The Broker, 'first man' in advertisement market... 'Assabah newspaper' monopolises the greater ratio

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The Broker, 'first man' in advertisement market... 'Assabah newspaper' monopolises the greater ratio

 

Iraqi Media House

Our survey ‘ninth report’ observes the quality and distribution rate of commercial and governmental adverts which obtained by Iraqi newspapers, through following up sample of daily publications during a specified period.

 

The survey comes to coincide with the stifling financial crisis which Iraqi journalistic institutions suffer, and that threatens some of them with closure, or a lay off employees and reduce costs, as it is clear that most vulnerable newspapers to such risks those which are financed by capital funds of publishers and franchisees from outside the circle of governmental or partisan institutions.

 

The financial crisis indicates the mismanagement in distributing governmental advertising, and an obvious lack of advertising materials obtained by newspapers from businesses and private sector resource.

 

The survey has followed up number of Iraqi newspapers issued during the period 19 - 29 May, and came out with estimates of financial support that is obtained by Iraqi newspapers.

 

The outcomes shows a large gap between Iraqi newspapers in accordance to variation of ads proportions they obtain according to different circumstances, including the reasons which will be highlighted in this survey, Broker's role, newspaper's prevalence capability, and string of ties controls the ads distribution outlets.

 

First: Numerical Outcome

 

The survey adopted monitoring the daily newspapers that is published on the websites in "PDF" form, during the period specified above.

 

It's worth mentioning that our first report ''on January the 20'st'' indicates that the number of newspapers that publish advertisements in their governmental, civilian, and official paper editions are 34 out of 59.

 

The report showed also that newspapers which own websites are 47 out of 59, and newspapers that publish their content using PDF format are 19 out of 47.

 

To review the first report: press here

 

Based on previous data, the monitoring process of newspaper ads in their websites faced obstacles in relation to quality of those sites, their updates, and the PDF form availability; and the observation outcomes included the following numerical data:

 

143 ad pages in 20 daily newspaper, including 86.4 governmental ads or 60،41%.

 

Ads of foreign oil companies, international organizations, telecommunication companies, as well as local businesses and channels, in addition to other commercial interests occupied 14.6 page, 10.2%.

 

Judicial notifications, condolences, messages of thanks, and reports of lost personal documents reached 26.8 pages, 18.74%.

 

Order of newspapers covered by this observatory according to proportion of ads:

 

Assabah: 16.17 percent.

 

Iraq today: 12.79 percent.

 

Assabah Aljadid: 9.44 percent.

 

Baghdad news: 9.05 percent.

 

Al Dustoor: 7.20 percent.

 

Al-sharq: 7.13 percent.

 

Alalam: 4.75 percent.

 

Almada: 4.75 percent.

 

Albaiena Aljadidah: 4.61 percent

 

The ad pages sum compared to the total number of pages during the monitoring period:

 

1: Iraq today: 18.30 out of 48 pages, 38.13 percent.

 

2: Al-sharq: 10. 20 out of 48 pages, 21.25 percent.

 

3: Assabah Aljadid: 13.50 out of 64 pages, 21.09 percent.

 

4: Baghdad news: 12.95 out of 64 pages, 9.05 percent.

 

Data Table of Benefits of each newspaper from ads, According to number of observed editions during the period of this survey

Newspapers, which did not get any ads during observatory period:

 

Al Taakhi.

 

Usbooa Al batal.

 

Biladi Alyaum.

 

The weekly National Reform.

 

Weekly Gazette.

 

Huna Al janoob.

 

Second: The Brokers

 

Iraqi media house noted that one of the crucial factors in determining the features of press in Iraq advertising market, is the Broker, who controls the process of selling advertisements, determination of percentage of commission, what newspapers that would get the ads, as well as controlling the quantities of allocated ads.

 

The Broker often isolates the publishers of advertisers across a network of relations that prevent achieving limpidity and proper communication between both parties of interest.

 

The Broker has a strong influence within the governmental institutions and advertisers from outside the government for business sector, trade and capital market. 

 

He turns to a difficult value in advertising market, as an advertising resource for newspapers, which should obey his conditions and options for ads distribution ratios.

 

This survey observed that ads which are gotten by Iraqi newspapers without a Broker virtually non-existent, or with extremely low prices and quantities.

 

In order to observe the features of the role played by ads' Broker in this survey, we adopted on certificates by Iraqi publishers:

 

Mr. Adnan Hussein, captain of Iraqi journalists syndicate:

 

There is a major crisis in ads provision for newspapers, because of the absence of commercials ads in Iraq, which considered ad primary funding source for global newspapers and whole media means.

 

The local newspapers rely on few governmental ads, which are not distributed in accordance to fair quotas, but according to personal relationships, thus you can find newspapers from third and fourth class contain four or five ad pages, while first and second class newspapers cannot get even quarter of such space

 

There is a group of Brokers who monopolize governmental ads market, they blackmail newspapers by imposing terms of financial commission out of ads value in return of granting them to the newspaper.

 

Most of those Brokers are employees in ministries, and they are part of the administrative and financial corruption which suffered by Iraqi ministries.

 

At present some government departments do not pay the amounts due of ads for many years, as a result of financial crisis faced by the country, which led to a huge financial problems for newspapers

 

And no solution to this problem for the time being, just by relying on commercial advertising of private sectors, while there is no robust economic activities or investments, therefore it is rare to find companies that advertise for their products through newspapers.

 

We seek for ads provision to ensure the independence of newspapers as a main fund source, because when newspaper doesn't get sufficient financial fund, it may turn to other fund ways, and thus it should pay the price of funding in certain position.

 

To solve such problem there should be a governmental authority belongs to the General Secretariat of Council of Ministers, takes the responsibility of distributing ads by taking into consideration specifying a wider space for central newspapers, while commercial ads solution achieved by Iraqi economy recovery.

 

Mr. Ismail Zayer, Chief Editor of ‘Assabah Aljadid’ Newspaper:

 

The ads crisis hasn't surprised the independent newspapers, it was expected because of the political composition of successive governments.

 

Each Minister participates in successive governments tries to send advertisements to media institutions affiliate his party, therefore independent newspapers could not cope with the current situation, as well as Iraqi ministries decided this year after adopting the budget to reduce advertisements rates to minimum level.

 

The Brokers impose deduction of 20 to 30 percent of ads value on newspapers as commission for them, and if newspaper refuse the deal, they would prevent it of getting governmental ads and it lose the main source of funding; 

 

They act as mafia which controls the distribution network of ads of ministries and governmental institutions, sometimes their authority in this field gets stronger than political parties influence.

 

Additionally, Brokers play a role in controlling some ads related to governmental tenders, by publishing them in certain newspapers, then buy all copies of those newspapers to prevent the spread of tender news in order to turn it to a particular contractor, that is by an agreements made by the (contractor, Broker, and newspaper administration), then the Contractor takes copies of the newspapers and submit them to the concerned ministry, as he meets the governmental conditions mentioned in the ad of tender.

 

Brokers do not rely on the prevalence or comply with the conditions set by the government and issued by the Ministry of Planning in 2004, which imposes the distribution of governmental advertisements on national newspapers, which are distributed throughout Iraq and have a popularity within the country, for example, the majority of declarations issued by Iraqi courts published in ( ...) newspaper which is unknown and distributed in small numbers, this kind of action undermines the course of justice.

 

Newspapers' suffering is not limited to role of Brokers, as a number of officials reduce the wages of ads while they are supposed to be increased in order to match the level of inflation that took place in Iraq during the last years, like rising of paper price and salaries of journalists.

 

On this basis some independent daily newspapers which do not exceed 15 papers, such as 'Assabah AlJadeed, Al Dostor, Al Mashriq, Al Zawra, and others’ are coordinating a campaign to find a solution to ads crisis.

 

Of overall demands of the campaign 

 

- Cancel the priority acquisition by Assabah newspaper - affiliates to Iraqi Media Network, and fully funded by government - of 90 percent of governmental ads, 

 

- increase the price of ads 

 

- And identify a definition and a criteria for distribution of ads.

 

The campaign seeks to develop standards for the distribution of advertising;

 

However, some leaked info by an official reported the government's determination of supporting independent press by five billion dinars, which caused a significant increase in number of newspapers to reach nearly 60, all have registered in journalists' syndicate to participate in the campaign; thus the campaign failed in determining the criteria for distributing ads because of a push by some newspapers - which suffer significant financial problems - to get financial loans.

 

independent newspapers on the way to disappear, they are currently declining, while some of them deliberately to reduce number of pages, or reduce timing of release to two or three days a week, while others - including Assabah Al Jadeed- decided to reduce the cadre salaries, and some newspapers had to lay off a number of its employees.

 

Mr. Ammar Sabah, Advertising Manager in ‘Al Mada’ Newspaper:

 

The Brokers practice blackmail on all independent newspapers, they impose 25 percent of ads value, and some newspapers offer up to 50 percent in order to attract large number of Brokers.

 

There is no balance in ads distribution issue over daily newspapers, it is limited to personal relations set by newspaper with Brokers.

 

Some ministries try to put pressure on independent newspapers through ads, if a newspaper tries to discuss corruption dossiers or mismanagement in one of the ministries, that ministry would prevent the newspaper from its ads, on another word the ministry fights the newspaper by ads.

 

Mr. Omar Al Shaher, Chief Editor of ‘Al Alam’ (Iraqi) Newspaper:

 

Brokers do not pay attention to the role of the newspaper or its prevalence or impact, and if a newspaper wants to get ads, it must create relations with a distribution network that monopolise the government advertisements, those Brokers have strong and trustful relations with the administrations of ministries and governmental institutions, and sometimes they both exchange and share benefits of ads distribution.

 

Brokers usually blackmail the newspapers and impose a certain commission ratio, for example, 30 percent of the value of ads, with the condition that the newspaper signs the contract for a receipt of 100 percent of ads value.

 

Reliance on advertising prevents the development of media, it led to an elimination of important media projects such as 'Nahdha newspaper' and 'Y-News' online news agency and others who failed to hold out, for not being able to get ads and thus lost their source of funding

 

For the period between 2004 - 2008, media offices were responsible on distributing advertisements over newspapers, and the preference was for who used to publish the ministry's activities, then after certain figures seized control of the distribution map, they either have coordination with senior figures or have contact with a large distribution organizations, newspapers, and media means.

 

Now it is rare that Ministries' Media Office owns any role in distributing ads, and sometimes the ad appears and published but now one knows how it happened and who carried out the distribution mission.

 

Third: Prospects in paper press crisis

 

Over the past ten years pessimistic forecasts on printed press crisis were continued by professionals and researchers in journalism field, which acknowledges its demise in the near future, justifying that for several reasons vary according to difference in societies.

 

Paper media future is still ambiguous, controversial, and unsettled, especially with continues demand by different classes of society, what helps making efforts by famous local and global media institutions to enhance the paper press market and adapt the various conditions which are considered as fundamental factors in the decline of paper media, including:

 

One of the most important reasons for the decline of printed press is the internet, as the enormous technical development of the Digital press, ''or online journalism'' includes a variety of news in wider areas, some of them arrive to reader for free, which reduces the need to purchase Gazette, also online media websites include news movies that spread quickly and sometimes instantaneously anywhere in the world, what makes the community more inclined to follow-up the online press other than waiting for newspaper which is published in a certain time, specific space, and limited ability in delivering facts.

 

One of the major effective roles in printed press crisis is the youth category, since a large proportion of them prefer looking for local and global events by browsing online news websites, with the selection opportunity among a large number of newspapers and agencies with various techniques and systems, as well as media apps in smart phones; Most youth category tends to read the condensed and pictorial news, and merely taking a look at the headlines of the detailed articles.

 

At a time that global newspapers suffer from the impact of economic crisis, the printed press is struggling the spectre of disappearing in countries that rely mainly on governmental resources to cover its expenses, which reduces and sometimes eliminates, the independence of press and thus the newspaper will either subject to partisan or personal loyalties or completely die.

 

Forth: Press between investor power and independence (international experiences)

English Press

 

It was the first which breathed the freedom air after a conflict with authority, that was in the late seventeenth century after an absolute freedom from governmental pressures and strict censorship processes, until it reached the height of its renaissance in the eighteenth century, and established a Press Council to preserve the freedom of press, additionally, Britain is the first country that recognized freedom of press, where British society today records the highest readings to newspapers;

 

British newspapers resorted to "Trust Groups" schemes, such as "Scott Trust" in financing the Guardian, in order to maintain the financial status and liberal principles in work projects, the Trust Groups worked to increase their share rates in newspaper market, which boosted the independence of press and the development of its investment with the management of major companies for media and non-media interests, they occupied British media sector, as Murdoch, Stevens and other institutions;

 

British press or overall media remains financed through private shareholders projects, except "BBC" institution that rely in its finance on the TV license tax, as well as the Guardian that got the ownership of a limited trust company instead of the previous Scott Trust scheme, with the same protection terms, as rather than benefiting shareholders or an owner, profits are reinvested to maintain journalism free from commercial or political interference; this would sustain the financial and editorial independence of the Guardian.

 

German Press

 

The Germans press struggled for long time to get its freedom, as it was fought by governments during the two world wars periods, as well as by Nazis, and continued under a rigorous system of strict censorship and decisive restrictions on licenses of newspapers publishing, also it was hired to serve the interests of the state in wars and been subject to stamp tax on newspapers, then after it has been restricted under the definition of freedom of press law, until it gained its independence and freedom of press has become one of the first democratic rights guaranteed by German constitution.

 

German paper press has maintained its balance despite the ongoing technology developments in media field; it continued impacting through political and social issues in a large segment of German society.

 

However, the decline in advertising in newspapers as a result of the global economic crisis, the finance diminishing, as well as the tendency of the youth category to Internet news websites, caused a crisis to many local and regional newspapers.

 

German newspapers, or rather media, are classified into "public and private" sectors; The private sector is funded by shareholders projects which must show and explain their sources; while public (official) media is funded by the state, from tax and fees paid for ownership of T.V. and radio devices by the citizens, taking into account the non-interference or imposition of control by government on the policies of media or journalism institutions.

 

Commercials and advertisements contribute in German newspapers funding significantly, since there are more than 1,000 advertising newspapers, between daily, monthly, and semi-monthly, distributed free on homes.

 

It is worth mentioning that after German unification, media ownership in eastern Germany has turned to private sector and West Germany has contributed in its ownership, which led to a significant increase in sales of newspapers in western Germany, according to the requirements of Eastern German market.

 

French Press

 

Most French newspapers belong to press aggregations, as in most developed countries in the world;

 

French press was freed of monopolism and guardianship, as some newspapers used to pay a sum of money in exchange for implicit statements guarantee the waiver by authorities for part of it.

 

From the past experiences it becomes clear that, for an independent and continuous media sake, media institutions in some European countries resorted to create mergers between key stakeholders in newspapers and general media, like traders and owners of many international companies in several terms of reference, thereby forming large media empires, by establishing clusters composed of the stakeholders as shareholders in financing media, as well as traditional sources of funding, such as ads, subscriptions, sales returns of newspapers, and other advertised services.

 

The advancement of paper press necessitates the presence of sponsors of independence and permanence, as well as steady law fortifies media institutions including their cadre from political and partisan monopolism and censorship, in order to build a national independent media according to professional standards.

 

Fifth: Notes:

 

Failure of Iraqi newspapers in covering their minimum costs through funds provided by ads.

 

There is no clear mechanism according to transparent administrative and legal criteria for the distribution of advertisements on Iraqi newspapers fairly, according to real ratios of the distribution and proliferation.

 

A clear stumble in payment of newspapers dues as a return to publishing ads, for routine reasons, or the financial crisis that hit the country since the beginning of 2015.

 

Some Iraqi news institutions are compelled to decrease the costs of publishing ads, and approve payment on credit to avoid bankruptcy, but, this option leads to an imbalance in advertising market, imposed by the double and unclear standards in distribution.

 

The Broker controls everything in the press advertising market, and runs across a network of various and influential relations the distribution, sale, and commission processes; it seems that it is difficult for press institution to depart the Broker framework for its knowledge of the almost certain financial losses.

 

The Broker might control, sometimes, the editorial policy in some press institutions, and imposes certain contexts in publishing, some newspapers are compelled to accept this situation.

 

The Iraqi newspapers are competing to share less of the total distributed ads to, due to the monopolism of ‘Assabah newspaper’ for a fixed ratio, which is often the largest compared to the rest of newspapers.

 

Some daily and weekly Iraqi newspapers get high ratios of ads despite the limitation of their spread and distributed editions, compared with other publications which are superior in distribution rates, even some of those newspapers are issued on the advertising day only with a specified number, dedicated for the advertising party.

 

Sixth: Recommendations

 

"Iraqi media house," recommends the formation of a joint committee consists of organizations concerned with supporting independent media, editors of major newspapers, and a governmental coordinator representing the General Secretariat of Council of Ministers, to be concerned with setting a mechanism for an impartial distribution of governmental institutions' ads, according to controls take into considerations the prevalence of newspaper, total number of pages in the newspaper, and services provided by newspapers for advertisers.

 

A list of controls, mechanisms, and proposals, should be arranged by ''joint committee'' for the provision of support by the state to prices of paper and ink devoted exclusively for printing newspapers regularly through providing servings of those materials by subsidized prices and tax exemption.

 

The Committee works in coordination with the concerned authorities to cancel the role of Broker in regards to governmental institutions ads, and ensure the granting the share of ads and funds to the newspapers directly without a third party.

 

Joint Committee could consider the establishment of a "National Public" distribution company for paper publications in Iraq, that is conducted through a partnership between the state and civil society organizations concerned with public information.

 

Iraqi media house recommends to end any preferential treatment by the state institutions in their advertisements in favour of "Assabah" newspaper, that is funded by the state, on the rest of newspaper account, and dealing with any generalization issued by any government institution specifies the advertising for a specific newspaper, including ''Assabah'', as a kind of an administrative and financial corruption, that should be prosecuted.

 

Iraqi Media House calls the Iraqi parliament for making a dialogue way with media institutions and organizations in Iraq, to issue a series of laws for regulating media work, protect journalists, provide free flow of information, and protect paper press of extinction risk.

 

Iraqi media house demands the international organizations concerned with supporting independent and free media to set up work projects and partnerships with independent media in Iraq to save it from political and partisan polarization, or racial and sectarian retrenchment;

 

And IMH considers the lack of attention to supporting the independent newspapers by international organizations relevant to such regard is one of the offenses made against Iraqi media for dozens of years until present day.

 

Translated By: Halla AlSalam

 

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