Sponsored content: are the lines being blurred?

As if consumers haven’t enough to confuse them, there is now the emerging phenomenon of sponsored content in the mainstream media to make life just that little bit more complicated.

At the 2013 World Association of Newspapers conference held recently in Bangkok, Siddharth Varadarajan, editor of the Hindu newspaper in India, described this rising media phenomenon as a "blight" that has infected newspapers in almost every country.

What exactly is sponsored content, and should you be concerned about it?

Referred to variously as “content marketing” or “native advertising”, sponsored content is paid-for newspaper content that may have the appearance of editorial. As newspapers seek to tap new revenue streams and organisations struggle to be heard through the noise, demand for it has grown significantly.

In the US, revenues from sponsored content grew by 56.1 per cent in 2011 and by 38.9 per cent in 2012, according to the Pew Research Centre. However, it has caused some concern among editors and journalists who worry about editorial independence and standards. Google has also expressed apprehension, threatening to stop indexing content for Google News that blurs the line.

Earlier this year the Atlantic magazine demonstrated the problem when its website ran an article on Scientology that had been sanitised by the marketing department and formatted to look like conventional editorial. The magazine was forced to apologise to readers soon after.

The consumer need not be taken by surprise, however. Sponsored content is nothing new. It has been around in various print guises, such as advertorial and paid-for supplements, for many years. Despite the Atlantic debacle, as long as content is clearly labelled as sponsored and is distinguishable from regular editorial, there should be little to worry about.

Furthermore, with the right alignment, it can bring additional benefits. For the client, it can offer a far more engaging experience than conventional advertising. For publishers, it can generate conversation with and by key players on important topics such as big data or healthcare. The Guardian does this to good effect through the "partner zones" of its professional networks section.

Revenue potential in Ireland
In Ireland, the revenue potential of sponsored content has prompted the development of similar initiatives. Eamon Fitzpatrick is advertising director at this newspaper, which has developed a product called Brand Times.

“[It] incorporates the print model of advertorials to a digital version,” says Fitzpatrick. “The business model is to produce niche, content-rich portals for our readers that is provided by our clients and in some cases commissioned by our own editorial team.” He doesn’t see a problem, as long as the content is clearly marked as sponsored. “On irishtimes.com we have devised a way to highlight sponsored content through a separate channel, outside our content-management system.”

He says the newspaper has had “no complaints or confusion to date”.

The broadcast industry has also loosened the reins. In March 2011, the Broadcasting Authority of Ireland revised its codes on product placement. With the exception of children’s programmes and chat shows containing more than 20 per cent of news and current affairs content on a regular basis, promotion of a sponsor’s products and services during programming is now permitted. Such sponsorship must be clearly marked with a logo containing the letters PP before and during programming.

Newspapers continue to suffer from the combined onslaught of declining ad revenues, falling circulation and technological change. In its annual report for 2012, the European Newspaper Publishers’ Association described it as “one of the most significant transformations in [the industry’s] history”.

The transformation will continue, but how it is navigated and what its final outcome will be remains to be seen.

In France, Google has created a Digital Publishing Innovation Fund.

In Germany, the Bundesrat looks set to approve a bill passed by the Bundestag that will allow publishers to start licensing content to search engines and news aggregators. Experimentation with concepts such as sponsored content is key in all of this.

Newspapers remain a primary mechanism for effecting some degree of accountability. Recent examples include the revelations of the Prism surveillance network by the Guardian and the Washington Post, the publication of the Anglo Irish Bank tapes by Independent News and Media and the breaking of the story last year, by The Irish Times, of the tragic death of Savita Halappanavar.

Impact of new media
New media, while facilitating a new level of transparency and having become an integral tool for journalists, also have their limitations. For all their strengths, they can also be inaccurate and hard to verify, as illustrated by the failed sleuthing efforts of users of the social news site Reddit during the Boston bombings.

There are signs the public is beginning to recognise this, as a recent study by the Reuters Institute for the Study of Journalism at Oxford showed. Few overarching trends are discernible, but the indications are that more people are willing to pay for news, that they trust established news brands to provide that news accurately and that they place a premium on specialist analysis and commentary

Sponsored content is no panacea. If anything, it is likely to form only part of the answer to newspapers’ woes, alongside paywalls and other initiatives. As long as it is clearly labelled as such, the risk of readers being confused about what is independent editorial and what is paid-for content is minimal. As an exercise in moral hazard, it pales in comparison to the manner in which it is blurred on a daily basis in media empires around the world.

The consumer need not be disadvantaged, provided they read the label and provided the media managers are rigorous in identifying content that is “sponsored” from content that is generated through normal journalistic inquiry and coverage.