Madison.com’s Watermark Ads Draw Fire

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By: Nekoro Gomes

A new online advertising technique instituted on the Madison.com site has ignited a debate over the delicate balance between editorial and advertising content on the Web.

The Web site, which serves as a host page for the Capital Newspaper group’s Capital Times and the Wisconsin State Journal in Madison, Wis., currently displays the AT&T logo as the news site’s “wallpaper.” AT&T’s slogan, “Your world. Delivered,” is the first thing visitors to the Madison.com site see before the text and headlines of the day’s news loads. The effect is subtle and not dissimilar to the controversial “watermark” ads some print newspapers instituted last year.

The ad experiment is part of an “off of the rate card” deal that Madison.com worked out with AT&T Inc. this past summer. The Web site, working with an interactive ad agency, developed the wallpaper concept as a way to take advantage of the massive branding campaign to promote the merger between SBC and AT&T.

AT&T’s shift from long-distance telecommunications to IP-based network services has made online advertising a prerequisite for reaching their target audience, and Madison’s educated, techno savvy population seems like a good fit. According to the Capital Newspaper group’s online media kit, 81% of all Madison Metro area adults have used the Internet in the past month.

Colin Schmies, the online sales manager for Madison.com, is excited by the opportunities the campaign poses for online newspaper sites, and said in an e-mail statement that the “wallpaper” ad alone has accounted for 2% of the site’s projected ad revenue for the year.

“The campaign has definitely generated a great deal of interest both positive and negative,” Schmies said. “I am very happy for two reasons. One, we are thrilled that major advertisers in the U.S. are recognizing the value that newspaper Web sites across the country can deliver. This is a great sign for our industry. Two, we had an opportunity to spark a debate and that can only be beneficial as newspaper Web sites move forward. We will only realize effective ad formats through trial and error.”

But some online newspaper editors have expressed reservations about a type of online advertising that cannot be dismissed as easily as the pop-up or re-direct ads that are mainstays on other newspaper Web sites.

“I think the trend is towards this kind of stuff,” said Ken Sands, online publisher of the The Spokesman-Review in Spokane, Wash. “But we have to draw the line somewhere and if we don’t, the line will continue to shift and erode our journalistic integrity.”

Throughout the week, Madison.com’s readers have used the site’s online forum to register their complaints about the wallpaper ads. The tone of the discussion has been largely disapproving, with users arguing that the watermark looks “tacky” and makes text illegible.

“I am boycotting this site until the background is fixed,” one online user posted, “JSOnline [the Web site for the Journal-Sentinel in Milwaukee] will suffice for me, where I can actually read the headlines on the main page?you will have less users and more money. Way to sell out!”

Schmies is distributing a statement to users who complain about the technique stressing the fact that the site’s content is free because it’s ad-supported. The statement makes the point that the watermark is designed to generate brand visibility for AT&T — the watermark image is not linked to take a visitor to the company’s Web site — and so far it’s been successful.

The question many newspapers in the coming year will have to consider is whether online news sites can continue to leverage such revenue generating opportunities in a way that keeps both readers and advertisers happy.

“We have nothing besides our credibility and when you take steps like this it erodes our credibility,” said Sands. “If AT&T called me today and said they wanted to give me money to advertise on our site, I would fall over my chair willing to do it, but I would want to do it on my terms.”

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