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The Ethics War Over Sponsored Content: Marketers Know Better Than Journalists How This Battle Will End

by Scott Baradell  |  
March 14, 2013

How popular is sponsored content today? A three-week campaign with BuzzFeed, including a handful of sponsored posts written by its advertorial staff, will cost you a minimum of $50,000.  Most BuzzFeed advertisers pay much more than that.

BuzzFeed is the headliner of a media zeitgeist that is all the rage these days for both media companies and marketers; more than $1.5 billion in content sponsorships is expected to be sold this year.  This month, the Washington Post jumped on board with its BrandConnect offering, joining Forbes, The Huffington Post, and The Atlantic. Thousands of media outlets also collect revenues from organizations like Outbrain, a "PPC for content" vendor that sells links from media sites to corporate blogs.

But while sponsored content appears to be a much-needed boon for publishers and advertisers weary of the limitations of banner ads, sponsored content also is sending many traditional journalists into an ethical tizzy.

What's All the Fuss About?

The issue is transparency.  Unlike advertorials of the past, much of this "paid" content is not clearly distinguishable from news content. As Jack Shafer of Reuters puts it:
BuzzFeed has created pages for Virgin Mobile, Pillsbury, Coca-Cola, Dell, the Nevada Commission on Tourism and General Electric that could pass for its standard pages as they use jokes to “subtly weave in the values of the brand” ... 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.

News organizations have editorialized against the evils of sponsored content. Political blogger Andrew Sullivan and BuzzFeed's Ben Smith have engaged in sharp ethical debate.  And The Atlantic gave itself and sponsored content a black eye with its ham-handed Scientology advertorial.

So, who will win this ethical debate---and what does it mean for marketers?

A (Very) Brief History of Sponsored Content

Let's start with a little history.

All this drama might give you the idea that sponsored content is something new.  That's not the case at all.

Back when public relations agencies spent their days busily acquiring newspaper clippings for their clients, North American Precis Syndicate (NAPS) stepped into the fray to supplement traditional media placements (secured through phone pitches) with non-branded syndicated columns to make those piles of clippings a little taller.

In the early 90s, I ghostwrote a personal finance book and syndicated a NAPS newspaper column for an investment company's CEO. Yep, we did "thought leadership" back then, too. That book sold 10,000+ copies. (Full disclosure: We used some of the same tactics used by Dave Kerpen and decried by B.J. Mendelson; those aren't new either).

The column was a success for the CEO and his company, which he ultimately sold to one of the world's largest banks. The column increased his name recognition in small towns across America, where the company was recruiting financial advisors to sell mutual funds. NAPS was an effective way to reach the company's target audience, because its syndicated content mostly found a home in small-town weeklies with tiny staffs that were starved for content.

Twenty years later, it's not just third-tier publications that face staff shortages and news holes they struggle to fill.  It's every major news organization in America.

Oh, and add in the fact that sponsored content pays the bills (and appears to be a more compelling form of advertising than banners) and you can see why everybody's buzzing about BuzzFeed.

Who Will Win the Sponsored Content Debate? Follow the Money... and the Audience

Journalists should have seen this development coming for a while now.

As the media has has gone through deregulation and fragmentation over the past 30 years, the traditional idea (once endorsed by the federal government) that news organizations should consider "serving the public interest" alongside the profit motive has faded.  The two objectives are now deemed one and the same.

In other words, the audience---not the FCC or some journalistic committee---decides what's in its best interests.

This new model for journalistic ethics doesn't only apply to sponsored content.  When Fox News emerged in 2002 as the No. 1 cable news channel, stunning the iconic CNN, the upstart competitor was attacked relentlessly by traditional journalists offended by the right-leaning network's "Fair and Balanced" pretense.  Despite the criticism, Fox has continued to grow its audience for the past decade---and even won MSNBC over to its business model, as they slotted themselves into the role of  Fox's left-leaning alternative.  CNN, while claiming the journalistic high ground, has fallen to a distant third in the ratings.

If BuzzFeed continues to thrive, it will be because it has found a way to incorporate sponsored content that does not alienate its audiences, and, in fact, actually helps them to grow.  And other media outlets will continue to copy BuzzFeed's success.

Ironically, a more influential arbiter than journalists on the "ethics" of sponsored content is Google. If Google determines that links to sponsor sites within sponsored content are "paid" links, both the publisher and the sponsor of the content can be severely penalized by the search giant.  And that hits websites and advertisers where it counts: in the pocketbook.

So, worry about Google, marketers.  But don't worry so much what Andrew Sullivan, Jack Shafer, or the Columbia Journalism Review think.  Audiences rule.

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Scott Baradell is founder and president of Idea Grove, a Dallas public relations and inbound marketing agency that serves clients nationwide, with a focus on B2B marketing for technology, healthcare, and online businesses.

Prior to Idea Grove, Scott served as the senior corporate communications executive for two Fortune 1000 companies, co-founded his own venture-backed mobile startup, and worked as a journalist at major metropolitan dailies and alternative weeklies. He created the influential PR blog Media Orchard in 2005 and a companion inbound marketing blog, Media Orchard Too, in 2013.

Scott and Idea Grove have earned awards from the International Association of Business Communicators, PR News, Texas Public Relations Association, Aurora Awards, Associated Press Managing Editors of Texas and others.

Scott has an MBA from Southern Methodist University and a Bachelor of Arts from the University of Virginia. He maintains an APR designation from the Public Relations Society of America.

Scott speaks to audiences and counsels organizations nationwide on the interrelated disciplines of public relations, content marketing and inbound marketing. Contact Scott for speaking requests or to discuss how Idea Grove can assist in your marketing efforts.

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  • by Tom Mangan Thu Mar 14, 2013 via blog

    It sounds a little bit like they found out what works on websites just in time for the audience to go mobile.

    But given the extreme difficulty in getting any kind of banner ad onto a handheld, it could be that everybody's going to have to go the content route anyway.

  • by Scott Baradell Fri Mar 15, 2013 via blog

    LOL, it has taken a while, hasn't it? But I do think sponsored content is ideal for mobile as well.

  • by Joe Cardillo Fri Apr 5, 2013 via blog

    Hey Scott!

    Thanks for bringing this up, I think it's a fascinating topic and something that marketers and comms professionals are going to have to deal with more and more (which I imagine many aren't happy about).

    I think one of the biggest problem comes from companies placing content in places that don't reflect their values. So far audiences have mostly said they are angry because of secrecy and hiding the originator of the content, but I think a deeper reason is they feel in, "Wal-Mart doesn't get to come a publication that has spoken up for labor rights, and preach from the pulpit, not with their record."

    All this is to say that companies wanting to use sponsored content have to think carefully about the fit. You may spend 50k on Buzzfeed content sponsorships and end up in the red when it comes to return because you are the Church of Scientology and you never stopped to consider whether or not that audience would be receptive to or shared your core values.

  • by Scott Baradell Fri Apr 5, 2013 via blog

    Hi Joe, thanks. That's a great point. I think in most cases, the only way sponsored content works is when it's not "me, me, me." A post by someone in Scientology on the importance of religious tolerance would be received well in many sectors and win affinity with others of the same opinion. A post paid for by Scientology boasting about how great Scientology is, published in the Atlantic, looks like journalistic prostitution of the worst sort, to both audiences and the rest of the media.

  • by Joe Cardillo Fri Apr 5, 2013 via blog

    Definitely, there's a disconnect for many large co's when it comes to "what should we talk about."

    What do you make of the examples on BF that you linked to? I'm not sure the internet really needs more "Top 10 ways to enjoy the Super Bowl [for the 10th year in a row]" but brands seem to be struggling to provide anything else.

    The GE one was most interesting. For a co. like that it would be fascinating to see how they innovate their processes, invent things, and how their internal culture works. That would be much more interesting to me than "10 Beautiful GIFs from the floor of a GE Factory." Still, they are doing sponsored content better than most.

  • by Mark Pettus Fri Apr 5, 2013 via blog

    A moral man knows its wrong to mislead reads. An ethical man won't mislead readers.

    Judging by your arguments, you don't recognize the immorality of passing off your paid content as actual journalism, much less the ethical problems posed by doing so.

    Just because something sells, or is recognized by Google as good quality content, doesn't make its publication ethical. The market may win, but morality and ethics will lose. Let's hope I'm not the only one in marketing who cares.

  • by Mark Pettus Fri Apr 5, 2013 via blog

    "mislead readers"

    Where's an editor when you need one.

  • by Scott Baradell Fri Apr 5, 2013 via blog

    Mark, what committee should decide what is ethical in journalism? Would you like to be in charge of it?

    Or should we let audiences decide for themselves?

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