspicion of paying journalists in China or elsewhere.
“Journalists are considered government officials because generally all the press is government-controlled in China,” said Lesli Ligorner, a Shanghai-based lawyer at Simmons & Simmons, an international law firm. “So making an illicit payment to a journalist would be an Foreign Corrupt Practices Act violation.”
Such payments also violate Chinese law. China’s propaganda authorities prohibit news outlets and journalists from accepting payments to cover news conferences or to publish news. Accepting secret payments can also be prosecuted under the nation’s laws against bribery, and some case have been. Convictions can result in prison sentences.
But so much money is sloshing around, analysts say, that enforcement is rare in China. Instead, the government occasionally issues general warnings, which go widely ignored.
Newspaper and magazine advertising departments continue to openly discuss their rates — even when a researcher making inquiries identifies herself as working for the New York Times.
“If your company’s boss wants to be shown twice, in an audience seat, for a total of five seconds, the average price is US$5,000 on some popular news programs,” said Wang Limin, an account manager at Yashi Media, a Beijing agency that helps companies obtain coverage in print and broadcast media.
“If your boss wants to comment on something brief and we shoot him in a news program for 15 seconds, it would be US$9,000. And if your boss wants an exclusive interview for 10 minutes, the rate is much higher.”
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