UK media giant the BBC, a perceived bastion of editorial independence, this year moved to expand BBC Worldwide activities into blended advertising-editorial client solutions. It’s a sign the emerging practice now referred to as native advertising is becoming mainstream.

Use of embedded approaches in advertising and promotion have been growing for several years and their forerunners—product placement and advertorial—have been around since the early 20th century.

In case you have missed the emerging debate, advertisers and marketers are turning to new approaches to combat the effects of declining reach and impact of traditional advertising. Persuasion knowledge research shows when consumers view content as intentional commercial or political persuasion, they are less likely to be persuaded.

New advertising approaches go by many names including native advertising, branded content, brand integration, and brand placement. What these techniques have in common is that paid advertising and promotional messages are embedded in media content so as to be at least partially hidden and sometimes invisible to media consumers. Along with renewed interest in advertorial, other embedded content creeping into our daily media diet includes paid online posts, comments and reviews; digital publications that are presented to appear as independent media, but are sponsored; and sponsored content on social media.

In the U.S., Forbes magazine, The Atlantic and The Washington Post have launched native advertising-cum-advertorial products. Forbes launched BrandVoice in 2011, and Atlantic Media followed suit with products such as its Ideas Lab, a custom-built digital publication described as “an interactive platform around the most critical issues impacting America’s economic future,” which is fully sponsored by GE.

In Australia, Fairfax Media launched Brand Discover late last year and News Corporation has been publishing and broadcasting various forms of embedded advertising content for some time.

Media revenue from various forms of embedded advertising and promotion was estimated at $8.25 billion worldwide in 2012 and is forecast to double by 2016, indicating that these emerging formats are substantial and growing.

So what’s the problem? Media companies need to find new revenue streams to address their declining fortunes and avoid collapse, which would not be good for marketers or society.

The problem, according to critics, is at least two-fold. First, and foremost, journalists, media academics, and some consumer groups are concerned there are a lack of guidelines and codes of practice to preserve the important “church-and-state” division between advertising and editorial and maintain transparency in the source of media information.

Some media and marketing industry bodies have produced updated guidelines to protect consumers. For instance, the American Society of Magazine Editors (AMSE), which pioneered guidelines in response to concern about print media advertorials in 1982, released updated guidelines on native advertising, sponsored content and paid links in September last year. Also, the Branded Content Marketing Association has released guidelines for what it calls “advertiser funded programming” in which it states that “editorial independence is absolutely central”. But this seems not to be the case in many instances.

The Atlantic’s first foray into sponsored editorial content in 2013—an article titled “David Miscavige leads Scientology to milestone year,” caused reader outrage and resulted in an apology from Atlantic Digital general manager Kimberly Lau who admitted the article “read like warmed-over PR.”

Not surprisingly, journalists are concerned. The New York Times has come out publicly criticizing so-called native advertising in a number of articles. Last year its media writer noted that “almost all of the publishers running branded content say they abide by the traditional church-and-state separation, [but] the sponsored content runs beside the editorial on many sites and is almost indistinguishable.”

The ABC’s Media Watch program drew critical attention to these practices in July 2013 and broadcast a second critique on April 21 this year expressing concern about the activities of Atlantic Media in the U.S. and Fairfax Media in Australia, warning of consumer deception and corruption of journalism.

Along with major questions about the ethics of these forms of embedded promotional content, a further key question is whether the techniques work. Despite claims that embedded techniques will be the “salvation” of the troubled advertising industry, marketing academics have noted that most measurement still relies on impressions (the number of times a story has been accessed or viewed), with little evidence of awareness, attitudinal or behavioral outcomes.

Given still unanswered questions about its effectiveness, significant ethical questions about some embedded practices, and the risk of a further media audience backlash—not to mention potential government regulatory intervention—advertisers and marketers should pay attention to self-regulation and standards. If they don’t, they could see the media and advertising industries plummet further into a crisis of credibility, as well as an economic crisis.

Jim Macnamara is professor of public communication at University of Technology, Sydney, Australia. Contact him at jim.macnamara@uts.edu.au.


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Andrew S Ross | Monday, August 18, 2014

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