By: Rich Kane
“I like to think of news and advertising as the separation of guacamole and Twizzlers. Separately, they’re good, but if you mix them together, somehow you make both of them really gross.” –John Oliver, host of HBO’s “Last Week Tonight,” during an Aug. 3, 2014 report on native advertising
Credit (or blame) comedian John Oliver for taking the great native advertising debate out of the offices of newspaper publishers and marketing departments and hurling it into the viral mainstream. The 2.9 million YouTube views and more than 2,000 comments that his hilariously snarky 11-minute report has generated since its original airing cannot be denied.
Oliver’s segment was indicative of how native went big in 2014. The New York Times, the Guardian, and other newspapers and media companies have either launched their own in-house native production divisions or partnered with firms that specialize in native content.
And native will keep growing. According to statistics released in November from Business Insider and the Interactive Advertising Bureau, spending on native ads will jump from an estimated $10.7 billion in 2015 to $21 billion by 2018, across all types of native platforms, including social media, display ads and sponsored content.
Sounds great for newspapers, right? Who could argue with a steady stream of revenue that’s only projected to explode?
Lots of people could.
Native ads, which have been defined in different ways—and sometimes given different names like “branded content,” “sponsored content” or “advertorial”—are essentially advertisements that resemble editorial content, and they’ve been around in one form or another for decades. When published in newspapers and magazines, a reputable outlet will clearly define them by affixing a label of some kind that informs the reader that what they’re seeing is a paid advertisement, so discerning readers won’t get the impression that a newspaper is breaching the revered church/state lines between editorial and marketing by appearing to use holy editorial space to sell products. Otherwise, how can readers trust their news outlets to report on something fairly and objectively? Not that people think journalists aren’t already biased and untrustworthy in their reporting, but that’s another topic for another time.
When, for example, Mobil Oil began buying ad space in the editorial pages of major newspapers like the Los Angeles Times and Chicago Tribune in the 1970s to espouse its views on environmental issues, those ads were clearly marked as paid ads, with thick borders and the Mobil logo prominently featured. These types of advocacy ads still bring in millions to media companies each year.
But those old walls have been crumbling for a while, hastened by the decline of newspaper readership and revenue. Once controversial, ads appearing on or wrapped around the front pages of major newspapers are the new normal.
In the Internet age, the divides are quickly becoming even more perforated.
Over the summer, the New York Times posted a native ad that was so compelling that it could have easily passed as an editorial feature, a piece about the rise in the population of women serving time in prison, complete with charts, videos, animation, and a 1,500-word story penned by Melanie Deziel, who has impressive degrees in journalism from the University of Connecticut and Syracuse University’s Newhouse School.
Except Deziel, in her role at the Times, isn’t acting as a traditional journalist, but as a content provider for the paper’s newly-formed native ad division, T Brand Studio. The story was actually created to promote the second season of the Netflix women-in-prison series “Orange Is the New Black.”
A subtle Netflix logo was attached to the entirety of the scrolling piece, as was a “paid post” label and a disclaimer at the bottom that read, in tiny type, “This page was produced by the T Brand Studio, a unit of the advertising department of The New York Times, in collaboration with Netflix. The news and editorial staffs of The New York Times had no role in its preparation.”
“Netflix is a big advertiser, so they reached out to us,” said Sebastian Tomich, the Times’ vice president of advertising and branded content. “Then our team at T Brand started doing some original reporting, shot video footage, and came back with a pretty substantial story. It was work that embodied what we thought native ads should be doing.”
The church/state debate regarding the Times’ native ads, Tomich said, is a false one.
“We are not portraying native ads as journalism, and we are not creating journalism. We fall squarely in the infotainment space. With what we did with the Netflix native, it wasn’t investigative reporting, which is real journalism. Journalists have a responsibility to cover the whole story, and if the newsroom at the Times were to do their own story on women in prison, they would do a different angle on it.”
The Netflix ad certainly got attention in news media circles, among people who debated whether it was a type of native piece that could bolster revenue, or if it was another nail in journalism’s proverbial coffin. Regardless, it managed to crack the Times’ top 10 list of most-read stories, which included regular editorial content. And when it comes to advertisers and eyeballs, a stat like that is all that matters.
One native ad detractor is Tom Foremski, a former Financial Times reporter who left to become a full-time blogger and now edits and publishes the Silicon Valley Watcher. When the Times posted a native ad for Dell in January, he penned a column for the tech site ZDNet that began, “Native advertising is the world’s worst idea, and I can’t believe the New York Times management is so gullible and clueless in agreeing to its publication.”
But how does he really feel? Foremski echoes a sentiment that’s crossed the minds of more than a few.
“It poisons the well of trust that publishers have worked so hard to build, and that advertisers benefit from,” Foremski said. “The next time New York Times reporters write about Dell or anything, its readers will think the story is paid for. For management to not understand that seems diabolically mad. It takes a long while to build that trust, and that trust can be lost quickly.”
While some have heaped praise on native, Foremski said the movement is pretty much doomed to fail, even on costs alone.
“It’s not a sustainable advertising model, especially if you’re not a large newspaper. It costs the Times hundreds of thousands of dollars to produce a single article. And these certainly aren’t helping their revenues. Otherwise, the Times wouldn’t be laying off people like they have.” (Tomich told E&P that production of their native ads can range from $100,000 to as much as $500,000, “and we would spend more if a brand had a more ambitious project.”)
The opinion of native on the ad side isn’t unanimous, either. Kirk Cheyfitz, a former news reporter and current co-CEO of Story Worldwide, which bills itself as “the world’s first post-advertising agency,” has called native “a dead end for advertisers and publishers, a passing fad in the slow demise of traditional advertising.”
“You want people to know it’s your brand, and not masquerade as editorial content behind a publication,” Cheyfitz said. “Native reminds me of the early days of AOL. You knew that if the Internet ever grew up, that AOL would go downhill. And that’s what happened.”
What makes far more sense to Cheyfitz is for brands to own their own content, and for brands to put that content on their own sites and publishing channels, not the New York Times—similar to what brands like Kraft and Red Bull have done, essentially becoming their own media companies.
“It’s always going to depend on the quality of the content and the simple fact of engagement,” he said. “What the Times did with Netflix, it was fabulous content, but how much did it motivate people to watch the series or subscribe to Netflix?”
Cheyfitz suggests that newspapers should instead become de facto ad agencies themselves and work with brands to put great content on their own sites, “essentially creating a brand content creation company in-house, that sits alongside the ad department, and sells that service to brands.”
But what about church versus state? Cheyfitz said that kind of thinking has to change.
“That’s a real 19th century model. Twenty-first century thinking is, I’m a brand, and I want to cultivate my own audience, I want valued content on my site, help me do that. The newspaper business has to get over itself. You can set up reasonable ethical standards. All of this nonsense about church and state? Magazines have been doing it for 100 years. Vogue writes about designers whose stuff they sell. But that doesn’t mean they’re not telling the truth.”
Jason Kint is the CEO of Digital Content Next, formerly the Online Publishers Association, who in a November column he wrote for Medium.com, said that while there are perfectly reasonable concerns with native over the church/state divide, that line has been blurred for a while. A larger concern is one of the quality of native—the kind of high-level native the Times is producing versus the Buzzfeedy clickbait stories like “22 Kittens That Look Like Hitler,” imbedded in a postage-stamp-size box on many a newspaper website.
“That’s the real church-and-state question,” Kint said. “It’s about quality and credibility on one side, and these parasitic click-chasers on the other. There’s such a huge difference between the Times’ Netflix ad and clickbait-type stuff, and those types of ads, which often get lumped under the native category, can hurt the trust of readers.
“But regardless of whether it’s advertiser or editorial content, if the content is good, I don’t think consumers care much anymore, or even if they feel they got tricked into clicking something,” Kint continued. “If you watch the way people consume news now, especially millennials, they don’t make that much of where their information is coming from.”
Or do they? In June, a Contently poll of 542 Internet users between ages 18 to 65 revealed that nearly 67 percent have felt deceived when an article or video turned out to be sponsored by a brand. Fifty-four percent said they don’t trust sponsored content, and 66 percent weren’t as likely to click on an article sponsored by a brand. However, an Edelman Berland study released in July found that 60 percent of news consumers are open to native advertising when it focuses on telling a story instead of merely peddling a product.
Other studies echo Kint, finding that there’s an indifference among younger people in particular as to how native ads are labeled—that many aren’t sure what the phrase “sponsored content” even means when they come across it during a frenzied session of clicking and scrolling. So it would stand to reason that younger news consumers will care less and less about what form their news takes, whether it’s paid for by a corporation or not. Ultimately, they just want something interesting to look at.
“I think that branded ad content is the future,” said Tomich. “That content can travel to the social Web. As brands get smarter and more involved in digital ads, I think we’ll be seeing an evolution, an ad environment where editorial-like content is a tool that inspires audiences and gets them introduced to their brands.