Not long after entrepreneur Rick Smith arrived in Washington 18 years ago to start a new business, he insisted on renting office space in the National Press Building, even though he could've found a cheaper deal elsewhere.
Smith is not a journalist. But he wanted to be near journalists. He liked the cachet.
"When the address says National Press Building and it has its own Zip code, that's cool," he said.
More important, his business, NewsUSA Inc., depends on its ability to mimic what journalists do.
Now based in Falls Church, the 70-person company churns out audio clips, newspaper copy and radio scripts, all based on information provided by paying clients -- corporations, associations and others. Reformulated into journalistic style, with a pitch for the client included as unobtrusively as possible, the articles are distributed free to newspapers and radio stations around the country.
Invoking the credible tone of traditional news media for commercial purposes, the articles find their way into the advertising supplements of major dailies. They fill out the news pages of staff-strapped small-town or community newspapers. They get airplay in the guise of consumer tips -- often rounded out with a mention of a Web site or a company that can solve problems like hair loss or how to set up a bridal registry.
Though news placement services have been around for more than 50 years, they have recently come under fire after articles and columns commissioned by the Bush administration appeared in U.S. and Iraqi newspapers without disclosing who paid for them. But such criticism is not likely to end a practice that for first-time authors, small trade associations, and even well-known corporations such as Home Depot Inc. and Volkswagen AG offers a handsome payoff: the ability to place a message before a mass audience for much less than the cost of buying traditional ads.
Filling a need
NewsUSA, which bought out one of its competitors a few years ago, says it has been growing in recent years. It was among the first in the field to distribute content directly to webmasters and through automatic Internet feeds.
The company's typical clients "can't afford to buy Super Bowl ads to get their message out to the public. And not all newspapers can staff full-time writers to cover all the topics of interest to consumers," Smith said. He added, "This is not hard journalism news, and I don't pretend that it is."
NewsUSA counts about 4,000 newspapers, such as the Fort Dodge Messenger in Iowa and the Norman Transcript in Oklahoma, and 700 radio stations as regular users. The Washington Post has used NewsUSA copy in advertising sections in the past, Smith and a Post advertising official said.
"It's not glamorous. It's not for the client who wants to see whiz-bang techniques," said Patti Londre, president of the Londre Company, an ad agency in Los Angeles that has hired NewsUSA to do work for Dole Fresh Vegetables Inc.
For example, a recent NewsUSA piece offered readers ways to trim their electricity bill. It mentions the sponsor, Heil, a maker of air conditioners, once. Another story that ran several years ago in West Virginia's Charleston Gazette was titled "Family togetherness increases after Sept. 11," in reference to the 2001 terrorist attacks. It started as a typical trend story and ended with a plug for Dole Fresh Vegetables.
Examples of the company's published successes are strewn throughout its cramped offices. Hundreds of them are tucked inside binders on a shelf by Smith's desk. Thousands more are compiled on stacks of CD-ROMS. Framed examples hang on the wall by the entrance. Another heap of clips sits in a basket for an employee to enter into a database.
Smith needs as many clips as he can get because they demonstrate the company's reach. A June 2005 piece written for Johnson & Johnson, for example, appeared in newspapers with a combined circulation of 3 million. The cost of buying the equivalent number of ads in those publications, he estimated, was upwards of $750,000. NewsUSA was paid $5,500.
"The more clips I have, the more proof I have of usage. I'm always looking for ways to get editors to send in more clips," he said.
The issue is so important to Smith that he recently offered incentives such as refrigerators, gas grills and DVD players to editors who send in tear sheets showing that they published a NewsUSA article.
"Each clipping we receive counts as 250 points," explained the rules for the company's "Editor Rewards Program," with extra points offered if the clips are unedited.
After Jim Romenesko ribbed the program on his media Web site, Smith renamed it "the clipping retrieval program," to emphasize that he was not trying to use the offer of merchandise to persuade editors to run NewsUSA stories.
"One of my young media people may have gotten a little carried away talking about grills" in the material promoting the rewards program, he said.
Some people have signed on to participate, but no one has yet earned merchandise from the current program.
NewsUSA's restrained style, Smith insists, is what gets copy published. He estimates the company has lost at least a dozen clients because of its editorial standards, which aim to produce articles that read like independently researched news stories and try to keep overt promotion to a reasonable level.
"I didn't want to impact our relationship with newspapers that has taken so many years to build, because [clients] want to be the tail wagging our dog," said Smith, 52.
"They'll arm-wrestle you," Londre said of NewsUSA. "They won't let you have 99 brands" mentioned in a story.
Such standards do not impress media watchdogs who have criticized the Bush administration for paying a columnist to tout its education policies and contracting a local firm to place stories by U.S. troops in Iraqi newspapers. A new Senate bill would require government agencies to better disclose promotional efforts. The Public Relations Society of America has issued similar guidelines.
Smith and his counterparts contend that they're not trying to fool anyone. Few readers could mistake as serious journalism stories titled "SPAM Asparagus Spears Named New State Fair SPAM Champ" and "Don't Leave Home Without a Tweety Toaster," said Lisa Hawthorne of Associated Release Service Inc., one of NewsUSA's three main competitors and the source of those headlines.
But news placement services do not typically vet or fact-check the information they are given, nor do they explicitly say who paid to have the story produced, said Smith and others in the industry.
NewsUSA, for example, a few years back distributed a piece about a new stroke treatment called NovoSeven that was awaiting Food and Drug Administration approval. (It has since been approved.) The article's sponsor was the National Stroke Association. The article did not disclose that the association received financial support from the drug's manufacturer, Novo Nordisk Inc.
The article also quoted a supporter, Dr. Joseph Broderick, chair of the neurology department at the University of Cincinnati, who participated in a review of the drug's clinical trials. But it did not disclose who paid for the research. In an e-mail, Broderick said Novo Nordisk had paid for the study.
Diane Mulligan-Fairfield, a spokeswoman for the stroke association, said the organization works to keep stroke victims abreast of promising treatments and is able to do so, in part, because it does not face the same regulatory restrictions on communicating with consumers that drugmakers do. At the same time, she said, the association maintains a strict "firewall" between its financial sponsors and its policymakers. Novo Nordisk, she said, had no input in the NewsUSA piece.
NewsUSA's job, Smith said, is not to truth-squad its clients. "At some point someone has to let people know. Otherwise no one will know about any innovations," he said, adding that editors can change or fact-check NewsUSA's copy as they see fit.
Disclosure practices among editors vary. The Kansas City Star and the Tallahassee Democrat both run NewsUSA copy in special advertising sections, for example. The Kansas City Star clearly labels the sections as advertising and prints NewsUSA stories in a different font so there is no confusion, said vice president and editor Mark Zieman. The Tallahassee Democrat uses them in a weekly real estate section made up mostly of advertising, though it is not explicitly marked as such, said Advertising Director Barry Barlow. The Washington Post labels special advertising sections.
When Smith started NewsUSA in 1987, after building and selling a similar company in Canada, he initially worked almost exclusively with associations because he wanted to avoid the conflicts that can arise with companies. "I felt if I concentrated on working with associations, I would be putting out a more palatable message that would allow me to work hand in hand with newspapers. I wanted to take a quality approach," he said.
Over the past decade, the company has grown from 30 to 70 employees and spawned a sister firm that provides the same services to small and emerging companies in exchange for equity. The industry's biggest player, New York-based North American Precis Syndicate Inc. has about 140 employees.
During the mid-1990s, Smith tried to close the gap, buying two video news release firms and eventually occupying 18,000 square feet in Herndon that Smith dubbed the Taj Mahal. But the margins were not what Smith had hoped and about seven years ago he refocused on the core print and radio business. The company traded the Taj for a warren of cubicles off Lee Highway. But, Smith insists, that's how his customers like it.
"Our clients don't want to see us in fancy offices," he said. "They want value."