News

Native advertising: business beats news

By Martin Hickman

Distortion, falsehood, and phone hacking are the well known ethical problems in British journalism. A less well known one is the collapse of the division between reporting and advertising.

In its slyest manifestation, an advert masquerading as a story cheats a reader into thinking they are getting objective facts when the message has been covertly skewed. At its best, ‘sponsored’ or ‘branded content’ may allow under-pressure news outlets to cover stories that would otherwise go unreported.

In a world of rapidly shrinking news revenues, the New York Times and other leading media brands are targeting the public with commercialised content in a way they didn’t in the past. Others such as the British Broadcasting Corporation still shun advertising, at least at home.

The debate about stories-as-advertising is nuanced. It’s not always wrong, nor is it always necessary, but it is vital to recognise it is an important trend, and to ask what it means for journalism, and for the public, now and in the future.

Commerce has long shaped journalism: there was never a golden age when money didn’t count.

Newspaper editors have always been inclined to put a news-stand friendly story on the front page; nor do they usually subject their proprietors, or their businesses, to much scrutiny. Adverts inevitably influence the placement of stories… a story exposing the sales tricks of food stores won’t sit next to a supermarket ad.

And there has always been the straightforward advertiser-bought article: the “advertorial”. Historically the advertorial was designed with a different style and font, so readers could tell adverts and editorial apart.

The advertorial is still here, but it more closely resembles an ordinary story. It now also has some super-charged mutants: “branded content” and “sponsored content.” Another term is “native advertising” — an advert that looks like a story.

Is it a story or an advert? Well, actually, it’s both.

Fast-growing news and lifestyle sites derive much or all of their revenue from branded content. On the home pages of their sites are pieces of journalism-lite content sponsored by sportswear manufacturers, carmakers and banks, among others. These articles run alongside the more serious journalism they fund.

Faced with falling revenues, traditional newspapers have decided to join their digital rivals and set up special teams to develop content for brands.

At the New York Times, its “native ad content hub”, T Brand Studio, made a 1,500-word article for its website, with video, charts and audio, to promote a Netflix jail drama, Orange is the New Black. In an interview, Kaylee King Balentine, director of T Brand Studio, explained that since what Netflix said about the reality of being a woman in prison was mirrored by the show’s plot-lines the feature was an “authentic story.”

There are more insidious forms of commercial influence, such as minimising or ignoring stories. There are allegations of this happening in the UK media.

In its slyest manifestation, news stories are run solely to promote a commercial product. News judgement is subjective, so it can be argued any particular story was legitimate. However, it seems entirely possible, if not probable, that journalistically worthless stories have appeared in Britain’s national media primarily to satisfy advertisers.

Two business leaders, each running a household name company known to everyone in the UK, told me separately, independently, and interestingly without any prompting, that favourable coverage for their companies was on offer at one national newspaper in return for buying display advertising.

It is reasonable to think these bogus stories would be more trusted than a normal advert, because they wear the clothes of objective journalism, being the equivalent of the wolf dressed as the grandmother in Little Red Riding Hood.

The simple reason why the wall between advertising and editorial is collapsing is the funding crisis in journalism. Before the internet, when information was expensive to disseminate (needing to be printed on paper and trucked about) different kinds of information — about politics, business and sport — were bundled up in a newspaper. It was more cost-effective for advertisers to buy a space in this package than to distribute their material separately and more specifically.

Now the bundle is dying. Rather than buy a newspaper, consumers can freely find the TV times or football scores or share prices online, even watch Prime Minister’s Questions streamed live at Parliament.uk.

Advertisers can target advertising more directly through search terms and interests.  So advertising has moved from print to online, where half of it goes to the giants of search and social media, such as Google, Yahoo, Facebook, and Twitter. Advertising revenue for US newspapers, for print and digital, plummeted from $47 billion in 2005 to $16 billion in 2014, according to the Newspaper Association of America.

This cash crash has left newspapers reeling, sacking staff and seeking to rival the branded content of digital start-ups.

In essence, the fall of the weighty printed press ­(illustrated by the closure of the Independent’s print edition) and the rise of smaller digital challengers have changed the relationship between advertisers and the news media. Whereas news organisations were once dominant, now advertisers are king.

For visual evidence, open a newspaper and look at the adverts. Once they were confined to the left or right hand corner of a page. Now they sprawl across page-tops in outlandish and unusual shapes, forcing the news to fit around them.

What this changed dynamic means is that the public are sometimes unaware that what they are reading is not truly impartial, motivated purely by a desire to inform or entertain, but is there, at least in part, because of a commercial agenda: to sell them something.

This is a marked change to the past, when advertising and editorial were separated. Advertisers bought a chunk of the paper, but the rest of it was there for journalists to use as they saw fit, notwithstanding the need to sell papers.

This line was not always respected: sometimes an advertiser would complain about an especially unhelpful article. An editor might frown upon a story critical of an especially valuable advertiser, leading other executives to spike the article or, more likely, to express a lack of enthusiasm to the reporter who wanted to pursue it. There was also the odd personal friendship, or golf club chumminess, between an editor and shady businessman.

But, based on my own experience in newspapers between 1993 and 2013, these interventions happened surprisingly rarely: it was embarrassing. Journalists agreed there had to be a border between editorial and advertising. It may have been bent out of shape occasionally, but everyone knew it existed. The line has now become so blurred that it can barely be considered to be a line at all. It’s more like a zone, where content is neither advertising nor editorial, but both.

And it is growing.

Does it matter? A significant portion of consumers feel misled by “native advertising”. In research for the Reuters Institute, 33 per cent of British consumers tended to be disappointed or were very disappointed when they later discovered an article had been sponsored by a company. In the US, where sponsored content is more advanced, the figure was 48 per cent.

This disappointment could spread disenchantment and turn people off the news.

At the same time the public dislike straightforward advertising. Around half of people in the UK and US now use ad-blocking software. If big business can’t get through conventionally using display ads, it will find another way.

Some journalism seems to be well protected. Ofcom polices commercial television in Britain and the public directly funds the BBC through the licence fee.

But these mechanisms could change. An entire generation might grow up not knowing the value of impartial news, living in a world where information is imparted only when it is monetisable to business.

The idea that facts would be for sale to the highest bidder is a poor prospect for democracy and for an efficient economy. Surely, it is unlikely to happen; we still have an impressive diversity of print and digital media in the UK. Yet it is inching closer by the day.

Martin Hickman is a board member of Impress, the new press regulator.

The views expressed here are solely those of the author and do not necessarily reflect the views of IMPRESS, its Board or its staff.