News America Marketing

News America Marketing, often referred to as just News America, was a marketing business previously owned by News Corp. It publishes SmartSource Magazine, a weekly consumer-branded newspaper insert offering advertising and coupon promotions, delivered in over 1,600 newspapers in the U.S.[1] and is one of three companies in the United States (the other two are Valassis Communications and Insignia Systems, Inc.) that control almost all the in-store ads and grocery coupons in the United States.[2]

News America Marketing
Typesubsidiary of News Corp
IndustryMarketing
FoundedNew York, United States (1988)
Headquarters
1185 Avenue of the Americas
New York City, NY 10036
,
U.S.
Area served
United States
Canada
ProductsHome delivered, in-store and online consumer marketing services
Number of employees
900 Full Time, 4,000 Part Time
ParentNews Corp
WebsiteNewsAmerica.com

One major division of the company is SmartSource iGroup, formed in 2000 from acquisitions and investments and runs the company's online couponing site, www.smartsource.com, in addition to other interactive consumer businesses like sampling and direct mail.[3] The SmartSource brand began in 1998.[4]

History

The News America FSI was formed when News Corporation purchased the marketing divisions of two Free Standing Insert (FSI) business competitors: Quad/Marketing Inc. and Product Movers Inc., in 1988.[5] In 1997, News America purchased Actmedia, an In-Store marketing and promotions company that operated out of Connecticut, and the company changed its name to News America Marketing.[6]

Products

News America Marketing has three categories of products: Home-Delivered network, In-Store network, and Online-Savings network.

The Home-Delivered network contains the free standing SmartSource Magazine, door hangers, direct mail promotions, and home-delivered samples.

The In-Store products include at-shelf messaging, coupon dispensers, cart advertisements, large format entrance ads, Shelfvision video, floor messaging, and in-store sampling.

The Online Savings network includes SmartSource.com. In 2011, SmartSource began printing QR codes on its online printable coupons in order to prevent coupon fraud.[7] The company released a free couponing application for iPad titled SmartSource Xpress in March 2012.[8][9] SmartSource Xpress for iPhone was released in 2013.[10][11]

On July 24, 2015, News America Marketing purchased the Canadian company Checkout 51[12] for an undisclosed price. Checkout 51 provides consumers with a digital means of performing coupon redemptions through smart phone enabled receipt scanning technology.[13]

News Marketing Canada

News Marketing Canada was created in 1995 through the merger of two separate Canadian FSI companies and today publishes the coupon inserts, SmartSource Magazine and UtiliSource, the French-language version. Since News America Marketing's 1997 purchase of Act Media, News Marketing Canada has offered in-store advertising and promotional products as well. In September 2011, it launched SmartSource.ca, a coupon website for Canadian shoppers.[14]

Philanthropy

News America Marketing has published two Children's Miracle Network Hospitals-themed issues of their SmartSource coupon insert every year for more than 20 years, generating funds and media value for the organization.[15][16][17] SmartSource Magazine has also featured an annual issue of an Easter Seals-themed insert. Over the course of 15 years, the Easter Seals-themed SmartSource Magazine has helped generate more than $3.3 million for Easter Seals.[18] News America Marketing has also supported Volunteers of America's "Toys for the Holidays" program.[19]

Since 2009, News America Marketing has sponsored an all-expense-paid trip to the Super Bowl each year for two Marines and a guest.[20][21][22][23]

Each November since 2011, News America Marketing has published a special edition of SmartSource Magazine featuring Wounded Warrior Project's "Believe in Heroes" campaign.[24][25] In addition, the organization has held fundraisers in its individual offices for the Wounded Warrior Project as well as Operation Gratitude.[26]

Operations

In the fiscal year ending June 2005, the company had 28% operating margins, the highest of all News Corporation businesses. Its annual revenues were $1.1 billion, an increase of 9% from the prior year.[27] As of 2007, News America produced the majority of revenues for News Corporation's magazines and inserts division, and it controlled an estimated 50% to 60% of the insert market and as much as 90% of the in-store business.[28]

In 2005, Theme Promotions, a merchandising firm, won a $6.8 million jury verdict against News America.[28] The California jury found News America guilty of violating civil antitrust and unfair-competition laws.[27]

In 2006, the state of Minnesota accused News America of engaging in unfair trade practices. The company settled in 2008 by agreeing to pay costs and not to falsely disparage its competitors.[29][30]

In March 2006, a News America Marketing coupon insert competitor, Valassis Communications, settled FTC charges that it had attempted to induce News America Marketing to collude on pricing by signing a consent decree that barred Valassis from engaging in, or attempting to engage in, future anticompetitive behavior. The FTC made no charges against News America Marketing in connection with its investigation. Shortly after the decree was signed, Valassis sued News America Marketing.[31][32]

Between 2009 and 2011, the News Corporation paid out about $655 million to settle charges of corporate espionage and anticompetitive behavior by News America.[29]

  • In 2009, a federal case in New Jersey (Floorgraphics v. News America Marketing In-Store Services Inc, 04-cv-3500, U.S. District Court, District of New Jersey, Trenton[33]) brought by a company called Floorgraphics went to trial, accusing News America of hacking into Floorgraphics's password-protected computers. Much of the lawsuit was based on the testimony of Robert Emmel, a former News America executive who claimed to be a whistle-blower. After a few days of testimony, the News Corporation settled with Floorgraphics for $29.5 million; several days after that, it bought Floorgraphics.[29][34][35][36] On 20 July, US Senator Frank Lautenberg wrote a letter to the Department of Justice requesting that the ongoing FBI probe include the Floorgraphics hacking allegations.[37] On July 21, 2011, it was reported that representatives of the United States Department of Justice and the FBI had begun investigation into the Floorgraphics allegations.[38]
  • In 2010, the News Corporation paid $500 million to settle a case brought against it by Valassis Communications,[29] after that company had won a $300 million verdict in state court in Michigan.[39] The lawsuit by Valassis was based on claims that News America had gained market share by forcing its packaged-goods customers to sign long-term insert contracts or risk huge price increases on their in-store advertising displays[28] The settlement included News America entering into a 10-year shared mail distribution agreement with Valassis Direct Mail, a Valassis subsidiary.[40]
  • At the beginning of 2011, in a case in Minnesota brought by Insignia Systems, News America faced more than $600 million in fines.[41] The News Corporation paid out $125 million to settle the allegations of anticompetitive behavior and violations of antitrust laws.[29] This was the third time that the two companies had been involved in lawsuits. In August 2000, Insignia was sued by News America regarding exclusive promotional agreements with several major supermarket retailers,[42] a suit that was settled confidentially in November 2002. In November 2003 Insignia was sued again, regarding Insignia's right to market in-store advertising and promotional services.[43]

In late 2011, the District Court of Atlanta granted a permanent injunction prohibiting Robert Emmel, a former News America Marketing executive, from sharing News America Marketing's confidential information and found that Emmel was not a whistleblower and was therefore not entitled to whistleblower protection under the Dodd-Frank Act, as he had claimed. In the court's ruling, it stated that far from harassing, or acting in a retaliatory manner towards him, News America Marketing “actually assisted Emmel in obtaining new employment after it terminated him.”[44]

References
  1. "Our Products – SmartSource Magazine". News America Marketing. Retrieved 2011-07-18.
  2. Jim Edwards (February 9, 2011). "Why News Corp.'s Settlement With Insignia Creates a Grocery Ad Cartel". BNET (CBS). Retrieved 2011-07-18.
  3. "News America Marketing Forms E-Business Unit". Direct Marketing News. May 3, 2000. Retrieved 2011-07-19.
  4. Theresa Howard (April 16, 1998). "News America Makes Move to Branded Coupons". Direct Marketing News.
  5. "THE MEDIA BUSINESS; Murdoch Sets Marketing Acquisitions". New York Times. August 16, 1988.
  6. "More High-Tech, Still High-Touch". PROMO Magazine. July 1, 1998. Archived from the original on November 18, 2006.
  7. "SmartSource.com Adds QR Codes To Its Printable Coupons". Business Insider. June 6, 2011.
  8. "SmartSource Hits the iPad". Path to Purchase. February 21, 2012.
  9. "News America Marketing Debuts iPad Coupon App". MediaPost. March 19, 2012.
  10. "The future of savings thanks to Apple". Retailing Today. March 22, 2013.
  11. "News America Marketing Launches SmartSource Xpress for iPhone". Progressive Grocer. March 22, 2013.
  12. "News America Marketing acquires Checkout 51". PR News Wire. July 24, 2015.
  13. "Checkout 51 Website".
  14. "News Marketing Canada Announces New SmartSource.ca Couponing Site". Yahoo! Finance. September 26, 2011.
  15. "News America Marketing Partners With Children's Miracle Network Hospitals To Support Upcoming 'EPIC' Campaign". Children's Miracle Network Hospitals.
  16. "Toys for the Holidays 2011 a huge success!". The Wall Street Journal.
  17. "Children's Miracle Network Hospital Sponsors". Children's Miracle Network Hospitals.
  18. "Easter Seals National Corporate Sponsors". Easter Seals.
  19. "Toys for the Holidays 2011 a huge success!". Volunteers of America.
  20. "MILITARY: Two Pendleton Marines chosen for trip to Super Bowl". North County Times. January 31, 2012.
  21. "SmartSource Coupon Publisher News America Marketing to Send Two Marines to Super Bowl XLVI". MarketWatch. January 30, 2012.
  22. "News America Marketing Continues Tradition Of Sending Marines To Super Bowl". MarketWatch. January 30, 2013.
  23. "Wounded Warrior is Super Bowl-bound". 10 News.
  24. "SmartSource Magazine Marks Veterans Day By Supporting Wounded Warrior Project With Special Coupon Insert This Sunday". MarketWatch. November 2, 2012.
  25. "Believe in Heroes Campaign Raises $16 Million for Wounded Warrior Project". Grocery Headquarters.
  26. "News America Marketing Supports Believe in Heroes(TM) Campaign This Veterans Day". MarketWatch. November 4, 2011.
  27. Peter Lattman (October 31, 2005). "Marketing With Muscle". Forbes.
  28. Jennifer Reingold (July 20, 2007). "News Corp.'s trouble in aisle three". CNN. Archived from the original on October 22, 2012. Retrieved 2011-07-18.
  29. David Carr (July 18, 2011). "Troubles That Money Can't Dispel". New York Times.
  30. Jim Edwards (February 3, 2010). "Valassis-News America Deal Raises History of FTC Antitrust Issues". BNET (CBS). Retrieved 2011-07-18.
  31. "DOCKET NO. C-4160" (PDF). FTC. April 19, 2006.
  32. "FTC CONSENT ORDER PROTECTS COMPETITION IN THE MARKET FOR FREE-STANDING NEWSPAPER INSERTS". FTC. March 16, 2006.
  33. David Glovin, News Corp. Response to Hacking Was ‘Deficient,’ Expert Said, Bloomberg News, July 21, 2011
  34. Floorgraphics Inc. v. News America Marketing In-Stor, (3rd Cir. 2011) Archived 2012-03-29 at the Wayback Machine, vLex
  35. News America Marketing v. Robert T. Emmel, (11th Cir. 2011) Archived 2012-03-29 at the Wayback Machine, vLex
  36. Ed Pilkington, A life unravelled … whistleblower who incurred wrath of the Murdoch empire, The Guardian, profile of Robert Emmel, August 16, 2011
  37. Sen. Lautenberg Letter Archived 2011-09-28 at the Wayback Machine
  38. Michael Isikoff, US looks into alleged hacking by News Corp.'s ad arm, NBC News, July 21, 2011
  39. Jim Edwards (January 29, 2010). "Valassis Could Win $3B From News America in Court, Analyst Says". BNET (CBS). Retrieved 2011-07-18.
  40. Jim Edwards (January 31, 2010). "Why FTC Should Examine Valassis and News America's $500M Settlement". BNET (CBS). Retrieved 2011-07-18.
  41. Jim Edwards (February 4, 2011). "News Corp.'s $600M Dirty Tricks Trial Starts Monday… Unless It Settles". BNET (CBS). Retrieved 2011-07-18.
  42. "Marketeers locked in legal dispute". St. Paul Pioneer Press. August 15, 2000.
  43. Benno Groeneveld (November 7, 2003). "Insignia sued by Murdoch-owned competitor". Minneapolis/St. Paul Business Journal. Retrieved 2011-07-19.
  44. "News America Marketing In-Store, LLC vs. Robert T. Emmel, 343 GA 5-6". UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION. 2011. {{cite web}}: Missing or empty |url= (help)
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