How the News got in the news. And why it’s costing them big.

A good live blog on the News of the World story was given yesterday by Brand Republic. One of the largest investigations into journalism tactics is now underway into the suspected phone hacking activities. But it’s not just a case of bad PR. Major advertisers including the likes of Tesco, Virgin Holidays, Co-operative, Ford and Wickes among many others have taken a stand and reviewed or withdrawn their advertising completely putting a huge dent in income.

The link between the editorial and commercial aspects of a major newspaper generally only comes into consideration when looking at demographics. Not this time. The journalists at the centre of the investigations have caused a sudden and direct loss of revenue. No doubt several of the Sunday tabloids will be in for an increase in advertising revenue in the next few weeks. The question is, how does the News of the World recover from such an massive negative impact?

One has to wonder if in a few weeks time the furore will cease and advertisers will return. Or will this episode cause genuine irreparable damage to the business in the long term? With the completion of several quick and reactive surveys by Survation, it has already been identified that over half the readers state that they are less likely to buy the paper if all the allegations are correct, and almost 60% believe that advertisers should withdraw their spending.

Alongside the immediate advertising impact, there is also the implication that this has on News Corporation’s potential multi-billion pound buyout of BSkyB. Whilst not officially involved in the investigations in any capacity, Ofcom has expressed a clear interest in the progress of the case. This could potentially have an impact on the bid, based on the requirements in place for “fit and proper broadcasting”. It will almost certainly slow any progress, with speculation and suggestions that at this current time the bidding activity should be postponed until the investigation is complete.

It’s almost certainly the single biggest impact that journalism has had on associated advertising spend in recent years. The amount of information spread about the story both virally and socially also means that it’s unlikely to fade into the background any time soon.