News America Marketing, often referred to as just News America, is a marketing business owned by the News Corporation

News Corporation

News Corporation or News Corp. is an American multinational media conglomerate. It is the world's second-largest media conglomerate as of 2011 in terms of revenue, and the world's third largest in entertainment as of 2009, although the BBC remains the world's largest broadcaster...

. It is one of three companies in the United States (the other two are Valassis Communications

Valassis Communications

Valassis Communications, Inc. is a publicly traded U.S. Corporation with subsidiaries that provide various media and marketing services in the United States, Europe, Mexico, and Canada, and one of the largest coupon distributors/processors in the world....

 and Insignia Systems) that control almost all the in-store ads and grocery coupons in the United States.

One major division of the company is SmartSource iGroup, formed in 2000 from acquisitions and investments. 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. The SmartSource brand began in 1998.

Operations

In the fiscal year ending June 2005, the company had 28% operating margin

Operating margin

In business, operating margin — also known as operating income margin, operating profit margin and return on sales — is the ratio of operating income divided by net sales, usually presented in percent....

s, the highest of all News Corporation businesses. Its annual revenues were $1.1 billion, an increase of 9% from the prior year. 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.

Legal cases

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

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.

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

• 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) brought by a company called Floorgraphics went to trial, accusing News America of hacking
  Hacking
  Hacking may refer to:* Computer hacking, including the following types of activity:** Hacker , activity within the computer programmer subculture** Hacker , to access computer networks, legally or otherwise...
  
   into Floorgraphics’s password-protected computers. Much of the lawsuit was based on the testimony of Robert Emmel, a former News America executive who had become 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. On 20 July, US Senator Frank Lautenberg wrote a letter to the Department of Justice requesting that the on-going FBI probe include the Floorgraphics hacking allegations. On July 21, 2011, it was reported that representatives of the United States Department of Justice
  United States Department of Justice
  The United States Department of Justice , is the United States federal executive department responsible for the enforcement of the law and administration of justice, equivalent to the justice or interior ministries of other countries.The Department is led by the Attorney General, who is nominated...
  
   and the FBI had begun investigation into the Floorgraphics allegations.

• In 2010, the News Corporation paid $500 million to settle a case brought against it by Valassis Communications
  Valassis Communications
  Valassis Communications, Inc. is a publicly traded U.S. Corporation with subsidiaries that provide various media and marketing services in the United States, Europe, Mexico, and Canada, and one of the largest coupon distributors/processors in the world....
  
  , after that company had won a $300 million verdict in state court in Michigan. The lawsuit by Valassis was based on claims that News America had gained market share
  Market share
  Market share is the percentage of a market accounted for by a specific entity. In a survey of nearly 200 senior marketing managers, 67 percent responded that they found the "dollar market share" metric very useful, while 61% found "unit market share" very useful.Marketers need to be able to...
  
   by forcing its packaged-goods customers to sign long-term insert contracts or risk huge price increases on their in-store advertising displays The settlement included News America entering into a 10-year shared mail distribution agreement with Valassis Direct Mail, a Valassis subsidiary.

• At the beginning of 2011, in a case in Minnesota brought by Insignia Systems, News America faced more than $600 million in fines. The News Corporation paid out $125 million to settle the allegations of anticompetitive behavior and violations of antitrust laws. 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, 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.

External links

• News America Marketing official website
• SmartSource official website
• Profile at Bloomberg Businessweek
• David Glovin, News Corp. Response to Hacking Was ‘Deficient,’ Expert Said, Bloomberg News, July 21, 2011, on Floorgraphics lawsuit