University professors call for a change in the law to ensure that institutional advertising does not benefit related media outlets

A group of professors from the Autonomous University of Barcelona, the Carlos III University of Madrid and the Castilla-La Mancha University have drawn up a document with several proposals to improve the regulation of public funding of private media. The document, to which DIRCOMFIDENCIAL has had access, is the result of an R&D project funded by the Spanish government.

The document, previously reported by The Objective, focuses on the “lack of transparency” in the planning and contracting process of institutional advertising by the different administrations. The academics argue that this “cannot be a disguised form of financing the media” and suggest, instead, that a subsidy mechanism be set up to preserve media plurality.

This group of professors say they have verified the relevance of the claims of those who have been denouncing how governments of different political persuasions “economically benefit related media companies”. They claim to have been able to demonstrate that public announcements “do not always respond to easily understandable criteria, such as amounts and audience profiles”.

These claims are reinforced by “serious transparency problems” in terms of planning and contracting procedures, and in terms of specific data on transfers of public funds to specific media. Academics complain that, with some exceptions, only overall figures for total investment in campaigns (creativity and planning) and by sector (press, radio, television, internet…) are published. And all this despite the strong resolutions on the matter by the Council for Transparency and Good Governance. Along these lines, the European Commission also wants to oblige governments to publish the amounts they allocate to each medium via institutional advertising.

Having analysed this context, these professors believe it is necessary to reform Law 29/2005 on advertising and institutional communication. They propose that the future regulation should make it compulsory to explain in detail how the processes of creativity, planning, contracting and evaluation of campaigns are articulated in each case.

They also believe that the contracting processes should be reviewed to ensure that the invoicing requirements for media agencies are in line with the tender budgets, that the promotion of dynamic forms of contracting should be assessed as opposed to centralised contracting, and that the possible misuse of minor contracts should be controlled.

The proposal for the new law also includes the creation of technical bodies with qualified staff who, by listening to the sector’s agents and considering the resolutions and recommendations of specialised bodies, centralise the creative, planning and contracting processes, even if external agencies have to be used on a regular basis.

One of the most relevant points of the reform is that the transfers of public funds to media companies should be included in the list of active publicity of the administrations included in the regulations on transparency and should also be detailed by concept in the annual accounts deposited in the Mercantile Register. This would make it possible, according to the academics’ report, to know what money each administration transfers to the different media and what amount of public funds each media outlet receives from the different administrations.

For academics, the possibility of allocating more funds to direct and/or indirect subsidies to the media should be studied, as these, and not institutional advertising, are the appropriate formula for the promotion of pluralism. In this sense, it would be worth considering prioritising aid to media companies that benefit less from institutional advertising.

Finally, academics advocate the establishment of a rigorous system of ex post evaluation, both in relation to institutional advertising and subsidies, which should be carried out by truly independent regulators.