The row over brand content – also known as advertorials – is a festival of fake naïveté and misplaced indignation
Native advertising is the politically correct term for advertorial. Or rather, it’s an upgrade, the digital version of an old practice dating back to the era of typewriters and lead printing presses. Everyone who’s been in the publishing business long enough has in mind the tug-of-war with the sales department who always wants its ads to to appear next to an editorial content that will provide good “context”. This makes the whole “new” debate about native ads quite amusing. The magazine sector (more than newspapers), always referred to “clean” and “tainted” sections. (The latter kept expanding over the years). In consumer and lifestyle sections, editorial content produced by the newsroom is often tailored to fit surrounding ads (or to flatter a brand that will buy legit placements).
The digital era pushes the trend several steps further. Today, legacy media brands such as Forbes, Atlantic Media and the Washington Post have joined the native ads bandwagon. Forbes even became the poster child for that business, thanks to the completely assumed approach carried out by its chief product officer Lewis DVorkin (see his insightful blog and also this panel at the recent Paid Content Live conference.) Advertising is not the only way DVorkin has revamped Forbes. Last week, Les Echos (the business daily that’s part of the media group I work for) ran an interesting piece about it titled “The old press in a startup mode” (La vielle presse en mode start-up). It details the decisive — and successful — moves by the century-old media house: a downsized newsroom, external contributors (by the thousand, and mostly unpaid) who produce a huge stream of 400 to 500 pieces a day. “In some cases”, wrote Lucie Robequain, Les Echos’s New York correspondent, “the boundary between journalism and advertorial can be thin…” To which Lewis DVorkin retorts: “Frankly, do you think a newspaper that conveys corporate voices is more noble? At Forbes, at least, we are transparent: We know which company the contributor works for and we expose potentials conflicts of interests in the first graph…” Maybe. But screening a thousand contributors sounds a bit challenging to me… And Forbes evidently exposed itself as part of the “sold” blogosphere. Les Echos’ piece also quotes Joshua Benton from Harvard’s Nieman Journalism Lab who finds the bulk of Forbes production to be, on average, not as good as it was earlier, but concedes the top 10% is actually better…
As for Native Advertising, two years ago, Forbes industrialized the concept by creating BrandVoice. Here is the official definition:
Forbes BrandVoice allows marketers to connect directly with the Forbes audience by enabling them to create content – and participate in the conversation – on the Forbes digital publishing platform. Each BrandVoice is written, edited and produced by the marketer.
Practically, Forbes lets marketers use the site’s content management system (CMS) to create their content at will. The commercial deal — from what we can learn — involves volumes and placements that cause the rate to vary between $ 50,000 to $ 100,000 a month. The package can also include traditional banners that will send traffic back to the BrandVoice page.
At any given moment, there are about 16 brands running on Forbes’ “Voices”. This revenue stream was a significant contributor to the publisher’s financial performances. According to AdWeek (emphasis mine):
The company achieved its best financial performance in five years in 2012, according to a memo released this morning by Forbes Media CEO Mike Perlis. Digital ad revenue, which increased 19% year over year, accounted for half of the company’s total ad revenue for the year, said Perlis. Ten per cent of total revenue came from advertisers who incorporated BrandVoice into their buys, and by the end of this year, that share is estimated to rise to 25%.
Things seemed pretty positive across other areas of Forbes’s business as well. Newsstand sales and ad pages were up 2% and 4%, respectively, amid industry-wide drops in both areas. The relatively new tablet app recently broke 200,000 downloads.
A closer look gives a slightly bleaker picture: According to latest data from the Magazine Publishers Association, between Q1 2013 and Q1 2012, Forbes Magazine (the print version only) lost 16% in ads revenues ($ 50m to $ 42m). By comparison, Fast Company scored +25%, Fortune +7%, but The Economist -27% and Bloomberg Business Week -30%. The titles compiled by the MPA are stable (+0.5%).
I almost never click on banners (except to see if they work as expected on the sites and apps I’m in charge of). Most of the time their design sucks, terribly so, and the underlying content is usually below grade. However, if the subject appeals to me, I will click on native ads or brand content. I’ll read it like another story, knowing full well it’s promotional material. The big difference between a crude ad and a content-based one is the storytelling dimension. Fact is: every company has great stories to tell about its products, strategy or vision. And I don’t see why they shouldn’t be told resorting to the same storytelling tools news media use. As long as it’s done properly, with a label explaining the contents’ origin, I don’t see the problem (for more on this question, read a previous Monday Note: “The insidious power of brand content”.) In my view, Forbes does blur the line a bit too much, but Atlantic’s business site Quartz is doing fine in that regard. With the required precautions, I’m certain native ads, or branded content is a potent way to go, especially when considering the alarming state of other forms of digital ads. Click-through rates are much better (2%-5% v a fraction of a percentage for a dumb banner) and the connection to social medias works reasonably well.
For news media companies obsessed with their journalistic integrity (some still do…), the development of such new formats makes things more complicated when it comes to decide what’s acceptable and what’s not. Ultimately, the editor should call the shots. Which brings us to the governance of media companies. For digital media, the pervasive advertising pressure is likely keep growing. Today, most rely on a chief revenue officer to decide what’s best for the bottom line such as balancing circulation and advertising, arbitraging between a large audience/low yield or smaller audience/higher yield, for instance. But, in the end, only the editor must be held accountable for the content’s quality and the credibility — which contribute to the commercial worthiness of the media. Especially in the digital field, editors should be shielded from the business pressure. Editors should be selected by CEOs and appointed by boards or better, boards of trustees. Independence will become increasingly scarce.