Guest blog: Advertisements in pro-government and independent weeklies in 2020

The journalist of Magyar Hang spent weeks in the library to leaf through the 2020 editions of Hungarian political weeklies. He wasn’t curious about the articles published that year; instead, he wanted to know what type of ads were published in pro-government and independent weeklies. Using information about the prices of advertisements in these newspapers, he was looking for further insights about the potential implications of the distribution of advertising. A brief summary of his analysis is now available in English on the website of Mérték Media Monitor.

By Csaba Lukács

“Every life matters” – this was the slogan of a government ad that ran for a while in the autumn of 2020 as a so-called public service advertisement; it was featured in four pro-government weeklies (among other outlets). It appeared in full-page ads emphasising the importance of measures taken to combat the coronavirus. However, the slogan was not entirely true: the readers of independent weeklies were not deemed important enough to be also alerted to the dangers stemming from the virus. 

That year, there were ten players in the market of print weeklies: three newspapers (the business magazine Figyelő, the rurally focused Szabad Föld and Mandiner, which is aimed at an intellectual audience) owned by the giant pro-government media holding called the Central European Press and Media Foundation (Közép-Európai Sajtó és Média Alapítvány or KESMA in Hungarian); the staunchly pro-Fidesz Magyar Demokrata, which is not part of the KESMA empire; and six independent newspapers. Among the independent newspapers at the time, 168 óra was transformed into a pro-government newspaper by its new owners. As a result, many of its journalists quit and founded a new print weekly called Jelen in May 2020. The other independent weeklies are the liberal Magyar Narancs, the literary and public affairs newspaper Élet és Irodalom, the political/business newspaper HVG and Magyar Hang, which is staunchly critical of the government despite its conservative ideological orientation.

The circulation figures of the abovementioned newspapers are also relevant. With a total of 120 thousand copies sold per week, not all of them were audited by an independent institution (an audit is costly and not everyone can afford it; furthermore, as we will see below, it is not necessarily a worthwhile investment in the highly distorted Hungarian media market because, typically, advertisers do not render their decisions based on circulation figures). The following weekly newspapers are audited: Szabad Föld, Magyar Demokrata, HVG and 168 óra. Some independent newspapers provided self-reported data about their circulation in 2020, while we used market estimates for the two other KESMA outlets – Hungary is a small country where nothing remains a secret; hence, it is relatively easy to estimate circulation figures.

Taking a leap forward in time in our story, I spent about a hundred working hours in a library in early 2023 to leaf through some 35,000 pages of the nearly 500 issues of the 10 weekly newspapers – this was the totality of pages published in this market segment in 2020. I focused exclusively on advertisements in the print editions of the weeklies in question, looking separately at government advertising (these are the so-called public service advertisements), ads by enterprises that are 100% state-owned enterprises (SOEs) and the ads of commercial advertisers. Furthermore, I also looked up the advertising list prices in 2020, that is the price at which these newspapers officially sold their advertising spaces. From previous experience, we know that the state does not tend to bargain in these situations. It purchases advertising either at or above the list prices since the goal is not to maximise the reach of a message whilst minimising the cost but to channel money to favoured media enterprises. 

The results are stunning.

Table 1: Direct advertising by the government and state-owned corporations in 2020 in pro-government weeklies (number of full pages at list prices)

To stress once again: a mere four newspapers featured 300 pages in total of direct government advertisements and an additional 213 pages of ads by state-owned enterprises (for a total of 513 pages). At list prices, without considering potential surcharges or discounts, the total value of these ads was 1.04 billion Hungarian forints. Using the rough reference rate of 350 forints for a euro which prevailed at the time, this amounted to 2.9 million euros! This sum is significant in the small Hungarian print media market. It is important to stress that these are only print ads – the government and the SOEs also intensely advertised on the online platforms of the pro-government weeklies. We don’t know how much public money they spent on this.

By comparison, the six independent weeklies did not feature a single page of government advertising! We also only found a mere two pages of SOE ads: the public utility company MVM (Magyar Villamos Művek – Hungarian Electrical Works) bought ads in 168 óra just as the latter was in the throes of the abovementioned political transition.

Among the SOEs, the most active advertisers were MVM and the Szerencsejáték Zrt (the Hungarian lottery corporation), which purchased a total of 133 pages of ads in pro-government newspapers.

Table 2: The number of ads by the state-owned MVM and Szerencsejáték Zrt in the four pro-government weeklies (number of full pages)

Table 3: Shares of state vs commercial ads in the pro-government newspapers:

The taxpayer money spent on ads in each print copy of the given newspaper (the figures in parentheses feature the newsstand prices of the given weekly)

Szabad Föld:      138 forints(350 forints)

Mandiner:       1,273 forints(550 forints)

Figyelő:          3,693 forints(790 forints)

M. Demokrata:  369 forints(495 forints)

When one asks the Hungarian government for an explanation for these striking figures, their response reflects a typical cynicism that casually dismisses the concerns raised as presumably irrelevant. They claim the government doesn’t advertise at all, so there’s nothing to see. However, this does not mesh with reality since all public service ads feature the following line at the bottom:  “Made on behalf of the Government of Hungary.” They explain that a public procurement tender was launched for communication tasks (and as coincidence would have it, it is usually won by the same two media agencies, New Land Media Ltd and Lounge Design Ltd, which are both owned by Gyula Balásy). Thus, according to the government, a private company decides where government ads are placed. Everything about this is legal, they claim, but the facts are stubborn: a staggering amount of public money has been spent exclusively on pro-government media.

How realistic is it that a private company spends billions in public funds on advertising without consulting the Minister of Propaganda, Antal Rogán, and potentially against his will? Still, even if that were the case, that still raises questions about the government’s responsibility: it allows public money to be squandered and spent in a market-distorting and unequal way. However, the more likely scenario is that the advertising agency was told exactly where and how much to advertise, which is why all the money ended up with the pro-government media outlets, completely ignoring market realities and efficiency considerations.

It is also interesting to juxtapose the four pro-government papers’ print advertising revenue from public funds with the total annual revenue of some of the independent papers.

In the case of Mandiner, Figyelő and Szabad Föld, it is impossible to disaggregate operating costs, personnel expenses and other economic data: the giant media holding, which controls nearly 500 different media products, is owned by a foundation and a giant company called Mediaworks Hungary Zrt. Magyar Demokrata is published by an independent company (Artamondo Kft), so its turnover can be compared directly with that of some independent newspapers.

Profit/loss of publishers in 2020:

Magyar Demokrata    132 million HUF

Magyar Hang               37 million HUF

Élet és Irodalom            -7 million HUF

Magyar Narancs         -11 million HUF

168 óra                      -108 million HUF

The fact that the newsstand price of pro-government newspapers (with one exception) was far cheaper than that of non-government newspapers is certainly also a result of the extremely lopsided distribution of revenues from state advertising, which almost exclusively benefit pro-government media:

Table 4: Prices of political weeklies in 2020 (HUF)

The data clearly show how distorted the market of political weeklies is. Pro-government weeklies receive ample state advertising, which creates favourable financial conditions for them and is a source of unfair market advantage. By contrast, independent newspapers need to survive in an increasingly challenging market environment. This means they are compelled to cut costs continuously and yet most of them still generate losses even though their newsstand prices are higher than that of the government newspapers.