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May 29 2013

13:27

In the End Was the Word and the Word Was the Sponsor’s

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We used to know what ads were. They had borders around them — black lines in print, a rare millisecond of dead air on TV, the moment when the radio host’s voice became even friendlier, letting us know he was now being paid to peddle.

Today, under many ruses and many namessponsored content, native advertising, brand voice, thought leadership, content marketing, even brand journalism — advertisers are conspiring with desperate publishers to erase the black lines identifying ads.

When I started Entertainment Weekly, a sage editor sat me down and summarized in one sentence the magazine industry’s voluminous rules about labeling what we then called “advertorials”: “The reader must never be confused about the source of content.”

Confusing the audience is clearly the goal of native-sponsored-brand-content-voice-advertising. And the result has to be a dilution of the value of news brands.

Some say those brands are diminishing anyway. So sponsored content is just another way to milk the old cows as they die. Lately I’ve been shocked to hear some executives at news organizations, as well as some journalism students and even teachers, shrug at the risk. If I’m the guy who argues that news must find new paths to profitability, then what’s my problem?

Well, I fear that in the end we all become the Times of India, where paid advertising and news content are allegedly mixed so smoothly in some areas that readers can’t tell one from the other. Worse, at some news organizations, editorial staff do the work of writing this sponsored content. They become copywriters.

Mad Men Don Draper Peggy Olsen

At the same time, many of these news organizations are using their brands as candy to attract legions of new contributors, which can drastically lower the cost of content. Mind you, I’ve applauded that spirit of openness and collaboration as well as that newfound efficiency.

But here’s the issue: Some media properties have taught me to pause before following a link to them. Sometimes, I’ll find good information from a staffer or one of many contributors who brings real reporting or expertise. Sometimes, I’ll find a weak contributor — or staff — piece that adds no reporting or insight; it merely regurgitates what others have written when a link would be better. (Beware headlines that start with “how” or “why” or include the words “future of” or “death of” or end with a question mark; chances are, they add nothing.) And then sometimes I’ll find one of those sponsor-brand-native pieces only vaguely labeled to let me know its source.

My problems with these trends in news media:

Inconsistency. I no longer know what to expect from news organizations that do this. Yes, I’ve heard editors claim that they work with both contributors and sponsors to improve the quality of their submissions — but apparently, not enough.

Brands used to be selective both because the scarcity of paper or time forced them to be and because that became key to their value. Now they want more and more content. Making content to chase unique users and their page views rewards volume over value.

Conflict of interest. First, let me say that I think we in news became haughty and fetishistic about our church/state walls. The reason I teach entrepreneurial journalism is so that students learn about the business of journalism so they can become more responsible stewards of it. I argue that editors, too, must understand the business value and thus sustainability of what they produce.

That said, I worry about journalists who spend one day writing to serve the public and the next writing to serve sponsors. News organizations should never do that with staff, but I’m sorry to say that today, a few do. Freelance journalists are also turning to making sponsored content to pay the bills.

Thus, I hear of some journalism educators who wonder whether they should be teaching their students to write for brands. Please, no. My journalism school doesn’t do that. Others schools already include courses in PR and advertising, so I suppose the leap isn’t so far. In any case, brands will hire our students because of the media skills we teach them and we need to prepare them for the ethical challenge that brings.

Brand value. Some news companies are exchanging their brand equity for free or cheap content of questionable quality and advertising dollars of questionable intent. As someone who champions disruption in the news industry, you’d think I wouldn’t care about dying legacy media brands. But I do. I see how legacy news companies can bring value to the growing news ecosystem around them through sharing content and audience and someday soon, I hope, revenue. If the legacy institutions lose their value — their trust, their audience, their advertisers — then they have less to give, and if they die, there’s more to replace.

Now here’s the funny part: Brands are chasing the wrong goal. Marketers shouldn’t want to make content. Don’t they know that content is a lousy business? As adman Rishad Tobaccowala said to me in an email, content is not scalable for advertisers, either. He says the future of marketing isn’t advertising but utilities and services. I say the same for news: It is a service.

I’ve been arguing to news organizations that they should stop thinking of themselves as content businesses and start understanding that they are in a relationship business.

News organizations should not treat people as a mass now that they — like Google, Amazon, and Facebook — can learn to serve them as individuals. Can’t the same be said of the brands that are now rushing to make content? They’re listening to too many tweeted media aphorisms: that content is king, that brands are media. Bull.

A brand is a relationship. It signifies trust and value. Advertising and public relations disintermediated the relationship that commercial enterprises used to have with customers over the cracker barrel. Mass media helped them bring scale to marketing. But now the net enables brands to return to having direct relationships with customers. That’s what we see happening on Twitter. Smart companies are using it not to make content but to talk one-on-one with customers.

Here’s where I fear this lands: As news brands continue to believe in their content imperative, they dilute their equity by using cheap-content tricks to build volume and by handing their brand value to advertisers to replace lost ad revenue. Marketers help publishers milk those brands. And the public? We’re smarter than they think we are. We’ll understand when news organizations become paid shills. We understand that marketers would still rather force-feed us their messages than simply serve us.

What to do? The reflex in my industries — journalism and education — is to convene august groups to compose rules. But rules are made to be pushed, stretched, and broken. That is why that wise Time Inc. editor over me at Entertainment Weekly (as opposed to the oily ones who tried to force me to force my critics to write nicer reviews) summed up those rules as a statement of ethics. Again: “The reader must never be confused about the source of content.”

Well, if we’re not in the content business, then what is the ethic by which we should operate now? I think it’s even simpler: “We serve the public.”

If we’re doing what we do to fool the public, to sell them crappy content or a shill’s swill, to prioritize paying customers’ interests over readers’, then we will cannibalize whatever credibility, trust, and value our brands have until they dry up.

So am I merely drawing a black rule around advertising again? Don’t we hear contributors to a hundred news sites rewrite the same story every day — that advertising is dead? Well, yes, advertising as one-way messaging is as outmoded as one-way media. Oh, we in media will milk advertising as long as advertisers are willing to pay for it. But we know where this is headed.

Then do media companies have any commercial connection with brands? Can we still get money from them to support news? I think it’s possible for media companies to help brands understand how to use the net to build honest, open relationships with people as individuals. But we can teach them that only if we first learn how to do it ourselves.

Some will accuse me of chronic Google fanboyism for suggesting this, but we can learn that lesson from Google. It makes 98% of its fortune from advertising but it does so by serving us, each of us, first. It addresses its obvious conflict with the admonition, “Don’t be evil.” (When Google has failed to live up to that ethic — and it has — its fall came not from taking advertisers’ dollars but instead from seeking growth with the help of malevolent telcos or tyrannical governments.) Note well that Google sees the danger of sponsored content, which is why it has banned such content from Google News.

Whether you like Google or you don’t, know well that it provides service over content, enabling it to build relationships with each of us as individuals while also serving advertisers without creating confusion. Google is taking over huge swaths of the ad market by providing service to users and sharing risk with advertisers, not by selling its soul in exchange for this quarter’s revenue, as some news organizations are doing.

My advice to news organizations: Move out of the content — and sponsored content — business and get into the service business, where content is just one of your tools to serve the public.

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(Crossposted from Medium.)

May 21 2013

15:00

Tuesday Q&A: CEO Baba Shetty talks Newsweek’s relaunch, user-first design, magazineness, and the business model

A brand guru. That’s what they called Baba Shetty when he was hired away from advertising agency Hill Holliday by The Daily Beast to be the new CEO of The Newsweek Daily Beast Company.

1348078198601.cachedLess than a month later, the company announced that Newsweek was putting an end to its print edition and going all-digital. Last week, Shetty released the beta version of the relaunched website, a simple, colorful, responsive, and easily navigable new home for the decades-old news brand.

Shetty began working with the magazine on a “Mad Men”-themed issue on retro advertising back in March 2012. So maybe it’s not surprising that the new site’s first feature article is an exploration of what makes contemporary television so addictive. Shetty has big plans for capitalizing on on the historically respected Newsweek name, blending a New York Times-like metered paywall approach with an ambitious sponsorship model that will see a lot of creative ad work coming off the Newsweek desk.

On Monday, Shetty and I spoke about how he sees that plan unfolding, as well as some of his favorite new design features, bringing classic Newsweek covers into the digital space, and why ad agencies should act more like newsrooms. Here’s our conversation:

O’Donovan: So let’s start with the redesign! Congrats, first of all — very exciting.
Shetty: Oh, thank you.
O’Donovan: I’m curious, first, who you were looking to for inspiration with the redesign and what your major goals were.
Shetty: The audience is a combination of the people who’ve always looked to Newsweek for its sense of authority, its sense of editorial authority and its stature — its ability to offer perspective on the happenings in the world. But we also wanted to really innovate around the narrative formats for longform publishing on the web.

The real story of the Newsweek relaunch is that it allowed us to think about innovation in a way that really hasn’t happened much for professional journalism. Actually, there’s been a ton of innovation in microblogging and other formats — look at the Tumblr news from the last couple days. Enormous value from thinking about beautiful user experience for content consumption.

But really, a lot of the professional editorial products kind of slavishly follow a set of conventions that are all about maximizing pageviews. You look at a long article that might require seven clicks and page reloads to get through — and then there’s a lot of display advertising that is competing for attention with the actual content. We thought there was an opportunity to do for professional journalism what Tumblr and Pinterest and Flipboard, so many of the other innovative new startups, have done for other kinds of content.

So what we see with Newsweek is the user first. I’ve been talking about it as user-first publishing. The idea is, let’s deconstruct the sense of magazineness — not as a physical thing, but as a concept. The sense of magazineness is about a beautiful user experience. You think about your favorite magazine and sitting in your favorite chair at home and reading it — there’s a sense of editorial coherence. You know — the cover communicates a sense of editorial priority, there’s a table of contents that lends a sense of coherence to the issue. It’s a beautiful package that results.

But when magazines go digital, so much of that’s lost because of the conventions I talked about before — you slice and dice content into the slivers that we call pageviews, and it’s not a very satisfying experience to read professional journalism on the web.

So we really wanted to take a leap forward with Newsweek. In addition to the idea of the editorial stature and credibility of Newsweek, also creating a radically creative user experience around that content. I can talk about a few of the features if you think that would be useful.

O’Donovan: Yes, but I’m still curious about other projects, other sites, other redesigns, that you might have taken something from, or tried to emulate at all. Or maybe this is a ground zero thing. But for example, The New Republic’s redesign, or maybe Quartz — is there a trend?
Shetty: There really weren’t — we didn’t really emulate anything. What we were trying to do was stay true to Newsweek and what the ideal user experience would be.

The cover — there actually is a cover, and it was static in the first issue, and in future issues it will be interactive, video-based multimedia. It’s this idea of drawing a reader in to something that has great editorial to prominence and priority, and we’re going to explore what the cover could be in the digital age. There is a persistent table of contents which is available to you at any part of the experience, and that lends a sense of completeness and coherence to this experience.

O’Donovan: Yeah, the table of contents gives an element of navigability — it helps you understand the fullness of the product.
Shetty: Exactly. It’s persistent. No matter where you are, in an article or on a page, when you mouse over the window, the table of contents dissolves into view, and you can access it. So there’s a sense of, again, an ideal concept of magazineness, and part of it is this sense of complete control over the content consumption experience. So we thought, we’d love to make that real in a natively digital format.

Of course, we took account of all the devices that people read on now, so the site is fully responsive and looks beautiful on a handset or tablet screen or — you should really try it on a 23-inch monitor. It’s gorgeous in large format screens. It gracefully apportions itself to whatever the screen happens to be.

O’Donovan: What would you say, right now, the focus is on in mobile, in building apps? I feel like there’s this turn back towards building cross-platform websites and away from apps. Where did apps fall into your priorities when you started compared to where you are now?
Shetty: Yes, you’re exactly right. I think 18 months ago, everybody was talking about native apps as absolutely the way to go. But there’s a lot of friction in the app experience, and what I mean by that is apps have to be downloaded, apps have to be used and accessed on a regular basis, apps sometimes make it a little more difficult to share content. People are sometimes not as adept at sharing content via apps as they are across the open web. So for us, it’s about giving consumers a choice. We’re going to parallel-path for a while — we’ll also have a Newsweek app available. But the open web launch we did last week we think is actually a beautiful experience across devices. It’s friction-free — there’s nothing to download, there’s nothing that prevents easy sharing. So it’s designed to kind of be — I don’t want to say post-app, but it’s post- the initial way of publishing thinking, that native apps are the only way to go. I think a well designed, thoughtfully engineered open web experience can be terrific for the user.
O’Donovan: You mentioned building an interactive cover page earlier — I’d be interested in knowing what other kinds of engagement you’re interested in building across the site. How did you think about structuring comments? How do you want people to respond to the site?
Shetty: We thought a lot about socially driven content, and if you actually look at an article called “The Way They Hook Us — For 13 Hours Straight,” which is about longform, binge-viewing, addictive TV shows — you know, “Breaking Bad,” “Game of Thrones,” et cetera — if you look at that story, you can see how we handle social. Instead of having commentary being a thing that is relegated to the bottom of the page, there’s a set of functionality on the left side margin that moves along with the story. Right now, there’s 2,100 opinions listed — it’s a way to kind of over time have the idea that engagement opportunities are persistently available, no matter where you are reading these stories — it’s not just a thing that’s relegated ot the boot of a page. There’s a tray that actually slides out to reveal the social features. And there’s a lot of innovation we have planned in that area as well.

And while we’re talking about a long article page, you can kind of see the ability to use multimedia photography, video, infographics to help the journalistic storytelling of a longform piece. That’s another, I think, terrific step forward. It’s not the tyranny of the pageview, it’s not the conventions that are going to deliver more advertising properties — it’s thinking about he user first. What’s going to make for a great reading experience? in that way, I think it differs from a lot of the conventions that are in play across the web.

O’Donovan: So this is my understanding having read a couple things, so correct me if I’m wrong — but your strategy is first to build this product that people are going to want, and then slowly to introduce a paywall, and then later this sponsored content component. Can you explain how you see that unfolding and over what kind of timeline?
Shetty: I can talk a little bit about it — I probably can’t talk about all of our plans right now.

The metered access is going to be rolled out fairly soon, and that’s just the simple idea that, look, anybody can read any article on Newsweek, and initially that’s completely open and completely free. But only subscribers will be able to consume content over a certain number of articles. So it’s very similar to what The New York Times and others have done. Open access — we want a lot of social sharing, we want a lot of visibility of the content across the open web. But what we’re asking is, if people consume over a certain amount of content, that they subscribe. And that’s going to take place fairly soon.

The second question is how brands can participate. We have the same principles we’ve been talking about — thinking about the user first — applied to brand participation. What we’re going to do is limit the clutter — relatively few units, but really high impact — but stay with the design aesthetic of the site overall. They’re going to be beautiful, unignorable, but the value exchange with the reader is going to be very appropriate.

When you listen to a program on NPR, and there’s a sponsorship message before the program starts, you can kind of say, okay, well, I get that. I get how that works. It’s a reasonable exchange between the audience and the brand that sponsors the content. That’s really the model. It’s not as much about the standards of display advertising that have dominated the discussion on the web. It’s a sponsorship model — a different direction.

O’Donovan: From a structural standpoint, in terms of building the sponsorship and how closely married they may be to the content you have, I’m curious if it’s going to be an internal team and how closely they’ll work with the editorial team, or if it’s someone from outside. How does that all work?
Shetty: Oh, it’s all part of one organization in our company, and it’s a close partnership between the editorial and business sides.
O’Donovan: I was just reading earlier, you wrote, along with someone else, a piece for the Harvard Business Review about how advertising companies should act more like newsrooms. I was hoping you could explain that theory and maybe, I’d be curious to know if that was an idea that started to percolate for you having been in a newsroom for a little while.
Shetty: It actually started percolating for me well before I came into a newsroom. I think it actually a pretty clear direction that has been well represented by a lot of people. There’s a real opportunity for smart brands to publish content that’s useful, interesting, engaging, and helpful to their audience. It’s not a new idea — in fact I always talk about the fact that it’s an idea that’s been around for a very long time.

But what’s changed is all the tools that are available for content creation, distribution, measurement and all the channels that are available to brands. I think it’s a very powerful idea. I don’t think it’s one of these trend-of-the-season ideas. I think it’s a dramatic industry shift that we’re going to be tracking for years to come, through various iterations.

That was something I did with Jerry Wind, head of the Future of Advertising Program at Wharton. It was really based on the Wharton 2020 Project, which was asking a lot of advertisers about what they think about the future of advertising, and it was such a consistent theme — that it’s going to be less and less about what we think of advertising today, and more content that is voluntarily consumed by people because they view it as in some way useful or interesting.

O’Donovan: As we continue to see this trend toward sponsored content and cooperation between advertisers and news brands, I’m curious what your advice might be to other people who are following a path similar to yours — coming from the ad side and moving into newsroom, operating as the person who is trying to bring those two things together. Are there any specific challenges or surprises there? How would you tell someone to pursue that?
Shetty: I would just say think about the user first, and by the way, think about editorial standards. It doesn’t serve anyone to have editorial standards compromised. Users don’t want that, the consumer doesn’t want that, and certainly it doesn’t benefit the editorial side of things either. Nobody wants that. I think full transparency and good judgment are critical here.
O’Donovan: How do you telegraph that to the reader?
Shetty: Well, we don’t really — we haven’t really had any issues with telegraphing that. It’s just kind of clearly indicating where, what the source of a particular piece of content is. I think as long as you maintain these kind of standards, there really aren’t issues.
O’Donovan: And in terms of the user-centric experience you’re trying to build — you’re talking about how modern newsrooms have so many different kinds of metrics available to them now — when I hear people talk about building new products like this, they talk about building something light and flexible, and prototyping it so you can really respond to the audience’s initial reaction to it. I’d be curious to know how you’re tracking that, how you’re listening to the reader, and what kind of flexibility you’ve been able to build into the product.
Shetty: Absolutely. The iterative nature of web design development — or I should say, digital design development — is a terrific kind of approach for designing something that users really love and respond to. For us, it’s tools like Chartbeat, which we love, and other kind of leading-edge ways of getting real moment-to-moment feedback from not only what people are reading, but how they’re spending time with it, where they’re coming from, what kind of engagement they have with it. It’s all fed right back to the design and development process.

It’s a long way from the days of just building it and they will come. It’s really paying such close attention to what people actually respond to.

April 02 2013

10:49

Native Advertising Shows Great Potential, But Blurs Editorial Lines

Radio legend Paul Harvey was such a great storyteller that he could totally enthrall you before you realized you were listening to an ad.

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Today, you'd call that sponsored content. The larger term is native advertising -- strategies that mesh branded messages into the media where they appear. They include articles on news sites; funny videos and animated GIFs on humor sites; tweets and Facebook updates, and more. Instead of interrupting the flow like a typical TV commercial, pre-roll, pop-up or print ad, it blends into its surroundings and, in theory at least, offers the reader/viewer/listener something interesting.

Pew Research Center's 2013 State of the News Media Report found that while the amount spent on native advertising in 2012 was comparatively low -- $1.5 billion compared with $8.6 billion for banner ads -- it's rising fast. Spending for sponsored content grew 45 percent in 2011 and almost 39 percent in 2012. That's second only to video ads.

A Word from Our Sponsor

Some fear sponsored content blurs the ethical church-and-state division between advertising and journalism, while others say the revenue keeps reporters employed.

Reuters' Jack Schafer put it strongly in a recent piece, "A Word Against Our Sponsor": "If, as George Orwell once put it, 'The public are swine; advertising is the rattling of a stick inside a swill-bucket,' then sponsored content is the meal so wretched that even pigs will reject unless sugar-frosted," he wrote.

But whether you love or hate native advertising, examining the recent history of the news business, including declining revenues and widespread layoffs, sheds light on why it's growing so quickly.

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Mark Jurkowitz, associate director of the Pew Research Center's Project for Excellence in Journalism, told me that tough economic realities and the "anemic" growth of digital ad revenue opened the door.

"The grimmer news is that basically for every $16 that a newspaper is losing in print revenue, they're gaining $1 in digital," he said. "Just as the case with classified ads, which disappeared ... it's very possible that other forms of digital ad revenue are maybe more difficult than previously thought."

Forbes Leading the Way

Forbes was the first major news site to integrate sponsored content. In 2010, I wrote about how Forbes Media chief product officer Lewis Dvorkin shook up the established formula with AdVoice -- which hosted sponsored articles on Forbes.com.

Forbes Media chief revenue officer Meredith Levien told me it was slow going at first, especially since few companies had the staff or mindset for content creation. But in the last 18 months it's grown dramatically, in part because the publication added a team of writers, editors and graphic designers -- separate from the editorial team -- to help brands produce their articles. "We can't staff it fast enough," she said, adding that BrandVoice was "No. 1 on the list" of factors that made 2012 revenues the best in five years.

Last year, Levien successfully lobbied for the name to be changed to BrandVoice.

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"AdVoice conveyed the notion it was part of the advertising mix," she said. "This is really about content and thought leadership."

Levien adds that she was gratified to see the Washington Post adopt a similar model earlier this year. "I don't think we can take credit for it, but we were especially pleased to see the Post get into it," she said.

A recent random look at BrandVoice content showed a piece from Oracle titled "King Richard III: Villain, Hero, or Tragic Victim of Identity Theft?" NetApp offered "3 Steps To Build Your Personal Brand For Tomorrow's Business (Tips From The CIO)." The CapitalOneSpark credit card team offered: "Optimize Your Website To Convert Visitors To Buyers." The "Voice" pages include links to more from the sponsor, which in some cases includes press releases.

In February, Dvorkin blogged that BrandVoice now has 20 partners. While he remains passionately upbeat, others are more cautious.

Digiday recently quoted Businessweek.com editor Janet Paskin saying she's treading lightly: "Our credibly and integrity, for all journalists, is sometimes harder to defend than it should be. We don't want to compromise that or allow for that perception."

Edgier Sites Jump In

While the traditional journalism community remains divided, many edgier news and entertainment sites see no problem at all. Some of BuzzFeed's snappy content is sponsored, as is some of what you'll see on Cheezburger, Gawker, Vice and others.

Onion Labs, the in-house advertising and marketing team of The Onion humor site, works with sponsored content in several ways. It integrates brands into its own video content -- such as 7-Up's placement in its morning show, "Today Now." It creates original content for major brands. It also posts or links to content produced by the brands themselves, like this video for Adobe:

CollegeHumor CEO Paul Greenberg said his site embraced the concept five years ago. At the Native Advertising Summit in February, he said there's such interest that the site's inner workings now resemble a digital ad agency.

"We've really had to turn into a machine to super-serve the clients that come to us and meet the demand that we're seeing in the marketplace," he told me. Listerine, he says, saw a 17 percent jump in sales after its native ad campaign.

Matt McDonagh, vice president for national sales at The Onion, says a Nielsen study shows that humor is the best way to reach a young target audience. Even big names such as Hilton and Coke Zero are dipping their toes into the comedy pool. "Brands are willing to take a few more risks than they were a few years ago because to hit 18- to 24-year-olds -- you're not going to do that on '60 Minutes,'" he said.

It seems that when it comes to entertainment sites, sponsored content has found a comfortable home.

"Those kinds of sites have pretty seamlessly integrated this," Pew's Jurkowitz said. "It's a more controversial choice for traditional legacy news organizations."

What Not to do

In 2010, Gary McCormick, then-chair of the Public Relations Society of America, publicly warned that poorly labeled sponsored content could be confused with objective news, especially because disclaimers can be lost as information is shared. Three years later, he feels media and brands understand the need for authenticity and transparency.

"It may be that it's no longer always the 'buyer beware' -- it's now the 'manufacturer beware' of putting out false claims," McCormick said. "If you come out with something hidden behind the wall it only takes one consumer to spot it ... They're going to dig deep."

When The Atlantic ran a boosterish Church of Scientology native ad, then deleted critical comments, the outcry prompted an apology with the opening line, "We screwed up."

At the Native Advertising Summit, The Atlantic Digital's vice president and general manager, Kimberly Lau, called the Scientology incident a lesson in what not to do. "The whole experience clarified how it is people are going to judge these things," she said.

The Onion did a scathingly hilarious take featuring fake content praising the Taliban.

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The Onion's McDonagh notes the parody came from the editorial, rather than sales side, but he feels their pain. "To The Atlantic's credit, they're testing some things out and trying to make themselves a smart digital publisher," he said. The key, he adds, is to understand and stay true to your audience.

Sharing the Wealth

The native ad boom is also already creating new business models -- maybe even a whole new advertising sector.

Take, for instance, the success of Sharethrough, which helps increase the reach of sponsored content. For example, if a brand creates a post for one site, Sharethrough carries it to other platforms such as WordPress, Forbes.com, The Awl and Thought Catalog, which direct traffic back to the original post. Videos can be embedded and viewed in a number of blogs and sites.

Although it's only four years old, it's worked with 20 of the top 25 brands of AdAge magazine's Megabrands list. Relationships with many websites and publishers helped it create the Native Advertising Summit. (As a matter of fact, it popularized the term "native advertising," building off the phrase "native monetization" used by venture capitalist Fred Wilson.) Sharethrough has also become a clearinghouse for information about the new industry with tools such as the Native Advertising Leaderboard, which is searchable by brand, publisher, topic and social actions.

"There's a lot of creativity happening in this space right now," said Chris Schreiber, the firm's vice president of Marketing & Communications. One recent project promoted an infographic Pop Secret developed about how people watch movies. "They were delivering value -- something you didn't know and was easily sharable," he says.

When sponsored content -- especially videos -- work, he says, it's great. "It's more about thinking what's valuable for the audience and the consumer rather than what's valuable for the marketer."

Microsoft met its marketing goals while engaging a new audience with its The Browser You Love(d) to Hate campaign for Internet Explorer 9. Roger Capriotti, director of Internet Explorer product marketing, hired producers to create visual content that targeted young people who might otherwise disregard the product. The effort relied on viral shares and news coverage instead of paid posts; the most frequently shared video recalled memories of growing up in the '90s:

As anyone who's tried to make a video go viral knows, 25 million video views -- including 22 million for "Child of the 90s" alone, is nothing to sneeze at, even for Microsoft.

"If we can build good content, we can engage them in a way that we haven't engaged them in the past," Capriotti says. The best part, he says, was reading positive reviews posted by new-found fans.

The Rest of the Story?

Jurkowitz, of the Pew Research Center, questions how far the native ad trend will reach.

"Obviously the growth rate is high, but we're talking about a universe of small numbers here," he says. "There's some momentum in this direction, understandably, but it's not by any means a foregone conclusion that this is going to become a dominant form of advertising in mainstream news outlets going forward."

But The Onion's McDonagh clearly sees brands moving away from conventional ad campaigns, and demanding more creativity. "Brands are trying to develop content and trying to act more like publishers, and that's a sea change from where we were three to five years ago."

Sharethrough's Schreiber notes that as soon as new platforms crop up, advertisers jump on them -- as they've done with Twitter's Vine app, which creates short videos. He expects newer platforms will arise specifically for native advertising. "You're going to see new media created with native advertising, knowing that's how they're going to make their money," he says. And brands, he says, will learn what works best for their audience and their message. "They'll find their voice," he concludes.

Usually at this point in a Paul Harvey show, he would knowingly say, "And THAT's ... the rest of the story." But right now, prospects for native advertising are not so clear-cut that any one person or group can claim to have the last word. The only thing that's certain is that they will continue to evolve.

Terri Thornton, a former reporter and TV news producer, owns Thornton Communications, an award-winning PR and social media firm. She is also a freelance editor for Strategic Finance and Management Accounting Quarterly. Follow her on Twitter @TTho

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April 01 2013

11:00

Digital Magazines Dive Into Native Advertising

Ah, that awkward moment when you're interviewing someone about online advertising and you have to pause to quit your ad-blocking browser plugin so you can view a sample ad.

Clearly, I'm part of the problem, not the solution, for magazines trying to develop online monetization opportunities for their digital products. Yet most online advertising options, like banner ads, provide little profit to magazine publishers.

But a new (old) approach is rising to the rescue in the form of revitalized, interactive, and highly tailored sponsored content within digital magazine products. That is to say, yes, magazines are also taking advantage of the "native advertising" boom.

While some of the sponsored content looks a lot like digitized versions of the "special advertising sections" that print magazines have long used, today's innovators are coming up with more creative ways to integrate sponsored content to increase its effectiveness and to maximize profit.

Sponsored content on the web and in replicas: GTxcel

One of the challenges of using sponsored content for today's digital magazines is that standard PDF-like replica editions typically only include static ad pages, like those in print issues. GTxcel (the just-rebranded company formerly known as Godengo+Texterity) is releasing a new product, Turnstyle, that will allow publishers to add interactive sponsored content to an HTML5-based magazine app.

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Available first for iOS apps and later for other platforms, Turnstyle allows a publisher to insert interstitial full-page ads that can show video and lead to additional pages of sponsored content within the app, accessible through touch interaction with the ad. Readers can interact with all of this content without leaving the magazine app. Interactivity will be fully functional offline as well. Personalization and geolocation features are likely to be added in the future.

"In magazine apps, the industry is pretty much banners and ribbons at the bottom, maybe an introduction page. Then you get into the flip experience," says Kim Keller, executive vice president for sales at GTxcel. "The ability for you now to be able to insert an interstitial ad that is completely interactive is very powerful."

Keller sees this new product as especially valuable for magazines that want to create standalone special issues for regional or seasonal themes. "They can create it very easily with Turnstyle -- a 20- to 30-page app with sponsored content that is highly interactive and relevant to that special edition," he says.

The goal of the new product, along with the other sponsored content strategies GTxcel recommends for its magazine customers, is a positive user experience of marketers' messages -- "not sponsored content that gets in the way, that is obviously just an advertisement," says Keller. "When a publisher does sponsored content correctly, the reader doesn't care. They actually love it."

Sponsored content made customized and current: Nativo

Part of creating a good user experience for sponsored content is ensuring a seamless, relevant look and feel in the context of a magazine's usual content. Nativo (known as PostRelease prior to its rebranding this month) is creating ways to help publishers integrate native advertising (another term for sponsored content) into their web and digital magazine experiences with a smooth, integral feel.

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"When [publishers] are redesigning their sites, they are looking at native advertising as not just an option, but perhaps their lead option," says Justin Choi, CEO of Nativo. "They can get improved monetization because they're focusing on driving engagement, as opposed to interruption" caused by banner ads and other forms of display ads.

Nativo allows publishers to use native advertising that marketers have tagged and customized in such a way that it matches the editorial content's existing online appearance. So far, the company has attracted magazine clients including Maxim, Source Interlink (publisher of Motor Trend, among other magazines), and Entrepreneur Media. The service works across platforms, including mobile devices and the web.

"The publisher says, 'I want the native ad here.' They start tagging, and the system knows to replace those elements when they get a branded element," explains Choi. "Once it's integrated, they can control that native ad the same way they do other advertising. They can turn it on and off. They can geotarget it. All the same ad controls they can do with advertising, they can do it with native."

This kind of branded content is an especially good option for mobile publishing, says Choi, at a time when other kinds of mobile ads are bearing little profit for publishers. While mobile traffic is growing rapidly, advertising formats for mobile haven't adapted to maximize that audience.

"Monetization has to be solved by publishers. Smart editors realize that. Native placement works remarkably well on mobile, for the user experience but also for monetization," says Choi. "Publishers are thinking of this holistically."

Of course, making sponsored content or native ads a truly seamless part of a digital magazine experience is an issue of not just transparency, but also brand voice: Who produces the content? What kinds of brands fit with the publication's editorial perspective? Nativo's focus is on the technology to integrate these ads, one part of what Choi calls a "whole ecosystem now helping brands produce better content."

Sponsored content across media properties: Brightcove

For companies that publish more than one magazine or have other digital properties, the ability to reuse sponsored content across more than one website or app is alluring. The same content can be rebranded and republished in more than one place, maximizing its value to the publisher.

Brightcove is one company exploring ways to make this reuse easier for publishers. With a long list of magazine publishers as customers, Brightcove's platform allows the sharing of a single video -- like one created by a sponsor -- in different settings, with unique branding and distinctively formatted players for each publication.

"If I'm ... creating sponsored content because it has good upfront value and will invest my reader, I'm going to take that sponsored content across a number of platforms," says Chris Johnston, vice president of digital media solutions for Brightcove. "If I have that on my homepage, that's great, but if I have another property that has a whole gallery of videos, it adds value to them, too. If another property has a feature on a related topic, they may already have a video, but they may want to show another to show depth of knowledge."

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The possibility of applying sponsored content to multiple media properties may appeal to publishers that want to make the most of an initial foray into sponsored content.

"Most magazines aren't working on lots of sponsored content. They more typically lean towards the traditional CPM-based model because it's easier," says Johnston. Creating sponsored content in-house for an advertiser, or managing its creation by an outside firm, is difficult for publications already stretched to just create their print and digital products. "Lots of content creation and distribution takes effort," he says.

So while magazines may like the idea of integrating more sponsored content into their digital products, and the payoff may be greater than the investment in other advertising efforts, it's going to take time for these innovations and others to find a place at many publishers -- plus a willingness to face the other challenges of sponsored content, like ensuring readers' positive experience of the content and maintaining a consistent editorial identity.

Keller of GTxcel, however, is optimistic, comparing the integration of sponsored content today to the early adoption of Google AdWords by publishers.

"They had text in them, and people were concerned it might look like editorial. It's not uncommon for that view to be applied" with sponsored content today, Keller says. "What we've found is that over time, as more and more publications have adopted native advertising, that concern has subsided."

Susan Currie Sivek, Ph.D., is an assistant professor in the Department of Mass Communication at Linfield College. Her research focuses on magazines and media communities. She also blogs at sivekmedia.com, and is the magazine correspondent for MediaShift.

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March 28 2013

12:52
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