"There is a furor on the buy side," said Mike Perlis, CEO of
Forbes. "The buyers are all asking for sponsored content."
Marketers are projected to spend $1.9 billion on sponsored
content this year, up 22% from 2012, according to eMarketer. By 2017, it predicts that number
will reach $3.1 billion. Those dollars represent a bright spot in a
largely bleak forecast. Spending on magazine and newspaper print
ads is expected to contract to $32 billion in 2013 from $33 billion
last year, eMarketer forecasts.
For marketers, the appeal is simple: Audiences understand that
advertisers have a commercial relationship with a publisher. By
wrapping ad messages in a format that looks like editorial
content—and calling them something else, such as "sponsored"
or "partner" content—they hope to trade on the trust and
goodwill editorial has built up with the audience. A bit of
confusion is inherent in the appeal.
It's a tricky trade-off. Publishers would like to see some of
that $1.9 billion such ads bring in, but should be concerned about
what advertising's encroachment means for their brands. Already ads
have jumped from the right rail into news streams. So-called native
ads commonly mimic headline and editorial styles and fonts. Some
publications go so far as to enlist their writers to create
sponsored posts for advertisers to ensure the right editorial tone
is struck. BuzzFeed offers courses to media agencies on its
particular brand of storytelling. The line between advertising and
editorial is getting really blurry.
Guidance could be on the way, though. Last week the Federal
Trade Commission said it would hold a workshop on native
advertising in December. The agency wants a better understanding of
best practices and whether consumers are able to recognize
sponsored content as advertising.
Until there's a standard for what goes too far, publishers are
leaning on their own version of the famous Supreme Court measure
for obscenity: "I know it when I see it." Occasional blunders are
inevitable since even the best gut instincts have off days -- and
the ultimate risk is that such moves result in an outcome that's
bad not just for publishers but marketers, too: jaded, distrusting
One publishing executive says two or three advertiser requests
for proposals come in every month that "don't feel right." They ask
for ads that too closely resemble editorial content or place
editorial content in an ad without clearly demarcating it as such.
"They are asking for [more editorial control]," the exec added.
One of the seven sponsored sections on Business Insider, the
Future of Business, promises the site's take on the subject
alongside posts from sponsor SAP. Editorial posts carry a label
saying SAP sponsors the section, but don't explain that SAP has
some control over the editorial product in the section.
Michael Brenner, VP-marketing and content strategy at SAP, said
his team suggests ideas to Business Insider's editorial directors,
who create a list of potential topics and headlines for the
SAP reviews that list and identifies the ones it thinks will
make the "biggest impact in terms of readership and social shares,"
Mr. Brenner said. Business Insider writes and publishes the stories
the site's editors think are best.
Evan Spector, senior partner-associate director of print at
Group M, said his clients, which are among the top 100 advertisers,
don't want to mislead readers with sponsored content. But, he said,
marketers want innovations that make their messages stand out.
"It's our job to push the boundaries as far as we can, as long as
we're not trying to deceive the reader," Mr. Spector said.
Less to lose
Don't blame revenue-hungry media brands for the rise of
sponsored content; it's part of a larger marketing trend. Media are
no longer the gatekeepers to distribution and marketers have
realized they can create and push messages to people on their own
-- and when done well it's not only effective but more useful to
consumers than traditional ads. As marketers shift budgets from
traditional advertising to content marketing, publishers must try
to grab some of those dollars. Increasingly they're realizing that
while brands can create content, publishers still hold the biggest
Pure-play digital sites, such as BuzzFeed, Business Insider,
Mashable and Gawker, have less to lose by relaxing publishing's
traditionally strict standards than legacy media brands, according
to Outsell media analyst Ken Doctor, because they have less of a
reputation to uphold and advertising is their chief revenue
"Online-only companies, while they have a great advantage not
having legacy costs, have a great disadvantage they don't have a
built-in paid circulation business," he said. "They have to look
for other ways."
Brands like The New York Times and The Wall Street Journal risk
alienating the readers who value their content enough to pay a
premium for it, Mr. Doctor added. But even the old guard needs new
revenue streams. The Wall Street Journal publishes three special
sections underwritten by Deloitte -- Risk and Compliance, CIO
Journal and CFO Journal -- where editorial stories by Journal
reporters run alongside a box of content marked as sponsored.
Deloitte has no influence over which editorial stories appear, a
Wall Street Journal spokeswoman said. Advertising Age, for its
part, runs sponsored posts; they're marked as such and the sponsor
has no influence over Ad Age editorial content. And the Times looks
poised to introduce sponsored content, despite its top editor, Jill
Abramson, casting doubt on the idea earlier this year. In July it
hired Meredith Kopit Levien, group publisher and chief revenue
officer at Forbes, to fill the company's
top ad post. She was an architect of BrandVoice, which allows
marketers to publish directly to Forbes.com. That venture
has attracted more than 30 sponsors since its launch in 2010 and,
for the first time, helped digital revenue surpass print at Forbes
in the first half of 2013.
"We would never run any advertising that could be mistaken for
editorial content," a Times spokeswoman said in an email, "but we
are exploring ways to use journalistic-storytelling techniques to
present a narrative for our advertisers."
The new transparency in online publishing is something closer to
translucency in which fine details are hidden.
Mashable, for example, has a branded content team that serves as
a liaison between the newsroom and advertisers. Adam Ostrow, the
site's chief strategy officer, said the team gives potential
clients a menu of stories and topics that its newsroom wants to
cover, before the editorial staff pursues them. This list might
include stories and their synopses or a general area of interest.
For instance, Marriott paid for a branded series on the future of
travel written by Mashable's tech editor, Pete Pachal.
Editorial staff does not have direct contact with advertisers --
leaving that to the branded content team -- which Mr. Ostrow
maintains helps protect newsroom integrity.
The intent may not be to trick readers, but they're still
feeling duped by sponsored content. According to an October 2012
poll by MediaBrix, a majority of people felt misled
by some form of sponsored content online. In perhaps the most
public outcry over this, readers of The Atlantic protested earlier this year
after they felt misled by an advertorial on Scientology. The swift
backlash was followed by an apology, a retraction of the sponsored
post and, according to an Atlantic spokeswoman, a review of its
"What magazine media sells is the relationship between the
publication and readers," said Sid Holt, CEO of the American
Society of Magazine Editors. "Fundamentally, what people are
interested in when they look at magazine and magazine brands on
digital platforms is the value and integrity of the content."
Kelly McBride, a faculty member at journalism think tank the
Poynter -- Institute, said publishers adopting sponsored content
are not locked in a race to the bottom, but rather a race to
"All of these new upstarts are just throwing out the rule book,"
she said. "Essentially, what the they're doing is starting from a
new business model. The reason they can do that is because the old
business model is dead. From a business perspective," she added,
"sponsored content makes total sense."
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