Business and government bodies in the Maldives are being targeted by ‘media pirates’, or ‘supplement hustlers’, who arrive in the country posing as journalists and then sell (‘sublet’) advertising space in a well-regarded overseas publication for a significantly inflated premium over the publication’s actual ad-tariff.
The ‘journalists’ approach senior members of government and key businesspeople, usually in an emerging country desperate to expand its appeal to foreign investors, and leverage one personality against another over several weeks to sell the ‘advertorial’ at a premium.
A circulated report on the ethically-dubious but not illegal practice, produced by the Financial Times newspaper and obtained by Minivan News, observes that “appointments are made with the inference that the team, usually a young man purporting to be a journalist and an attractive sales lady, represent whatever title they are selling when in fact they are purely acting for themselves.
“The pitch may start with a highly scripted, enthusiastic and rehearsed ‘interview’ conducted by the journalist and then switching to the soft sales approach of the sales lady. This combined ‘interview’ is intended to flatter and to act as a ‘hook’ and at this point space sizes or rates are produced followed by a contract of dubious legality for a signature.”
Minivan News understands that the problem became so drastic in the Maldives last year that the government instituted a policy of black-listing the representatives of any international media organisation found to be peddling advertorial.
“We’ve had some bad experiences,” admitted a source in the President’s Office. “We’ve had journalists claiming to be from the Japan Times, Business Week in China and a couple from the [UK] Observer. They target governments in emerging countries and tenaciously pursue the President, Prime Minister, King, Sultan or whatever for an endorsement, or even just a photo together, which they then use to hard-sell to businesses or parastatal (government-owned) organisations.”
“It’s not illegal, it’s just a rip off and a con,” he added, noting that the prolificacy of the practice was leading to frosty receptions for bona fide journalists and ‘legitimate’ media salespeople.
The money at stake can be considerable, especially for an emerging country with a foreign exchange imbalance as great as the Maldives; Minivan News has learned that a third-party organisation currently active in the Maldives is seeking up to US$70,000 a page for an advertorial ‘feature’ in CNBC Business magazine.
A government official who recently agreed to a meeting with a representative from ‘Star Communications’ said alarm bells rang when the representative claimed to be producing an investigative editorial ‘feature’, but then suggested the extent and tone of the coverage would depend on the degree of “support” provided.
“There was a lot about how strong the title [CNBC Business] was editorially, but really it was a request for paid editorial coverage,” he said.
The accompanying prospectus identified the individual as an ‘authorised representative’ for CNBC Business magazine, while an accompanying letter from the publication’s Commerical Director, Kevin Rolfe, while acknowledging the product was “promotional”, requested “all the support you could provide the members of Star Communications News on the development of this effort.”
The heavily CNBC-branded prospectus promised that “our editorial will be written by specific industry experts [and] at your request we will submit your editorial coverage for approval. We work in full coordination with your to ensure the most accurate editorial in the market.”
The prospectus additionally claimed that the CNBC Business magazine had “1 million” readers, and would be “personally delivered inside a golden envelope” to the CEO of the world’s top 1000 companies.
The CNBC Business magazine’s website claims the publication has 670,000 readers. Later communication with the representative clarified the circulation as 200,000.
Minivan News attempted to contact Rolfe to verify the publication’s relationship with Star Communications and obtain a rate card for comparative purposes, but he had not responded at time of press.
Minivan News traced the address for Star Communications given on the prospectus to a corporate tax accountancy firm called Lacey Consultancy based in Dublin, Ireland. On its website, the firm boasts that “we advise on devising the best structures to mitigate/eliminate withholding taxes on international payments.”
The website for Star Communications, while not readily searchable on Google with the unusual .us domain, lists an address for the company in Madrid, Spain and shows it has produced reports for emerging countries including Libya, Dominica, Tunisia and Pakistan.
Star Communications’ Managing Director Christina Hays, who contacted Minivan News regarding the story, claimed that “no single entity has been offered a single page for 70k USD. ”
“Clearly, the extension of our coverage depends on the amount of advertising space sold, just as it does with any other kind of promotional publication. The more space purchased, the longer our special feature will be. The tone, however, is not dependent on the amount of space sold, but, rather, on our editorial criteria. And at a later stage the media’s criteria, as the final product has to be approved by the editorial team of CNBC,” she said.
Star Communications, she stated, “received the full support [of the Maldives] High Commission and have subsequently held various meetings in Maldives with government officials. Hence, while there may have been a blacklist in operation last year, as you allege, which affected other companies, we have been granted official approval to market our product in Maldives in 2010.
Minivan News contacted the High Commission of Maldives in London seeking clarification as to the nature of its approval.
The commission confirmed it had met with Star Communications and referred the company to the Ministry of Foreign Affairs as a matter of policy, “as we do not have the resources and the expertise to judge how good or bad the company [is].”
“As a matter of policy, the High Commission of Maldives will try to accommodate meetings with all commercial ventures that request meetings with us, as much as time and resources permit. We would normally then put them in touch with the relevant authorities in Maldives through the Ministry of Foreign Affairs. It is entirely up to the relevant authorities in the Maldives to decide whether they choose to meet the company or not or indeed whether their proposal is worth considering,” the High Commission stated.
“This should not be construed as support by the High Commission of Maldives to market their product in the Maldives and at no time is this indicated to the company.”
In a response to Minivan News, Hays stated that “at no time have we attempted to sell advertising to government officials in Maldives and have only offered the opportunity to purchase space to public and private-owned companies. Their choice on whether or not to do so is entirely at their discretion, and we have no leverage whatsoever on their decisions.”
She acknowledged that while the company’s reports “comprises advertising and editorial elements. We do not, however, purport to be journalists; we are journalists with a track record of interviewing Presidents, Ministers and CEO’s over the 5 continents.”
The Financial Times report on ‘supplement hustling’ claims that as of 2000, “the most prolific example of this activity was from an organisation called NOA based in Madrid with off-shoots in London, New York, Paris and Hamburg, who operated affiliate companies from PO Box numbers.”
NOA, the report stated, “came into existence around 1985 when an ex-Time employee, an Argentinian national of Syrian extraction called Juan Alberto Llaryora, set up AFA (which became NOA) to sell country supplements in contracted publications. His concept was once described as ‘a team approach comprising fake journalist and Latin sales girl using a tits on desk routine’,” the report read. “Because of its success the business spawned a number of spin-offs set up by disaffected NOA staff.”
Hays said Star Communications had “no relationship whatsoever with NOA (AFA), nor any of the media titles mentioned in your article.”
The FT report concluded by stating that while many publications were happy to accept the revenue generated by such companies, they “are sometimes unaware of how significant a misrepresentation they have become a part of, and how much damage such activities have on the reputation of the international media.”
Addendum: This article has been updated to reflect comments subsequently received from Star Communications and the High Commission of the Maldives to the UK. The full response from the company is available here.