Companies Take Ads For ‘Spin’

By: Todd Shields

Front pages last week carried hair-raising articles about questionable practices at accounting firm Andersen. For newspaper advertising executives, however, the story peaked on inside pages, where Andersen purchased ads to tell its side of the Enron Corp. audits-gone-bad scandal.

On the West Coast, another company jumped into a fray in a very public way, as Pacific Gas and Electric Co. and its parent PG&E Corp. bought ads to criticize a lawsuit filed by California’s attorney general.

The fledgling campaigns reflect a truism: Bad times for companies can bring good things to life for newspapers, as troubled firms buy space to get their messages out. The defensive stratagem, hardly a new one, may be gaining in prominence.

“I think the public has come to expect that companies will address them directly to apologize [or] explain,” said Paul Holmes, editor of the weekly “Holmes Report,” which covers public relations. “It’s not necessarily a new phenomenon. But I do think it’s become de rigueur over the last year or so.”

Andersen — in full-page ads in The Wall Street Journal, The New York Times, and The Washington Post on Wednesday — promised “comprehensive changes” in its policies following its involvement with Houston-based Enron, whose directors voted Thursday to discharge it as the bankrupt company’s auditor. The campaign expanded by the end of the week with ads in the Los Angeles Times, the Chicago Tribune, the Houston Chronicle, and The Arizona Republic in Phoenix.

In California, a PG&E Corp. spokesman said its ads appeared in the Los Angeles Times, the San Francisco Chronicle, and other papers in the state, as well as The Wall Street Journal. The full-page ad ran under the headline “You Deserve the Truth.”

The phrasing touches on the key reason companies buy so-called issue advertisements. They want to spin the story, unfiltered by reporters and editors — and uncontested by the contrary assessments of antagonists. But the tactic is double-edged, according to Holmes. “For every percentage point of control you gain over the message, you lose a percentage point of credibility,” Holmes said.

The persuading doesn’t come cheap. The Wall Street Journal‘s open-rate charge for a full black-and-white page in its national edition is $167,411. Those who advertise in print can also buy spots on the Journal‘s paid-subscription Web site, (http://www.wsj.com) for “a minimal cost,” said Steve Howe, the Journal‘s vice president for advertising sales. PG&E bought both print and online ads in the Journal.

“We see an increase in this type of advertising during recessions” as companies under earnings pressure seek to explain poor results or trumpet good news, said Howe. “But that doesn’t mean it’s a significant and growing category.”

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