Fake TV News

As more newspapers and other media outlets cut staff, public relations and advertising make gains. The Minnesota-based firm ARAnet provides "free print and Web content. ... More than 65 of the nation's top 100 newspapers, including the Star Tribune, use" ARAnet content, which "carries client messages." ARAnet president Scott Severson says his firm provides "high-quality consumer content" that "just happen[s] to be underwritten by our clients." ARAnet clients pay $4,500 for content creation, tracking and reporting; media outlets use it for free. One ARAnet article "offered to auto sections" was sponsored by Lexus. Severson explains, "The article was about safety systems and mentioned Lexus. The best advertising doesn't look like advertising." It also doesn't carry clear disclosure. ARAnet's "online articles typically are identified as sponsored content," but its "print articles merely carry an 'ARA' designation, similar to the 'AP' identifier that runs with Associated Press articles." Other ARAnet clients include Home Depot, Microsoft, Best Buy and UPS.

Medialink Worldwide -- the largest producer of fake news products such as video news releases (VNRs) -- is in financial meltdown. Almost two years ago the Center for Media and Democracy reported that Medialink had placed its faith in selling off assets, trying to boost international income and investing in the digital watermarking system Teletrax. The company's latest quarterly report reveals that, faced with accelerating losses, the company has agreed to sell Teletrax to Philips Electronics and sold "certain assets of its UK-based media communications services operation" to World Television Group. Not surprisingly, Medialink's share price has collapsed to an all-time low of just 30 cents, down from $3.65 at the start of the year. PR Week reports that, according to industry sources, Medialink is "considering offering itself up for sale."

"Two cups of McDonald's iced coffee (BUY!) sit on the Fox 5 TV news desk" during Las Vegas station KVVU's morning news show, writes Abigail Goldman. It's a "punch-you-in-the-face product placement" that will last six months. KVVU's news director says the "nontraditional revenue source" won't impact his station's reporting. But an executive with the marketing firm that negotiated the deal, Omnicom's Karsh/Hagan, said "the coffee cups would most likely be whisked away if KVVU chooses to report a negative story about McDonald's," reports the New York Times. McDonald's has similar product placement arrangements with "WFLD in Chicago, which is owned and operated by Fox; on KCPQ in Seattle, a Fox affiliate owned by the Tribune Company; and on Univision 41 in New York City." Other stations owned by KVVU parent Meredith Corporation, "including WFSB, the CBS affiliate in Hartford, Conn., and WGCL, the CBS affiliate in Atlanta -- are also accepting product placements on their morning shows." The Writers Guild of America West recently urged the Federal Communications Commission to require "real-time disclosure" of product placements and to ban video news releases, calling VNRs "an attempt to trick the viewer to think that a paid advertisement is actually news."

From the Army's 2006 All-American BowlHow can you counter "daily stories and blog entries that portray the negative aspects of joining the military"? That was PR firm Weber Shandwick's job in the lead-up to the U.S. Army All-American Bowl in January 2008. For the 11 month, $342,000 PR campaign, Weber Shandwick paired "athletes with local Army members for bowl-watching parties and football and Army skills competitions, creating feature-story opportunities." Weber Shandwick and the Army "contacted Army bases in the regions where the players are from. The Army also named a soldier as an All-American Bowl hero for every player selected for the game and honored them during the pre-game ceremony. ... The Army also released practice footage of the players to local media in regions where they reside, and profiled players to publications targeted at specific multicultural demographics." The Army was happy enough with the resulting 3,600 media hits and high message penetration -- "partially due to a successful radio news release" -- that it hired Weber Shandwick to promote its 2009 All-American Bowl.

Companies, government bodies and not-for-profit organizations have been using video news releases (VNRs) in Australia since 1995, reports Sally Jackson. The practice began when former journalist turned public relations executive Jonathan Raymond started an Australian affiliate of Medialink, the U.S.-based VNR producer. Jackson noted that the Australian media's practice of using VNRs "receives little attention" and "TV news bosses are keen to downplay their use of VNRs." Raymond scoffs at these denials. "Our material is used in 99 per cent of cases," he told Jackson. Recent examples of VNR use in Australia include a network broadcast that relied on footage supplied by drugmaker Eli Lilly to promote its erectile dysfunction drug, an item extolling meat pies, and a plug for an anti-obesity drug.

As we have reported previously, Medialink Worldwide -- the largest producer of fake news products such as video news releases (VNRs) and audio news releases (ANRs) -- has fallen out of favor with investors. On May 27, the company's stock closed at just 89 cents. "NASDAQ rules require companies to maintain a minimum closing bid of $1 per share. Failure to do so for 30 consecutive business days runs the risk of delisting," writes Tonya Garcia in PR Week. Medialink Chief Financial Officer Kenneth Torosian attributes the share price crash to the recent sale of 900,000 shares by Pequot Capital. However, the company's shares have been falling consistently over the last year, dropping by 75 percent since the beginning of 2008. At the end of March, Medialink announced that its board had approved a plan to purchase 150,000 of the company's own shares, in a bid to counter "recent volatility in the financial markets."

The Pentagon launched its covert media analyst program in 2002, to sell the Iraq war. Later, it was used to sell an image of progress in Afghanistan, whitewash the U.S. detention center at Guantanamo Bay, and defend the Bush administration's warrantless wiretapping, as David Barstow reported in his New York Times expose.

But the pundits weren't just selling government talking points. As Robert Bevelacqua, William Cowan and Carlton Sherwood enjoyed high-level Pentagon access through the analyst program, their WVC3 Group sought "contracts worth tens of millions to supply body armor and counterintelligence services in Iraq," reported Barstow. Cowan admitted to "push[ing] hard" on a WVC3 contract, during a Pentagon-funded trip to Iraq.

Then there's Pentagon pundit Robert H. Scales Jr. The military firm he co-founded in 2003, Colgen, has an interesting range of clients, from the Central Intelligence Agency and U.S. Special Operations Command, to Pfizer and Syracuse University, to Fox News and National Public Radio.

Of the 27 Pentagon pundits named publicly to date, six are registered as federal lobbyists. That's in addition to the less formal -- and less transparent -- boardroom to war-room influence peddling described above. (There are "more than 75 retired officers" who took part in the Pentagon program overall, according to Barstow.)

The Pentagon pundits' lobbying disclosure forms help chart what can only be called a military-industrial-media complex. They also make clear that war is very good for at least some kinds of business.

Reed Pence of MediaTracks Communications wants his fellow public relations professionals to know there's nothing wrong with "guaranteed placement" -- paying to have radio or television stations air fake news. "Many PR pros face the challenge of acquiring coverage for a product that isn't newsworthy," he writes in a letter to PR Week. "Some believe that [guaranteed placement] is just advertising," but it's not, he claims. "For example, when presented as part of a nationally syndicated radio news program, an audio news release might only have news content surrounding it. Selecting this vehicle eliminates the 'situated among advertisements' concern that listeners might tune the message out." Though Pence suggests using guaranteed placement for "stories with less news value," he also claims that stations air the guaranteed spots "not because they are paid to do so, but because the programs provide a service to listeners."

The giant of the fake news business, Medialink Worldwide, has fallen out of favor with investors. In the last year the company's share price has plummeted from $5.81 to its current level around the $1.70 mark. In its latest annual report, the company glumly states that sales in 2007 in the U.S. from its "media communications services" -- which includes the production of video news releases (VNRs) and audio news releases (ANRs) -- dropped by 4.8% compared to 2006. The only upside was that revenue from fake news grew by 28% from its United Kingdom office. Despite this, the company recorded a net loss of just over $4.6 million on revenues of $33.4 million. Medialink notes that while Federal Communications Commission action enforcing on-air disclosure of the sponsors of VNRs and ANRs would not preclude their use, it "could have the effect of reducing the number of broadcasters that air our clients' material." The FCC acted in response to CMD's Stop Fake News campaign.

"The 25 most media-prominent think tanks were cited 17 percent less in 2007 than they were the year before," according to an annual survey by Fairness and Accuracy in Reporting (FAIR). "The overall ideological breakdown was the same ... 47 percent of citations went to centrist think tanks, 37 percent to conservative or right-leaning think tanks, and 16 percent to progressive or left-leaning think tanks." The downward trend "is not necessarily a bad thing. ... Given that FAIR's surveys have consistently found that these supposedly detached experts actually tilt toward the center-right, fewer of them spinning and shaping news coverage may be a net plus for media transparency, if not diversity." The current issue of FAIR's magazine "Extra!" also contains the group's annual "Fear & Favor" report. Among the news outlets mentioned is Portland's KOIN-TV, which CMD documented airing a video news release. KOIN merited mention for its "weekly medical report," which is sponsored by Providence Health Systems and consistently features Providence experts and information.