Native Advertising: Fiend or Foe?

Note that I have come this far in a discussion of advertising without addressing what is lately seen as the salvation of advertising and media: native advertising, sponsored content, content marketing, or whatever name it goes by this week — even <gulp!> brand journalism. That is because I think it is dangerous, the wolf in sheep’s clothing. When I started Entertainment Weekly, someone plopped onto my desk the magazine industry guidelines for advertising and advertorials. A wise, old Time Inc. sage said he could summarize the entire book in one sentence: “The reader must never be confused about the source of content.” But native advertising often seeks to confuse the reader, trying to trick her into clicking on what may look, sound, and smell like a headline leading to editorial content but ends up being a long and wordy marketing message. As my dean emeritus, Steve Shepard — who happened to be an author of that big book of magazine rules — complains: They refuse to use “the A-word.” Advertising.

Forbes, one of the pioneers in native advertising, calls the content created by or for advertisers “brand voice” and puts a link next to that label that says, “What is this?” Well, if you have to put that link there then clearly the label isn’t clear. I fear such unclear labeling could dilute the brand. In Forbes’ case, the brand and company were dying when Lewis DVorkin arrived with a solution. He used the brand as candy to attract more than a thousand contributors to supplement a few score editorial staffers, reducing the average cost of content to near nil. Though I’m all in favor of publications opening up to new voices, it must be said that this tactic reduced the average quality of Forbes content. Meanwhile, on Forbes’ business side, president Mike Perlis sold advertisers the opportunity to write (or have written for them) articles or posts to appear next to those written by staffers or contributors; theirs appeared under that label, “brand voice.” After sometime, whenever I saw a link to Forbes on Twitter, LinkedIn, or Facebook, I came to hesitate a few beats before clicking, unsure whether on the other side of that click I’d find (1) a good piece by a Forbes journalist, (2) a good piece by a contributor, (3) a bad piece by a contributor, or (4) the wordy shilling of an advertiser. All of them lived at Forbes.com. That, to me, is the definition of a diluted media brand. The real lesson of Forbes is that there are no easy answers and quick solutions for transforming legacy media companies. DVorkin did what he could — a near miracle — with a diminished brand. He became a key tourist attraction for media executives touring New York. I know because I took many of them to meet him. He generously shared his means and methods. But I also told these executives that the path was not without peril. There are no silver bullets.

When The New York Times entered the native advertising game, it chose its words well, labeling advertisers’ content as a “paid post.” The Times sends more signals that this content is different by presenting it in fonts other than, well, Times New Roman — though I’m not sure what that means to readers. The company’s first foray into sponsored content came from Dell. Though I was impressed with the labeling — even the URL reflects the status: paidpost.nytimes.com — I still wondered why anyone would want to read an essay from this advertiser about entrepreneurial government. What I want from Dell is insight about technology or, more to the point, information about its computers. A later exercise for the Netflix show Orange is the New Black received considerable praise. This article about women in prison was well-written and interesting and the feature was well-designed. But I still have to ask what this enterprise says to the reader. If this story was so compelling, why didn’t the editors assign it? I have to wonder — and can never know — whether the content was softer, choosing not to tackle the roughest stuff about violence and drugs or race and sex in prison because it was meant to subtly market a comedy. I have to ask (and hate sounding haughty doing so): Is this journalism? The Times must worry whether readers will ask just that question about what they read under The Times brand. And if The Times isn’t worried about confusing readers, well, that would worry me.

Perhaps I shouldn’t be quite so concerned. Chartbeat has found that when readers come to a page of what I’ll call, for lack of a better label, real content, they engage with it — that is scroll down through it — 71 percent of the time. But when they come to sponsored (dare I say fake?) content, they scroll only 24 percent of the time. That would indicate that many see the difference. In 2014, the Interactive Advertising Bureau and Edelman, the public relations firm, conducted research with focus groups in New York and Washington and interviews with 5,000 consumers to start to define what it means to do sponsored content right. Asked to distinguish sponsored from editorial content, consumers identified each correctly about 80 percent of the time in entertainment and business sites, but only half that in news sites — a troubling number. I hope to do followup research at CUNY on best practices in labeling, asking how to better assure that readers are not confused. If well-labeled, then sponsored content appearing in the flow of a web site is little different from the advertorials that filled many a page and subsidized the cost of many a journalist over the years in print. I will still wonder why, if readers ignore five words in a banner ad they are more likely to pay attention to 500 words in a paid post. But if publishers can sell it and advertisers want to buy it, if it sells products and burnishes brands and doesn’t confuse readers, if done properly, should I complain?

Nobody sells native advertising better than BuzzFeed, with an entire staff devoted to creating its trademark listicles and quizzes just for sponsors: “How To Rank Your Happiness By Jars Of Nutella®” or “12 Ways Everyone Should Eat Chicken Fries, promoted by Burger King” or “13 People Who Totally Lucked Out, promoted by the New York Lottery” or “Stop Everything, IKEA Names Have Meanings.” (Oops, that last one isn’t sponsored content; hard to tell, eh?) Is this the secret to our salvation? In July 2014, according to Quantcast, BuzzFeed had 120 million people making almost 400 million visits. In the year it was projected to earn a reported $120 million revenue. It received a $50 million investment from sterling venture capital firm Andreessen Horowitz at a reported valuation of $850 million. It planned to use that capital to staff up to 550 employees, a newsroom’s worth of them doing decent journalism under the leadership of editor-in-chief Ben Smith. I don’t buy the argument I hear that the listicles draw audience to the serious reporting; I don’t see anyone breezing by BuzzFeed for “19 Cats Who Are Definitely Planning to Murder You” and sticking around for the coverage of Syria. But I will buy the arguments that the journalism adds a sheen of respectability to BuzzFeed to appeal to some advertisers and that the listicles bring in the revenue to subsidize the journalism, just as journalism has always been subsidized on TV by entertainment and in newspapers by lifestyle, entertainment, fluff, and, of course, classified ads. Cats are the new classifieds.

“Ben Smith, BuzzFeed’s talented editor, does not buy the argument that BuzzFeed is recreating a cross-subsidy, with frothy lists subsidizing the Russian coverage,” Steve Waldman wrote in Washington Monthly. “He believes that excellent journalism is very much in their financial interest. Personally, I think he’s kidding himself — and I hope he keeps on doing it.” Like Waldman, I doubt that listicles are journalism’s salvation. I’m sure you don’t want to see the The New York Times indulging in cat slideshows. Besides, as Chartbeat’s research indicates, native advertising is not as effective as faddish advertisers or desperate media companies would like to believe. I’ll soon cite further Chartbeat research showing that sharing isn’t the indication of engagement it’s been cracked up to be, either. By the time BuzzFeed’s native-advertising and shared-content bubble bursts, I’ll bet its founder and CEO, Jonah Peretti — the genius who also built Huffington Post into a traffic machine — will pivot to his next keen insight about media. I fear media companies will be left still trying to copy his last act.

Sponsored content is not the solution media have been dying for. Neither are listicles and quizzes. Neither are ad marketplaces. Neither were tablets. Neither, as I’ll argue next, are paywalls. Media continue to grasp for straws. In one too many conference panels on this topic, I’ve shouted at rooms of marketers, advertising agencies, and PR people that they should not want to get into the content business. It’s a crappy business looking to be rescued — hell, that’s the reason I’m writing this essay. Stay away, I advise.

“So what is the answer, smartass?” I can hear you asking. I still don’t know. I’ve suggested a few paths to explore. But that’s just the beginning. We must reimagine advertising just as we rethink our core products and services and the essence of media itself: from the ground up. What does marketing look like when stores become showrooms for online marketplaces where prices and profits approach zero? I’ve worked with a retail executive named Shawn Samson who believes that stores and malls will become space for marketing instead of fulfillment. He’s building that vision. What will marketing look like when marketers can know and even anticipate the needs and wants of customers? Yes, it’s creepy to know that Target can sense when a customer is pregnant but with proper and respectful transparency and control in consumers’ hands, I can imagine preemptive marketing being useful — e.g., Amazon knows that when I buy a chainsaw I need oil. What could retail become when — as one of our entrepreneurial journalism graduates, Brianne Garcia, postulated in her groundbreaking business concept at CUNY — customers gain control of transactions, reaching out and asking to be sold: “Hey, fashion companies, I’d like a blouse like the one I just pinned here. Who has something nice? Who has the right price? Who wants me? I’ll share the winner with my friends.” What becomes of design, manufacturing, marketing, and distribution when customers become collaborators, when they move up the chain, to help select, even design, and then sell products, as they can at Quirky and Kickstarter and Local Motors? Advertising? What’s that then?

In The Atlantic, Ethan Zuckerman of the MIT Media Lab declared that taking advertising was the web’s original sin, leading to listicles, click bait, dark-art SEO, click fraud, and surveillance by media and technology companies. So he longed to give up on advertising and atone for the web’s other alleged original sin — giving away content for free — by charging for content. I’ll grapple with that suggestion next. But first, I want to respectfully disagree with Zuckerman that we should give up on advertising. Apart from computerizing the purchase and serving of mass-media impressions, giving advertorials new names, and inventing the popup (for which Zuckerman confesses some unintended responsibility), we’ve seen precious little innovation in advertising. So even from the vantage point of a journalism school, I want to encourage and support more invention in the field. For I’m not ready to give up on advertising’s support of news media.

But I will confess that my one great fear about advertising and media is that they, too, will become irrevocably unbundled, that marketers will no longer have need of media, that they will have their own direct relationships with customers without us. That is my doomsday scenario. Let’s pray it doesn’t happen.

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