Blog Post

When advertising becomes content, who wins — advertisers or publishers, or both?

Stay on Top of Enterprise Technology Trends

Get updates impacting your industry from our GigaOm Research Community
Join the Community!

Andrew Sullivan, the former Daily Beast writer who recently launched his own standalone publishing venture, has made it pretty clear that he doesn’t like advertising, which is why his site is supported entirely by reader subscriptions. And he also made it clear in a recent series of posts that he doesn’t like the growing trend of sites like BuzzFeed using what they call “sponsored content” as a replacement for traditional advertising — something he suggested was ethically questionable for media entities of all kinds.

Like it or not, however, this phenomenon is becoming more and more commonplace — and not just at new-media ventures like BuzzFeed but also at traditional publishers like The Atlantic. Is it the savior of online media, or just another mirage in the advertising desert? This is a question we are going to discussing at length at paidContent Live in New York on April 17, including a panel entitled “The future of native advertising: Blurring ads and content.”

If it’s useful, does it matter if it’s sponsored?

The principle behind what some call sponsored content and others refer to as “native advertising” (and newspapers and magazines called “advertorial”) is that marketing messages and other forms of advertising are more successful when they look and feel just like the other content that surrounds them, rather than an annoying and/or irrelevant interruption. If you can make your message useful, the theory goes, then users are more likely to click or remember.

Twitter good and evil

The most obvious example of this is the kind of advertising that both Twitter and Facebook offer: namely, features like “promoted tweets” and “sponsored stories.” They appear in a user’s stream just like any other status update or message, but they are advertising that is based on — and in some cases even includes — the activity of a user around specific topics (although Facebook’s version has caused some controversy over the inclusion of status updates).

BuzzFeed, whose president Jon Steinberg will be on our paidContent Live panel, is one of the leading proponents of this concept: co-founder Jonah Peretti has talked about how the startup decided from the beginning not to use traditional banner ads and other forms of advertising, but to pin its hopes on sponsored content. But critics like Sullivan have complained that the sponsored content is too hard to distinguish from the regular content at BuzzFeed.

Another form of native advertising is the kind that Forbes magazine specializes in, with its BrandVoice program. In a nutshell, the magazine provides marketers and advertisers with a platform that is indistinguishable — apart from the brand names and disclaimers that are posted on their pages — from the content that appears elsewhere on the magazine’s website.

Advertising is just another form of media

Advertising, b&W ad

Forbes‘ chief product officer Lewis D’Vorkin, who will also be on our panel at paidContent Live, has written about the idea behind this platform, and the idea is that branded or marketing-related content should be given a status that is equal to that of the magazine’s traditional content, and that it should succeed or fail based on whether it is actually useful to readers or not. So the blog written by someone who works for a brand or corporate sponsor looks and functions almost exactly the same as any other blog written by a Forbes staffer.

A whole separate category of sponsored content or native advertising is what some marketers like to call “brand journalism,” and Kyle Monson of Knock Twice — a former journalist who used to run the “brand journalism” practice at JWT in New York — is going to be on our paidContent Live panel talking about that. This approach sees brands like Coca-Cola and Qualcomm and Intel creating their own content or journalism around topics that are of interest to their customers, without making it explicitly an advertising message.

So with brands becoming publishers and producing “brand journalism,” where does that leave traditional media companies? And are the blurring lines between sponsored content and traditional media a problem, or are critics like Andrew Sullivan just reluctant to embrace this new way of doing things online? Those are just some of the questions we will be tackling at paidContent Live on April 17, so I hope you can join us to continue the debate.

paidContent Live: April 17, 2013, New York City. Register Now

Image courtesy of Shutterstock / Gl0ck and The Everett Collection

19 Responses to “When advertising becomes content, who wins — advertisers or publishers, or both?”

  1. Trace Cohen

    What publisher wouldn’t take money to publish content they don’t have to produce? It’s found money and if done correctly helps the publisher, the advertiser the reader.

    Will this solve the problem of a broken business model for most publishers? Definitely not sustainable.

  2. Let’s push the discussion beyond news and move it over, to book publishing. We ( are in the process of experimenting with a free children ibook, about pets adoption.

    Will be free if we find a sponsor, and looking for one is a total transparent proposal to the readers. The reader, of course, will have the option to pay the full price of $0.99 if the whole sponsored content concept is found abhorrent.

  3. franchesco teratoma

    Like all advertising, this article is self-serving. Who cares, change channels if you don’t like it.

    “Brand Journalism” is, at its best, a bovine scatology who’s proponents were no doubt conceived by just putting the tip in.

  4. Ironically, Mr. Ingram, or by design, you have written an advertorial for your upcoming conference…..LOL. And that’s OK…except…I read the headline, read the article, and instead of answering any questions or taking a point of view about the whole issue….what I got was a list of questions that would be…well….maybe answered if I had the time to come to your great conference. Hrrrrrrrrrmmmmmmmmpppppppffffffffffff!

    I don’t mind advertorial at all…..but let’s just let it be known what it is: An ad. And that’s ok. Let’s just mark it as such, OK?

  5. I’m surprised there’s no mention of Google AdWords in this piece. It is, without question, the best example of native advertising. Not only are the ads indistinguishable from the content, they’re as relevant — and in some instances, even more relevant — than the organic results themselves.

  6. It really depends on the market, and I don’t think that there’s a definitive answer. However, you cannot undervalue this kind of exposure for an advertiser, the benefits can include print run-ons for promotional use as well as long lasting online exposure. The kudos and authority given to a product or service when associated in this way with a reputable publication is extremely valuable. As a ballpark figure you should probably look at at least 4 times your on the page advertisement rate, but I have experienced publishers charging far higher than this..

    • Hi

      Would anyone be able to direct me to some paid for content in place I could look at to get an idea of where it appears on sites/no. of words etc etc

      Thanks in advance


  7. Tom Wright

    Advertorial has been rehabilitated and given a new name so it can avoid regulation – much in the same way that spamming consumer and business buyers has become ‘marketing automation’.

    There’s a place for sponsored content, there’s a place for vendor content, there’s a legitimate opportunity for publishers to make money from it.

    There are those publishing ventures where the editorial is so thin, so PR based, and so stretched already this won’t make a difference – celebrity publishing springs to mind.

    In the B2B world it would represent a deceit, and risks totally undermining trust with readers.

  8. To Rex’s point: I was going to say, my first major editorial job was as editor of the “advertorial” sections of a long-dead daily newspaper, the Las Vegas Valley Times, in 1980, in very early adulthood. Advertorial’s nothing new. My main objection to the current state of things is that I’ve seen some sites run a mix with too many “sponsored posts.” The only “sponsored posts” we run are posts that introduce first-time advertisers (local SMBs – we don’t take or solicit national advertising) to our readers. They are clearly marked as such. And in regular coverage, we always identify our sponsors as such on first reference, regardless of whether it’s a news story, event preview, or calendar listing. I don’t know how deeply the readers care, but I care.

  9. Rex Hammock

    As someone who has been professionally engaged for 25 years developing and managing all types of media that are used by companies to create and maintain relationships with their customer, I can’t think of two more ridiculous neologisms to describe what’s taking place than “content marketing” or “native advertising”

    Call it whatever you want to call it, but you’d have to ignore (or be ignorant of) the history of advertising, marketing and mass media to not understand or accept that companies (marketers) have been engaged in “sponsored media” since Henry Ford created a movie studio at the company (not to mention his anti-semitic newspaper foray) or Proctor & Gamble set up a “content” company in the 1940s –

    Did “As the World Turns” maintain editorial integrity?

    Advertorials, infomercials, custom publishing…been around forever.

    The only question now is, do those companies even *need* to sponsor “independent” media sites?

  10. It is possible for an article to be ‘sponsored’ by a commercial company and maintain its integrity, and the key to this is transparency. If a clear message such as ‘This article is supported/sponsored by John Doe Inc’ is attached to the piece, readers know exactly how funding or research for the article has been obtained.

    In these tough economic times, all publishers need to be exploiting every revenue stream they possibly can, but this need not compromise the quality of their content.

  11. Anna Graham

    This article paid for by the committee to promote paidContent Live on April 17. Be sure to attend the paidContent Live on April 17 to fully appreciate the contents of this article. Also, when you attend paidContent Live on April 17, you’ll get a free t-shirt. Plus, the paidContent Live on April 17 will include free virtual beer. Mark you calendars for paidContent Live on April 17 so you don’t miss paidContent Live on April 17. We hope you get the message loud and clear, which will be repeated again and again at paidContent Live on April 17.

  12. It was inevitable. I used to produce TV news stories that were commissioned by PR firms on behalf of corporate clients. Our stories appeared on network, cable and local market stations across the country, reaching millions of people.

    The practice was widespread, and viewers could not distinguish the paid content from the editorial.

    Ultimately, the use of the technique by the TSA under the W Bush administration was exposed as “fake news” by leading newspapers, there was public backlash and the FCC stepped in to fine newsrooms that aired outside content without attribution.

    Online, there is nobody to police this practice. It will proliferate.

    Caveat emptor.

    • MeInNYC

      I’m not convinced the general public is all that critical. Requiring disclosure for company-sponsored/PR Agency developed content is exactly how the process should work (to protect people from themselves, at least). The Dish, The Daily Beast, BuzzFeed et al are opinion-based mediums not institutions that have earned credibility through peer review or stand-up to skeptical inquiry over time. How do you police a conversation with a friend?