In recent years news publishers have grappled with an uncomfortable realization: The traditional revenue streams of display advertising and reader subscriptions may not be sufficient to support them in a digital age.

Digital display ads command unimpressive rates and engagement, with clickthroughs measured in the tenths of percentage points.

To clarify and inform about the landscape, the American Press Institute convened a Thought Leader Summit with a few dozen of the people leading the way in this field.

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Digital subscriptions have recently helped some publishers, but readers remain reluctant to pay in large numbers, and the ultimate future of that model is unclear.

For many of these publishers, growing hopes for a new revenue stream lie in a category known as “sponsored content.” It goes by many other pseudonyms — “native advertising,” “content marketing” — but the basic value proposition in most cases is the same. Publishers work with sponsors to create content that is “native” to the particular platform (in some cases looking very similar to editorial content) and is more engaging than display advertising.

Pieces of the model date back to the earliest days of TV and radio, or the long history of advertorials in newspapers and magazines. But the emerging models in some ways are also new to digital as today’s publishers sprint ahead in different directions.

To clarify and inform about the landscape, the American Press Institute convened a Thought Leader Summit with a few dozen of the people leading the way in this field — representatives of many major publishers including the Atlantic, BuzzFeed, Huffington Post, Wall Street Journal, Forbes, Washington Post, Digital First Media, Deseret Digital Media, Vox Media and others, as well as people from major brands such as Dell and Xerox and some of the best industry analysts and marketing firms.

This white paper distills their best wisdom about sponsored content’s definitions and business models, standards and processes, metrics, and the nature of its promises and challenges.

Chapter 2

The potential for news organizations

The potential for native advertising is enormous. For some publishers it’s already more than just potential — BuzzFeed draws all of its revenue from the model; and more than 50 percent of the Atlantic’s digital revenue is tied to native campaigns.

From the conversations at our summit we identified a few underlying reasons.

1. It fits better with news

Consumers operate in two different modes at different times, says Rebecca Davis, an executive vice president and group head at Ogilvy. One mode involves interaction and conversation. The other, she calls “direct response buying mode.”

News audiences tend to be in the interaction/conversation mode, and so sponsored content makes more sense to reach them than transaction-focused display ads.

In other words, if most people come a news site to learn and be entertained, then brands can better reach them with sponsored content that also educates and entertains, rather than a display ad trying to sell a product.

2. It solves the modern problems of brands

Brand publishing 1.0 was about companies learning to create their own websites and publish content there. They got good at it, but also realized that no one finds it.

Brand publishing 2.0 is now about working with mainstream publishers to craft and distribute the brand messages where the people are.

Brands have a “content glut,” says Sam Huxley, senior vice president of digital for PR giant FleishmanHillard. Brands are also increasingly driven by single missions and see themselves as having a story to tell, not just a product to sell. This is where sponsored content can be uniquely effective.

3. It works for mobile and small screens

Native advertising is a “silver bullet” for mobile revenue, says Erik Requidan, assistant director of sales for advertising firm Intermarkets. Sponsored content is much more effective on small-screen environments where you can’t stick ads next to content, the ads have to be part of the content.

Politico and The Atlantic among others both see native advertising as one of the key strategies to closing the “mobile revenue gap” — the difference between their large and growing mobile readership and their relatively small mobile revenue.

4. Exclusive, premium value

Sponsored content is a model that still highly values a premium publisher’s unique environment.

Unlike display ads, where all traffic across the web is commoditized and prices have fallen to the floor, sponsored content on a premium site is worth more than on a lesser website. Where display ads seek impressions and clicks in any context, sponsored content seeks to tap the unique value of one brand’s relationship with its audience.

This is part of the reason sponsored content commands higher prices and is more difficult to disrupt through mass-market competition.

Sponsored content may even help to reverse the slide of display advertising.

Representatives at the summit from the Atlantic and Huffington Post said they often sell the brand sponsoring the content all the display ad positions on that web page as well. The display ads can reinforce the brand identity and may push a more direct-response message to complement the soft-sell approach of the sponsored content.

These display ads get much more engagement than average display ads that aren’t paired with sponsored content.

Chapter 3

The definition of ‘sponsored content’

Sponsored content / native advertising appears in many ways. There is no single form, but rather a continuum from banner ads to social media content to large microsites with articles and videos.

It is better to define sponsored content by what it does than by what it looks like.

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The fragmented, inconsistent approaches are actually a feature, not a bug — “native” advertising is native to the specific publication or platform it appears on, mimicking the qualities of the publication or platform.

For example, BuzzFeed’s native advertising content is designed to be socially shared — a quality of BuzzFeed’s original content; whereas native advertising on Facebook or Twitter looks like a post or tweet, respectively. So variation is expected.

It is better to define sponsored content by what it does than by what it looks like:

• It is generally understood to be content that takes the same form and qualities of a publisher’s original content.
• It usually serves useful or entertaining information as a way of favorably influencing the perception of the sponsor brand.

This falls closer to the category of brand advertising — not necessarily direct-response sales pitches. It’s higher up the marketing funnel — establishing relationships and awareness. Display ads by contrast are for reminders or point-of-purchase decisions.

For example, Ken Ericson, director of content marketing for Xerox, said his company uses sponsored content to alter its public perception from just a copier/printer company and to achieve its branding goals. The point is not to try to sell you a printer.

This flexible definition of purpose rather than form allows for the variation across publishers and platforms.

What sponsored content is not

Sponsored content or native advertising seems at first glance to be closely related to other forms of advertising and company-driven messaging. But there are important distinctions.

Sponsored content, for instance, is different from these sister-models:

Advertorial: Advertorials seek to present advertising as editorial content to convey claims and messages the reader wouldn’t otherwise find credible. By contrast, sponsored content (done well) is properly labeled and clearly associates the brand with the content — the goal is to have the reader know and appreciate the brand’s involvement, not to hide it.

Content marketing: This is content that brands produce and distribute on their own, without the skills, time or distribution platform of a publisher. Sponsored content, by contrast, while the brand may still be involved in shaping it, generally requires a publisher to distribute and often to help plan and or produce.

Press releases: Press releases announce something that is important to the brand, which may or may not be considered important by the public. Sponsored content (done well) puts the readers’ interests first and seeks to be useful, entertaining and authentic. Often, it is not explicitly about the brand at all, but about a subject that intersects with the brand and is not explicitly promotional.

Chapter 4

The four business models

There are four distinct models that we’ve seen so far, each with varying levels of involvement from the publisher and brand:

Each publisher should think strategically about which of these four models is appropriate. This is not one-size-fits-all.

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Underwriting model: The brand sponsors content attached to normal reporting, or something that the publisher was creating anyway. This model preserves the most editorial independence. The brand is simply paying to have its name associated with the content.

Examples: The Verge, the tech site of Vox Media, partnered with Ford on a feature on innovation in Kansas City as part of a series called “Detours,” which looks at cities off the beaten path that have been transformed by technology. To preserve its editorial independence, the Verge crafted the series and presented it to Ford because it aligned with the carmaker’s brand. The campaign offered Ford a 30-second pre-roll ad as well as an intro and prominent logo placement in the video series intro.

For the follow-up to the immersive and interactive “Snow Fall,” The New York Times profiled horse racing legend Russell Baze and had BMW as a sponsor. “The Jockey” included custom ad units for BMW as well as prominent logo placement in the feature navigation bar. Months before the story was completed, BMW signed on without knowing all the elements of the story — just the story’s subject. Horse racing ties into an overall performance theme that BMW is trying to capture, Tom Penich, media communications manager, BMW North America told Adweek.

Agency model: A publisher employs specialized writers and editors to help create custom content in partnership with a brand. The specialists balance the brand’s marketing goals with their own understanding of how to create engaging content, to make something that serves everyone’s needs.

Examples: BuzzFeed and the Atlantic use this model. Each has a separate team of specialized writers, editors and other creative positions that work with brand partners to create — and importantly, revise and improve — their content ideas before publishing. The concept is that the sponsored content has to have strong editorial value — which serves both the publisher, the audience and the advertiser.

Platform model: A publisher provides a dedicated space for brands to publish their own messages in their own name. The publisher has little direct involvement in the content. Here, the brand is paying for access to a publisher’s platform to access its audience.

Example: Forbes’ BrandVoice product works this way. Marketers get access to the same publishing system as Forbes other writers and editors, which includes tools for search- and social-optimization. Their content appears throughout the Forbes site. The key, according to Forbes, is absolute transparency about who produced what.

Aggregated/repurposed model: A publisher offers brand the right to use archived real journalism in a new package that serves a sponsor’s interest. This may be a complete e-book, or just content to fill out a company newsletter.

Example: The Dallas Morning News’ content marketing agency, SpeakEasy, offers the paper’s archives for reuse by brands that want to tell stories to their customers.

Stephanie Losee, managing editor at Dell, and others reiterated that brands prefer to be offered a “menu” of these options. “We want different models for different things,” she says.

Each publisher who wants to get into sponsored content should think strategically about which of these four models is appropriate for them based on staff resources, sponsor needs, ethical principles, revenue potential. This is not one-size-fits-all.

Chapter 5

Managing risks, maintaining standards and ethics

The resounding consensus we heard from summit participants was that upholding the publisher’s own brand and integrity, and thereby its readers trust, is an important principle.

The best protection for a publisher is to encode a set of standards and processes for handling sponsored content, so each piece is not left to varying degrees of inspection or care.

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These brands seeking sponsored content partners are coming to publishers not only for their audience size but for their trust and integrity, says Rebecca Davis of Ogilvy. The brands know deep down that publishers have to safeguard that trust in order for any of this to continue to make sense. Publishers can push back on brands when they feel they need to.

The risks of a misstep in this field are significant for any publisher.

Brand credibility is at stake, of course. But furthermore The Federal Trade Commission is watching closely to determine if it needs regulatory intervention. An FTC a workshop on Dec. 4 will examine sponsored content practices and encourage self-regulation within the publishing industry. And the Interactive Advertising Bureau, the consortium that sets standards for online ads, has a task force trying to set a framework for native advertising.

The best protection for a publisher is to encode a set of standards and processes for handling sponsored content, so each piece is not left to varying degrees of inspection or care.

The Atlantic established new standards and processes from lessons learned by running a much-criticized native ad from the Church of Scientology.

Kimberly Lau, vice president and general manager of The Atlantic Digital, notes that a large amount of time was spent thinking about proper labeling of the content and the transaction of that sale. What hadn’t been thought about enough was how that particular native ad would fit within the personality, brand and mission of the publication.

Now, every native advertising campaign has to be about thought leadership and has to fit comfortably within context of the Atlantic’s brand. The publication’s new advertising guidelines state that:

The Atlantic will refuse publication of such content that, in its own judgment, would undermine the intellectual integrity, authority, and character of our enterprise.

And:

The Atlantic may reject or remove any Sponsor Content at any time that contains false, deceptive, potentially misleading, or illegal content; is inconsistent with or may tend to bring disparagement, harm to reputation, or other damage to The Atlantic’s brand.

The American Society of Magazine Editors recently released new editorial guidelines that include rules for sponsored content, based in part on the Atlantic and the New Yorker as models. Its basic overall principles are:

• Every reader is entitled to fair and accurate news and information
• The value of magazines to advertisers depends on reader trust
• The difference between editorial content and marketing messages must be transparent
• Editorial integrity must not be compromised by advertiser influence

Regarding “marketer-provided content and native advertising” for digital media, the ASME guidelines say it “should be prominently labeled as advertising, and the source of such content and the affiliation of the authors should be clearly acknowledged.” It also recommend that “native advertising should include a prominent statement or ‘What’s This?’ rollover at the top of the advertising unit explaining that the content has been created by a marketer [or] that the marketer has paid for its publication.”

In addition to transparent labeling, content quality and standards are essential. Publishers should have policies that uphold the readers’ interests. Each publisher has to decide what level of brand influence and control it is comfortable with, and what type of content is is willing to publish.

Separating the sponsored content teams from the journalism teams is important. But it can be hard because a publisher’s resources may be limited. Also, some summit participants suggested that readers may not understand the difference anyway.

Lau said her rule of thumb is that the content should be so useful and accurate that the reader wouldn’t care whether it was sponsored or not. If the reader would be upset to learn after reading that this content was sponsored, then somewhere you’ve crossed a line.

Chapter 6

How it is created

As we noted in our discussion of the four business models for sponsored content, there are varying levels of involvement from the brand and the publisher. In some cases the brand is on its own to produce what it wants to publish. But in many cases someone working for the publisher plays a role.

The goal is to refine a piece to the point that it is informative and something readers would really want.

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Most publishers seem to have a separate stable of writers/editors for any original sponsored content. They keep it out of the newsroom. Though newsroom people may have some say in final approval before publication.

For example, BuzzFeed, Gawker, Hearst and Washington Post each have teams ranging from five people to 40 who produce their sponsored content.

At some publications, staff in production, design or technical roles may be shared between regular journalism and sponsored content. For example, Vox Media has a video production unit where camera operators and video editors produce the technical aspects of both types of content.

Most publishers operating in the “agency model” also seem to agree they have to work with sponsors to craft and elevate the content so it works both for readers and the sponsor. It rarely comes in right the first time.

The goal is to refine a piece to the point that it is informative and something readers would really want, says Alec Dann, vice president of media operations at marketing firm FierceMarkets.

Max Levy, who produces sponsored content pieces for the Atlantic, says his goal is always to “share a good story” that is on par with the quality of editorial content.

Chapter 7

How to measure success

Most publishers at our summit said they track all the typical content metrics when measuring the reach of sponsored content — views, unique visitors, time spent, etc.

Most also share these metrics with sponsors but guarantee little or no specific results. Publishers that maintain more control over the content seemed to feel more comfortable guaranteeing some performance results.

The most-common metrics to prioritize are impressions and engagement (measured both in time or in social sharing).

The Minneapolis Star Tribune plugs in other advanced data services to track the demographics of sponsored content readers and to measure offline actions, such as purchases that they make after reading the content.

There’s room for improvement here. Many at our summit noted metrics they would like to be able to track and to show sponsors in the future, including reading completion rates, offline behavior or purchases after viewing, and social media data to know how the readers are connected to the sponsor via those networks.

Chapter 8

Unsolved challenges

Even the best experts we gathered for our summit acknowledged some areas where knowledge is missing.

Reader impact: For one, it’s difficult to know what readers’ tolerance for and reaction to sponsored content is. For all the talk on many sides about whether credibility is affected, no one knows for sure. More research is needed.

Is it just publishers? Edelman’s Steve Rubel said he thinks this trend is mostly driven by publishers’ fervent desire for new revenue, but whether brands and consumers will fully embrace it is less certain.

Pricing: No one seems to know what sponsored content should cost. Different packages and types of products varied widely in cost, some up to tens of thousands of dollars for a single post. The variation in products and newness of the trend has left pricing very unsettled.

Scale: Some think sponsored content can’t scale up to a point where a single piece of content could run across many sites via a shared marketplace. Others think the market will inevitably reach large-scale efficiencies. There was no agreement at our summit.

From our perspective, it seems that for publishers the current environment of scarcity is better than seeking large scale.

There’s always more money in larger-scale activities, but for whom? Scale leads to commoditization, where the middlemen and tech companies win, just like they did with display ads. Protecting the value of your unique audience and standards keeps native advertising truly “native.”

Moving forward

Looking ahead, we expect to see more news publishers attempt versions of sponsored content. Innovative leaders run at what is growing, and sponsored content is certainly a growing and promising new revenue stream. In an otherwise challenging business environment for news media, experimenting with a new thing that’s working is hard to resist.

This is not simple, however. The “native” nature of native advertising requires each publisher to think through a unique strategy appropriate to their audience and their values. Publishers also have to invest money in hiring new staff, or vendors that specialize in sponsored content production.

The best advice for publishers is to proceed thoughtfully — with careful consideration for your credibility and with a close ear to your advertisers’ needs and your audience’s feedback. This means setting high standards and being willing to say “no” in some cases. And it means constantly re-evaluating what’s working and what is not.

Chapter 9

Appendix: What specific publishers, brands and analysts are doing

We asked participants in our Thought Leader Summit on sponsored content to give us some specific information via a survey. Here were their responses:

Publishers using sponsored content

Forbes

Mark Howard, chief revenue officer:

Q: What does your organization offer in terms of sponsored content / native advertising / content marketing? What is the content and how is it delivered? What do you call it?

Forbes BrandVoice allows marketers to connect directly with the Forbes audience by enabling them to distribute content – and participate in the conversation – on the Forbes digital publishing platform. Each BrandVoice is produced by the marketer.

Q: How does your sponsored content process work? For example, what is the process of sales and content creation from start to completion?

BrandVoice is bought on a monthly site license model that allows the brand unlimited publishing. Each brand is responsible for creation of their content, however we do offer a service to help with that content creation if they need it. The majority of the BrandVoice partners are doing their own content ensuring it’s in line with the topics that interest them most, provide them to be in charge of the stories and thought leadership content that they’re distributing.

Q: In what ways do you see your approach to sponsored content as different than others in the industry?

BrandVoice is about brands being able to create content in their own voice and use the same tools that the Forbes editorial operation uses to publish. We aren’t looking to write content on their behalf in the tone or voice of Forbes. The audience wants to hear directly from brands and as long as the brands respect the experience that a user is expecting on Forbes then the audience will engage just like they do any other piece of content.

GFR Media

The largest communications media company in Puerto Rico
Loren Ferre, general manager of Indice:

Q: What does your organization offer in terms of sponsored content / native advertising / content marketing? What is the content and how is it delivered? What do you call it?

We have worked with three types:

Contextual advertising — where the ad is located near or in the same page where the related editorial content publishes.

Sponsored — where we produced the strategy & web and print content for back-to-school initiative for Procter & Gamble.

Content in relation to daily deal offers.

Q: How does your sponsored content process work? For example, what is the process of sales and content creation from start to completion?

The sales executive works with the ad agency or directly with the client, and the idea is produced in a team effort in the supplements department of GFR Media.

The advertisers pay for a package and the rate depends on the content production and ad space. It is handled case by case.

Huffington Post

Jorge Urrutia, vice president of operations, and Tessa Gould, director of HuffPost Partner Studio and native ad products:

Q: What does your organization offer in terms of sponsored content / native advertising / content marketing? What is the content and how is it delivered? What do you call it?

We have an in-house creative agency called HuffPost Partner Studio that works with brands and agencies to create branded content (e.g., infographics, listicles, brand blogs, slideshows, video mashups etc.) that is promoted in premium native ad placements (in-stream) on the HuffPost platform.

We refer to it as sponsored content, but it is promoted / distributed across the site in native ad units.

Q: How does your sponsored content process work? For example, what is the process of sales and content creation from start to completion?

We go to market proactively and also respond to RFPs. Our HuffPost Partner Studio team works on initial pitches with the sales team, and once the sale is made, works with the client / agency on developing, creating, launching, and delivering the products

Q: In what ways do you see your approach to sponsored content as different than others in the industry?

We don’t give advertisers free range to our CMS — that is, the ability to upload directly to our CMS. A big part of our value proposition is that you work directly with a member of the HuffPost Partner Studio team that will create original content for the brand specifically for the HuffPost platform OR provide editorial oversight and guidance for any content that a brand has written and wishes to post to our platform.

Vox Media

Owner of SB Nation, The Verge and Polygon
Chad Mumm, creative director:

Q: What does your organization offer in terms of sponsored content / native advertising / content marketing? What is the content and how is it delivered? What do you call it?

“We offer sponsored content in video across all three of our vertical sites (The Verge, SB Nation, and Polygon). The content ranges from custom video content created with our advertising partners to sponsorship of editorially driven video series.

On SB Nation we offer a sponsored post model on our local team blogs.

Q: How does your sponsored content process work? For example, what is the process of sales and content creation from start to completion?

We have a dedicated group at Vox called Vox Creative that oversees the creative development, production, and execution of any sponsored content.

Q: In what ways do you see your approach to sponsored content as different than others in the industry?

We leverage our reputation for creating beautiful and engaging, community-driven web products in our sponsored content and not our editorial authority. We are extremely clear about the line between sponsored content and our editorial content and do not see any value in being ambiguous or dishonest or trying to “trick” users in consuming our sponsored content. We make sponsored content that stands on its own merits.

Wall Street Journal

Robin Riddle, global publisher, WSJ Custom Content Studios:

Q: What does your organization offer in terms of sponsored content / native advertising / content marketing? What is the content and how is it delivered? What do you call it?

We produce sponsored content and customized content marketing solutions for our clients. These programs take many forms but are essentially a combination of visual and written, brand-centric story telling. The brand we use to publish this work is WSJ. Custom Content Studios.

Q: How does your sponsored content process work? For example, what is the process of sales and content creation from start to completion?

It’s a collaborative process starting with brand or communication objectives. We create an idea, and then consider delivery options across the relevant platforms, depending on who the target audience is.

Q: In what ways do you see your approach to sponsored content as different than others in the industry?

We see “sponsored content” as editorial that our newsroom has produced and the marketer simply sponsors it, so has no involvement in the process of creating it.

Washington Post

Kelly Andresen, director of ad innovations and sales planning, and Anna Heatherly, manager of mobile ad sales:

Q: What does your organization offer in terms of sponsored content / native advertising / content marketing? What is the content and how is it delivered? What do you call it?

We offer both sponsored content and native advertising across all platforms including: print, digital, mobile, video and live events. The solution is called WP BrandConnect.

Sponsored content is editorial content that is sponsored by an advertiser. Native advertising is content that is either produced by the client or we can create the content on their behalf that is clearly labeled as sponsored generated content and is promoted throughout our platforms. This content is mostly in the form of long-form articles, videos or graphics, since that’s what our readers come to us to find.

Q: How does your sponsored content process work? For example, what is the process of sales and content creation from start to completion?

Content assets can be provided to us by the client, or we can coordinate the creation of custom content through our network of dedicated designers, videographers, producers, and writers who are part of our custom content team to meet advertisers’ needs.

Once the content has been reviewed and approved by the client, content is then published in our CMS across desktop and mobile web, and in print by a member of the advertising team. The newsroom is not involved in the creation or publication of any WP BrandConnect content.

WP BrandConnect content is then promoted in designated positions across the desktop and mobile web homepage, appropriate section fronts, in PostTV, as well in appropriate features, and in print.

Total costs to the advertiser includes both content development and promotion and performance reports are provided throughout the campaign.

Q: In what ways do you see your approach to sponsored content as different than others in the industry?

WP BrandConnect is not just a destination site. It is truly integrated into the full reader experience across desktop, mobile, and print. WP BrandConnect content can be found in clearly labeled blogs, the Grid, X-Streams, Topic.ly, as well as promoted across relevant content areas of the site.

In addition, WP attracts a highly engaged audience that interacts with WP BrandConnect content that same way they interact with editorial content, because the placements are so well integrated.

What brands want

Dell

Stephanie Losee, managing editor:

Q: What does your organization want out of sponsored content? What are you looking to accomplish?

We use sponsored content in different ways (and I’m sure we’re using terms that don’t mean the same thing).

On our owned platforms, we call our thought leadership “sponsored content” (Insights from Dell) in order to be fully transparent to our audiences. On paid platforms (like Forbes BrandVoice or the pilot we’re working on), we use sponsored content to put our content and the ad that goes with it in front of audiences on third-party sites where they gather.

Q: How does sponsored content fit into your organization’s broader strategy for marketing and branding?

It is one component of the paid / owned / earned strategy.

Q: What successes have you seen?

Content going viral. One example was a blog paired with a drawn infographic done by a bestselling author and award-winning illustrator about a topic having nothing to do with Dell, which we published on our Forbes BrandVoice page.

It went viral and was chosen by Houghton Mifflin for “Best American Infographics,” which will be published next month. It will say “Illustration by Wendy MacNaughton; published by Dell Inc. on Forbes.com.” That was a proud day for me as Dell’s managing editor.

Q: Have you encountered any challenges or issues you didn’t expect? If so, what are they? What could news organizations do to fix the problem?

I’ve never encountered a problem. I’ve only watched other companies or publications encounter problems — usually when they use sponsored content to put something over on audiences. Transparency is vital.

Xerox

Ken Ericson, director of content marketing:

Q: What does your organization want out of sponsored content? What are you looking to accomplish?

Offer thought leadership to assist in our brand transformation. Its not intended for sales generation but to change perceptions of our company.

Q: How does sponsored content fit into your organization’s broader strategy for marketing and branding?

It’s a key driver in building belief for the new Xerox.

Q: What successes have you seen?

Xerox’s sponsored content site for healthcare, HealthBiz Decoded has become a news source for other publications, had its content amplified by other vendors and been awarded for its storytelling.

Q: Have you encountered any challenges or issues you didn’t expect? If so, what are they? What could news organizations do to fix the problem?

News organizations need to be able to provide brands with detailed metrics on how to measure the success of their content.

Analysts, vendors and experts

Altimeter Group

Research and consulting firm for companies challenged by disruption
Rebecca Lieb, analyst:

Q: What challenges do you see for news organizations who use sponsored content?

Defining it, training staff for it, scaling it, developing policies around it.

Q: Where and how have you seen sponsored content executed well?

Mashable, Gawker Media, BuzzFeed

Better Business Bureau

Lee Peeler, president of the Advertising Self-Regulatory Council:

Q: What challenges do you see for news organizations who use sponsored content?

Maintaining the trust of their readers and credibility of their journalism while providing advertising-supported content. In providing native advertising vehicles publishers will also be assuming greater responsibility for the content of the advertising as well as the accuracy of the content.

Q: Where and how have you seen sponsored content executed well?

There are numerous example of excellent sponsored content. What publishers need to be wary of is content that is misleading and not identified as sponsored. Examples from the past included paid for or otherwise compensated tweets or blogs, paid programming imitating the format of consumer reporting or news programing, “viral” videos with undisclosed paid for content.

Edelman

The world’s largest public relations firm
Steve Rubel, chief content strategist:

Q: What challenges do you see for news organizations who use sponsored content?

Artfully balancing the needs of the audience, the business and the advertisers.

Creating tiered pricing that makes sponsored content more accessible to more advertisers.

Maintaing quality control as automation seeps in.

Q: Where and how have you seen sponsored content executed well?

Advertising Age and Mashable — made it very accessible for business audiences while providing realistic metrics.

Tribune Content Studio — provided proposals with lots of ideas.

Fairfield University

Private university in Fairfield, Conn.
Michael Serazio, assistant professor:

Q: What challenges do you see for news organizations who use sponsored content?

As a scholar who studies this (as opposed to a practitioner who participates), it strikes me as endangering the credibility of news organizations that employ it. I understand why advertisers and brands are eager to explore this option for promotion (people don’t want to engage with banner ads, etc.) and I understand the need for news organizations to come up with new means of financing, but there has to be an ethical dilemma that’s being worked out (or overlooked) here.

FierceMarkets

Online marketing agency based in Washington, D.C.
Alec Dann, vice president of media operations:

Q: What challenges do you see for news organizations who use sponsored content?

Clear labeling.
Providing information that readers will value.
Content must be congruent with brand standards.
Requires separate editorial staff or clear guidelines on what editorial involvement can entail.
Project managers and sales need clear guidelines on how editorial involvement will work.
Sponsor needs clear guidelines on what content is acceptable and what vetting process will be.

Mashable

Todd Wasserman, news editor:

Q: What challenges do you see for news organizations who use sponsored content?

The main challenge is for news organizations to maintain the integrity of their own brands. If you run sponsored content that runs contrary to what your brand stands for, there’s discord.

Q: Where and how have you seen sponsored content executed well?

BuzzFeed does some interesting stuff. The content can be compelling and often, on-brand.

NewsCred

Content marketing agency
Jennifer Stenger, director of publisher development:

Q: What challenges do you see for news organizations who use sponsored content?

Authenticity. To be a good experience for all that content needs to be authentic to the site itself and the audience and can’t feel too out of place. Finding that right match in a scalable way can be challenging.

Q: Where and how have you seen sponsored content executed well?

BuzzFeed is obviously the best example. Part of the reason is that it’s truly part of their publishing ecosystem.

Ogilvy

Global communications and PR agency
Matthew Greenberg, vice president of content strategy, Social@Ogilvy:

Q: What does your organization want out of sponsored content? What are you looking to accomplish?

We look to tell quality stories — emotional or informative or both — that are contextual, relevant and helpful to the consumer.

Q: How does sponsored content fit into your organization’s broader strategy for marketing and branding?

It will become a larger and larger focus for our digital/social marketing efforts.

Publish2

Native advertising technology platform
Scott Karp, CEO and founder:

Q: What challenges do you see for news organizations who use sponsored content?

The biggest challenges for news organizations using native advertising are editorial control and scale.

News organizations can’t treat native ads like display ads and just accept whatever advertisers give them. They must be able to curate native ad content to ensure it fits with their brand and is relevant for their readers. They also need to optimize content selection to ensure high engagement for advertisers.

Most news organizations are using a manual process to manage native advertising, adding sponsored content to their CMS one item at a time. To scale native advertising, they must be able to automate content management for a large number of advertisers, same as they currently do for display ads. But unlike display ad servers, news organizations need a platform that is deeply integrated with their CMS, because fundamentally native advertising is content.

With editorial control and scale for native ads, news organizations will be able to safely and reliably secure a high-growth revenue stream, especially for their mobile products.

Q: Where and how have you seen sponsored content executed well?

With respect to quality, I agree largely with the answers given by other respondents. But with regards to quantity, or execution at scale across publishers, that we have yet to see.

Speakeasy

Content marketing company co-owned by the Dallas Morning News
Mike Orren, president:

Q: What challenges do you see for news organizations who use sponsored content?

Figuring out “nonstandard” placements both in terms of workflow and technology. Understanding the difference between advertorial and sponsored content.

Q: Where and how have you seen sponsored content executed well?

Dallas Morning News — GuideLive (Disclosure, my company does that work).

New York Times: CitiBikes in-app placement

Chapter 10

Appendix: Participant list and related readings

Related reading

We recommend the following resources and articles that were based on or closely related to our sponsored content summit discussion.

Defining and mapping the native advertising landscape
This report by Altimeter analyst Rebecca Lieb, one of our summit participants, is an efficient and insightful summary of what native advertising is, who the stakeholders are, and the keys to doing it well.

The push to define, guide ‘native advertising’ intensifies
Dena Levitz writes about key insights from the summit and what’s happening in native advertising trends.

Why native advertising is the opposite of porn
Mashable’s Todd Wasserman summarizes some of the valuable things he took away from the summit discussions.

Summit participants