Government Advertising: The 7 Principles

After studying programs of this sort worldwide, we have concluded that successful programs have specific characteristics. We have divided these into “must haves” and “should consider,” with the latter group being options we’ve seen work in some circumstances and which may not be appropriate depending on the locality. 

Any legislation should include these elements:

Defining “Local”

Each proposal must have a definition of the types of newsrooms that are eligible.  Although there are a few ways to describe local, we think the best are:

–A publication that employs at least one full-time reporter covering a geographic community plus one of these criteria:

• Digital publication: has at least 33 percent of its audience within the area
• Print: either holds a valid United States Postal Service Periodicals Permit or at least 25 percent of its content is local news
• TV & Radio: Holds Federal Communications Commission license operating in a local area
• Nonprofit: Has a 501c3 approval from the Internal Revenue Service for an entity whose stated mission is to cover the community or state

More examples in the “optional” section and Resources area

Determining Appropriate News Outlets

• An organization that engages professionals to create, edit, produce, and distribute original content concerning local or state matters of public interest through reporting activities, including conducting interviews, observing current events, or analyzing documents and other information. 
• The organization must have at least one full-time employee or owner (30 hours a week or more), including founders/editors, dedicated to providing local coverage and living within 50 miles of the coverage area. That employee must gather, prepare, collect, photograph, write, edit, report, or publish original local news for dissemination to the local community.
• In the case of print publications, the publication has to have been published at least once per month in the previous 12 months. 
• In the case of a digital-only publication, it must have been published regularly (at least one piece a week) for at least 12 months before consideration.
• In the case of 501c3 organizations, they must have declared the coverage of the local community as a stated mission in their mission statement to the IRS.
• The publication discloses its ownership on its website or, in the case of a nonprofit, the board of directors.
• The entity owning the publication does not receive more than 50 percent of its gross receipts for the previous year from “disqualified organizations,” which include political action committees or other entities described in section 527 of the Internal Revenue Code and 501c4, c5, or c6 organizations. 

Alternative certification 

A news outlet is also eligible if they cover a local area and have full certification from the Journalism Trust Initiative or a 75 percent or higher rating from NewsGuard.

Determining the Right Percentage

Setting the right target should ideally be guided by an understanding of current government advertising patterns. In general, at least half of the overall spending should go to local news organizations – and further efforts should be made to make sure that the advertising buys spread down to smaller players. In some cases, the state might be spending 50 percent on local outlets but providing most to just a handful of large players. In such cases, policymakers might consider setting the percentage even higher than 50 percent, or adding a second target for “community and ethnic media” or for news organizations below a certain size. Example: “50% for local, with at least 25% for community and ethnic.” One California bill said the 50 percent should go to local media below a certain size (250 employees).

You might also consider these ideas:

Target government advertising toward underserved communities (such as ethnic communities) instead of, or in addition to, local ones. New York City’s original executive order declared: 

“For the purposes of this Order, the term ‘community and ethnic media’ shall mean any print or digital publication that is created for communities of people based on native language, race, color, gender, national origin, ethnicity, religion, sexual orientation, disability or immigrant status; targets a discrete neighborhood, or a geographic region, or a population that may or may not typically receive information from mainstream publications because of their exclusive use of foreign language; or falls within specifically tailored subject matter as determined by the New York City’s Mayor’s Office.”

Limit the set-aside pool to smaller newsrooms. If the community restricts this benefit to smaller media outlets, they might cap newsroom size, such as the number of employees or the outlet’s revenue. Larger news organizations would, of course, still be eligible for the other half. Another option is to have, say, 50% of advertising go to local with half of that group going to smaller publications.

Limit it to entities that are locally owned or controlled. Some communities have limited the program to publications owned in that area or, in the case of a 501c3, based there. Others avoid such restrictions because it rules out critical local publications owned by national chains. Such rules could also have exceptions, such as for non-English speaking media.

Require a higher percentage of editorial content. In some localities, postal permits are granted to newspapers that devote at least 25 percent of pages to editorial content. Some countries have required a higher percentage (One nation went as high as 75 percent).

Peg the definition to “periodical postal permits.” In order to get a lower mailing rate, most newspapers have to get a “postal permit.” So for print newspapers, lawmakers could peg eligibility to whether the entity has a postal permit.

Restrict advertising during election season. To avoid even the appearance of using government funds to favor newspapers, consider not running government advertising during the 30 days before an election.

Stop newsrooms from getting too much revenue from a particular part of the government. Newspapers should be wary of getting too much revenue from any single source—whether a specific private advertiser or the government itself. The rules could conceivably forbid ads from going to publications that get too big a percentage of their income from a particular government agency, or managers could simply offer that as advice to the publications.

Make it a goal rather than a requirement. We strongly prefer a requirement to a goal. But in some cases, this may be the best that can be done, and it is worth doing if that’s the only choice. In such cases, it becomes crucial that independent groups watchdog the results carefully and strictly enforce transparency requirements.

Include TV and Radio. New York City’s original executive order required 50% of digital and print advertising to go to community and ethnic media. But the follow-up law shifted the approach, making the 50% a goal, not a requirement, but putting against the entire  (much larger) advertising budget, including advertising in TV and radio. The result was that the percent of money going to small publications went down but the raw dollar amount went up.  Each state will need to look at how marketing budgets are currently set up to determine the best approach. In some cases, it may be better to have a lower percentage but a bigger pool. If TV and radio are eligible, the most logical eligibility requirement is to tie to them having licenses with the Federal Communications Commission.

Require the state official to be in a particular department. In New York, the position overseeing the program is lodged in the Mayor’s office. That has so far worked well but there are risks to having the program management too close to the political center of gravity. We recommend a two-tiered system: a person in the Governor’s office charged with making sure the policy is implemented while the actual decisions about advertising spending vested in either the economic development department or the individual agencies. And all of this should be overseen by a third party watchdog.

Implement this approach only at the state or very-big-city level.  There have been numerous cases of county governments attempting to reward or punish news outlets for unfavorable news coverage by withdrawing legal notices. We fear the same thing could happen with government ad set-asides carelessly implemented at the county, town or small city level.  The risk may grow as the size of the community gets smaller as it’ more likely to be government officials directly controlling ad decisions related to publications covering that same official. Some smaller government units may have less transparent procurement processes. Consequently, those considering trying an ad set aside at a city or county level should make double sure that there are independent third party watchdog groups and strong disclosure rules. In addition, any law should explicitly prohibit decision making to reward or punish editorial coverage.

To make these programs effective—and First Amendment friendly—there must be an independent third party helping to watch over things. In the case of New York City, the Center for Community Media at the Craig Newmark School of Journalism of the City University of New York played a crucial role. They initiated the Advertising Boost Initiative (ABI) to implement the program, creating a list of eligible organizations and helping publishers prepare to receive ads. And they did an oversight report on how it was going. In Chicago, this role is being played by an independent nonprofit group, the Chicago Independent Media Alliance (CIMA), led by figures with deep roots in Chicago local media, so stakeholders were highly trusted.

The criteria should be published on the website of the city agency implementing the program and on the third party’s site helping to monitor and enforce the program. Each year, the government should also publish:

• The list of eligible media institutions
• Ad spending by each agency
• The media outlet and ad agency recipients of the spending 
• Breakdowns by key categories (national vs. local, by platform)

The government should provide an appeals process in which news organizations can fight exclusion from the list or the decision of the city not to advertise with a publication. On request, the city or the advertising vendor must justify why a particular publication wasn’t included in the list or why media buyers declined to advertise in that publication. The public should also have a process through which they can make complaints.

In addition to the third-party review, an independent part of the government (such as the comptroller’s office) should review the program. For example, in Connecticut, a yet-to-be-passed state bill tapped the Department of Administrative Services to administer and measure the effects of the policy. In Austria, the Auditor-General did this thorough review.

This may seem obvious, but putting the sentiment into the law is essential to build public confidence in the program and defend against the misappropriation of taxpayer funds. 

Each city or state must decide whether the government office should administer a city’s advertising-in-community-outlets program. New York established an office of community media within the Mayor’s office. The proximity to the mayor’s office could make it easier to enforce the set-aside. However, that proximity to the most political place in city government also may heighten the risk of political manipulation. And a new office may add administrative costs. Other possibilities might include the economic development offices or the departments that deal with procurement or administrative services. The choice requires a delicate balance, ensuring adequate enforcement without compromising the integrity of the process.

While it sometimes makes sense to start with an executive order—it’s faster—it should be followed up with a law or resolution, including language prohibiting politically-motivated decisions. That makes it harder for subsequently elected officials to rescind the order and helps build more public support for the project.

If there isn’t a relatively simple way to place ads, then media buyers will resist advertising in local media. In some cases, the state press associations have set up ad exchanges to make it easy. For instance, in Colorado, businesses that want to place ads in newspapers throughout the state can use the ad network set up by the Colorado Press Association. If no mechanism exists, the independent third-party group may need to help create one and help newsrooms upgrade their technology. 

It should be clear who is behind any government-financed ad. 

Government agencies must be able to spend their advertising dollars to achieve their marketing missions. No news organization has a right to the pie or even a slice. Instead, qualifying news organizations have a right to be considered for government advertising under this law. As a result, it will usually be the case that ad funds will not be spread equally or proportionally, as the government may need to reach particular communities more than others, depending on the ad campaign. Certain government agencies will likely be exempted from spending money on local news outlets, such as tourism or economic development agencies, whose job is attracting business from outside a community.

However, we believe that supporting local news benefits communities and democracy. So, we endorse the idea that “a tie goes to local.” If an agency has multiple ways of reaching its objectives, it should select local options.