News Corp. Hacking Fallout Spreads to U.S.

Ad buyers express concern as scandal grows

First came the damning revelations, the reader boycotts, the police investigation, and the news of U.K. advertisers pulling ads from News of the World. Now, the repercussions from the News Corp. phone hacking scandal are spreading to the U.S., where some ad buyers are getting twitchy.

The scandal has buyers trying to reconcile the outrageousness of the charges surrounding Rupert Murdoch’s U.K. tabloid with News Corp.'s significant U.S. footprint, which includes Fox News as well as the straitlaced Wall Street Journal. Some said that while they haven’t suspended advertising in News Corp.’s U.S. properties, they're growing wary about doing business with the media giant.

“You always wonder when anybody has a scandal,” said Greg Clausen, chief media officer of Doner in Detroit. Clausen said that while he would still consider News Corp. properties “viable” options for clients, he added, “It puts you a little bit on edge.”

Robin Steinberg, director of publishing activation at MediaVest, which is one of the biggest print-buying shops, controlling some $1 billion in annual spending, said news of the scandal is prompting her to seek reassurances from News Corp. representatives in the U.S.

“We are addressing the situation through conversations and explanation,” she said. “The expectation is that this approach and behavior will not carry over here into the states. Certain guarantees might be necessary for clients to be comfortable allocating money to these properties.”

Others flat-out declined to comment, preferring to leave the talking to clients. “It’s a little too touchy,” said a rep for one major buying agency.

One who was prepared to give News Corp. the full benefit of the doubt was Steve Farella, founder of TargetCast tcm.

“It clearly makes an agency and any client think twice about supporting that newspaper,” Farella said of News of the World. “But in my heart, I don’t believe that any company owned by News Corp. has a policy to break the laws.”

“This doesn’t make me think twice about doing business [with News Corp.],” he continued. “We are not in News of the World, and I don’t believe that the errant practice… is being duplicated at Fox News here in America.”

One area of agreement was on the outrageousness of the matter. Said Clausen: “They have such significant global reach across all media properties. Why would they risk that global clout and reputation on this?”


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