State funded advertising: Millions from the state budget and state–owned companies are pouring into selected media outlets

29. December 2021.
foto HINA/ Mario STRMOTIĆ/ Canva

Currently, when traditional media are facing serious business problems caused not only by the last economic crisis but also by new technologies that are changing the way media content is consumed, any support for content production based on the journalistic code of ethics is necessary and welcomed. For this reason, transparency of investment of public funds in media is even more important. Clear criteria and effective measures must be the conditions on which transparency is based.  

Otherwise, the lack of clear rules and oversight of their implementation poses a risk that state advertising could become a powerful tool for favoring certain media when allocating public funds, which favors censorship in newsrooms and creates uncritical media willing to work in the interests of their "clients". State advertising in selected media outlets can limit political responsibility and stimulate the rise of autocracies, a phenomenon that has hitherto been explored in the neighboring country of Hungary.

Gong's pilot study is prompted by an increasing number of ads and sponsorships from state–owned companies or ministries – often including EU funds in the media , as well as the fact that there are no clear and fair criteria for the distribution of state ads in Croatia.

“Those comparisons are insulting,” said Andrej Plenković when he was recently asked to comment on the resignation of Austrian Chancellor Sebastian Kurtz after he was under investigation on suspicion that Austrian taxpayer money was used for the media to publish positive articles about him and his party. Of course, by "comparisons" Plenković meant comparisons with the Croatian government and their relationship with the media.

When we look only at the expenses of the central government, i.e., payments from the State Treasury, which include ministries, the Government, the Parliament, some bureaus and agencies and others, according to the largest Croatian media outlets, it becomes clear that Prime Minister Andrej Plenković was very forthcoming when media outlets were concerned. So, since the start of 2017 to the middle of 2022, Nova TV has received 18.2 million kunas from the state budget, 15.3 million went to RTL television, 10.5 million to Večernji list, and 10.1 million kunas to Hanza media.

However, this is only a part of the sums received by the media, while the actual amount paid to them by public and state-owned companies is not transparent and this information has not been published anywhere. Data on advertising costs of state-owned companies is not available in the state treasury database. Based on the right of access to information, in early December Gong requested data on advertising of Hrvatska elektroprivreda (HEP) in 2020 and 2021 but has not yet received it.

The results of the pilot study conducted by Gong indicate that public companies are the ones that are advertised much more often than other public institutions. Furthermore, ministries are often getting involved in media advertising with state-owned companies, and in the graphs included in this article we refer to them as "ministry +".

This research was conducted by Ilko Ćimić, a multi-award-winning investigative journalist, using a sample of advertisements published in the two leading daily newspapers: Večernji list and Jutarnji list during the first six months of 2020. A review of expenses for advertising and informing from the state treasury in 2020 shows that these two newspapers are among the five most generously funded media outlets in the country.

Top 5 commercial media outlets with the highest revenues from the state treasury in 2020

Data on ads was collected after reviewing of editions of Večernji list and Jutarnji list. Ads were put into categories according to the type of advertiser (public institutions, public companies, agencies, ministries and local units) and according to the type of advertisement (promo article, sponsorship, special contributions, notices and calls).

Večernji list

According to the State Treasury of the Ministry of Finance, in 2019 that preceded the 2020 crisis, Večernji list received 2.7 million kunas. the Ministry of Regional Development was the most generous and gave them 797,500 kunas, in 2020, the year of crisis, they were given 2.3 million, and the largest amount came from the State Electoral Commission – 619,825 kunas.

When we look at Večernji list in 2020, it is obvious that the “Regional Days of EU funds” were predominantly advertised, and from that it is very clear that they were being funded by the Ministry of Regional Development. For example, in February 2020, before the COVID crisis and lockdown which followed in March of that year, in the shortest month of the year, Regional EU Funds were advertised as many as 24 times. That means almost every day. Most of those advertisements were announcements of events, i.e., the conference of the Ministry of Regional Development, but most of the ads, each of them was spread across two pages, were affirmative promotional articles about each conference.

However, the largest number of ads is associated with the state-owned company HEP. Hrvatska elektroprivreda was featured almost on a daily basis in Večernji list – ranging from sports events reports which they sponsored, reporting on the specialized media award "Večernjakova ruža" where they were one of the sponsors, a conference on digital (r)evolution, a project to present a new look of Poslovni dnevnik, to the sponsorship of the “Become a Driver” project, the "Poslodavac za 5" project, Večernjak's bicycle races and especially the project “Croats who changed the world” where HEP also, among others, sponsored columns that were published on a daily basis.

Number of ads in Večernji list from January to June 2020

For example, in July of 2020, HEP's logo, ad, promotional article or sponsorship appeared as many as 34 times. During that month, there were almost no editions without at least one HEP ad.

Interestingly enough, in the same month, Večernji list published the so-called special edition "I'm staying at home", i.e. "We are changing our habits", and except for HEP, the main sponsors were state-owned and state-dependent companies; Financial Agency (Fina), Zagreb Holding, Prvo Plinarsko Društvo (PPD) and the Croatian Lottery. Moreover, the listed companies are frequent advertisers in Večernji list, especially PPD which was one of the main sponsors of Večernji list's project "Croats who changed the world" as well as conferences like Invest Cro with the Croatian Chamber of Commerce. Fortenova, formerly known as Agrokor, was also generous in 2020, appearing as a special sponsor or patron together with other state companies, especially INA.

Večernji list also stands out with its special supplements. Among them is certainly Lokalni.hr which was published on average on 30 pages once a week, and in which all the counties were represented, at least with the logo. The Croatian County Association that brings together all the counties, on average once a month also published a promotional article that was clearly marked as a paid article.

Like other daily newspapers, Večernji list also has a supplement called “Universitas”. As the Telegram portal once reported, from 2017 to 2020, universities spent at least 7.5 million kunas on their newsletters. This refers to "Universitas" supplement of the University of Split and the University of Zagreb, published in Slobodna Dalmacija and Jutarnji list, and since last year also in Novi list, and a feuilleton Hrvatska sveučilišta published in Večernji list.  

Jutarnji list

In 2019, Hanza Media, the publishing company of Jutarnji list and several other media outlets, was given 2.5 million kunas from the Government budget, while in the 2020 crisis year, they received 2.3 million kunas. Last year, the largest amount was given by the State Electoral Commission for publishing electoral lists – 596.000 kunas.

Just as with Večernji list, we can see a trend of advertising of Hrvatska elektroprivreda, represented in Jutarnji list ranging from scholarship competitions, gifts such as posters of handball players or traffic rules, choosing the best EU project, best school newspaper; Jutarnji list panels and conferences to the Sustainable Cities project.

For instance, in September 2020, the HEP logo could be seen almost 40 times in Jutarnji list– in standard advertisements, on megaposters, in articles and announcements for the competitions for the best EU project competitions, from the World of Energy supplement to the Startup Europe Regatta conference.

Another well-represented company in ads in Jutarnji list is INA, with their logo published almost 30 times: in standard advertisements for fuel and within projects such as Highlander Velebit and Road Safety, Jutarnji list's Nautical patrol, prize games, "Zeleni pojas" competition and many more.

Number of ads in Jutarnji list from January to June 2020

As with Večernji list, one can notice a large number of conferences, round tables and online panels in partnership with almost all bigger state companies from Janaf, Croatian Bank for Reconstruction and Development (HBOR), Croatian Tourist Board to the Croatian Chamber of Commerce, Financial Agency (Fina), Croatian Motorways and others.

Conclusion

Albeit on a limited sample, the analysis of advertisements based on the frequency of publication as well as on their type, showed that public institutions, from ministries to state and communal companies, most often advertise themselves as sponsors of various events – from cultural and sporting manifestations to professional conferences and special supplements – in the two largest national daily newspapers.

Number of ads by type from January to June 2020

This pilot study does not include analysis of the content, i.e., how state advertising impact on reporting on the Government or state-owned companies who paid for these advertisements, which could be a desirable and logical continuation of this study.

The Hungarian experience shows that the trend of increasing number of sponsored content and promotional articles paid for by the state or state-owned companies, compared to classic ads, can have a more significant effect on editorial policy. In Hungary, the exchange of favors between the state and the media can be documented. Also, the “services” provided by the state for advertising in selected media, are returned by a lower intensity of reporting on Government corruption scandals.

Co-financed by the European Union under the Europe for Citizens program.

Gong is a Knowledge Center in the field of civic activism and building democratic institutions of society within the Development Cooperation with the National Foundation for Civil Society Development.

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