Media buyer of the day, Gates Foundation edition

By Felix Salmon
November 18, 2011

I’ve been thinking a lot of late about brands and media — as have people like Noah Brier. If you want to build your brand online, the best way of doing so is not to rent media, but rather to own it. To use Noah’s distinction, you want a sustained product, rather than a temporary campaign. Here’s Noah:

How does this look? On the extreme end it’s BabyCenter, RedBull.com or AMEX OPEN Forum, those brands are so far out ahead of everyone else from a publishing standpoint it’s just amazing. And look at the value they’ve created for themselves: Their sites are big enough that other brands want to advertise on them to reach the audience they’ve amassed. Not necessarily the most important thing for the brand, but a pretty good statement about what they’ve accomplished.

Now what happens if your aims are a not selling baby stuff, or fizzy drinks, or financial products? In fact, what happens if your aims aren’t selling anything at all?In that case, you might not mind if someone else were doing the publishing, just as you managed to achieve your goals at the same time. Which brings me to a very interesting $2.5 million grant from the Gates Foundation, which is sponsoring the Guardian’s global development microsite for three years.

The Gates Foundation actually launched the site in 2010, spending an undisclosed sum to do so; the new grant keeps the site going for another three years. As part of the deal, every page in the site — be it blog post or news story — gets prominently branded with the Gates Foundation logo, right at the top of the column where all the editorial content goes. (In fact, the logo is significantly larger than the Guardian’s own logo at the top of the page, although the site looks and feels like the rest of the Guardian site, and lives at guardian.co.uk.)

From an old-media perspective, this is a fantastic deal for the Guardian, which retains full editorial control:

The world’s news organisations can no longer rely solely on advertising and sales revenues. So, as we look beyond traditional sources of funding, the backing of third parties who are willing to support our journalism while respecting our editorial freedom enables us to explore important subjects that may too easily be neglected elsewhere. Sponsorship of individual sections and pages already exists in other areas of guardian.co.uk, and can make possible the otherwise impossible. Without sponsorship, a project such as our global development site would simply not have been realised with such depth and ambition.

What the Guardian doesn’t say, here, is that $2.5 million is what’s technically known as a shit-ton of money. It’s vastly more than it could ever get from ad revenues on a niche site like this — even at a $20 CPM, you’d need to serve up 125 million pageviews over three years to get that much money. Global development issues have a substantial audience, but not that substantial.

More importantly, $2.5 million is significantly more than it costs the Guardian to put together a micro-site like this — this deal is profitable, for a media organization which, like most, is in desperate need of profits. In fact, it’s a twofer for the Guardian, which manages to improve its revenues and also beef up its editorial offerings in one go.

Looked at from the point of view of the Gates Foundation, there’s real value here. For one thing, all of the content automatically gets a lot more credibility than it would if it were published by the Gates Foundation directly, especially given the suspicion with which it’s already regarded. And frankly, publishing well-written, agenda-setting material for a mass audience is not one of the Gates Foundation’s core competencies: if they tried to do it, there’s a good chance they wouldn’t do it very well. (Non-profits in general seem constitutionally incapable of getting out of their wonky high-serious comfort zone.)

And the way these deals are structured, they do a pretty good job of minimizing the sulfurous smell of advertorials and “sponsored content” which has a habit of lingering in even the glossiest sponsor-driven site. Which isn’t to say that they’re not criticized. The Seattle Times did a 2000-word investigation into the Gates Foundation’s media sponsorships earlier this year, and found it quite easy to find critics:

Gates-backed think tanks turn out media fact sheets and newspaper opinion pieces. Magazines and scientific journals get Gates money to publish research and articles. Experts coached in Gates-funded programs write columns that appear in media outlets from The New York Times to The Huffington Post, while digital portals blur the line between journalism and spin…

“Even if we were to satisfy ourselves that the Gates Foundation were utterly benign, it would still be worrisome that they wield such enormous propaganda power,” said Mark Crispin Miller, professor of media, culture and communications at New York University…

“It would be naive to believe big-money foundations don’t play the same game that corporations and other special interests do,” said Marc Cooper, assistant professor at the University of Southern California’s Annenberg School for Communication & Journalism.

Cooper actually isn’t troubled by the Gates Foundation, but his point is well taken: if the Gates Foundation can do this kind of thing, other organizations can too. If, that is, they have a lot of money: the foundation’s direct funding for media and media programs, has now reached the $50 million level, and includes $3.6 million to the PBS NewsHour, $3.3 million to Public Radio International, $5 million to NPR, $1 million to Frontline, and $1.5 million to ABC. More controversially, the foundation gave a $500,000 grant to the Brookings Institution so that it could “re-engineer media coverage of secondary and postsecondary education.”

It also helps if you’re all non-profits: most of the recipients of Gates Foundation grants, including the Guardian, PBS, PRI, NPR, and Brookings, fall into that category. The Gates Foundation is clearly happier dealing with other non-profits, and I suspect that places like the Guardian are much happier letting the Gates Foundation “support” a large chunk of their editorial copy than they would be with, say, Monsanto doing the same thing.

The one weird thing about the Gates Foundation’s media partnerships is that the foundation doesn’t seem to value the exposure it’s paying so much for. It’ll go into great detail about how it wants to “build understanding and stimulate conversation around challenges of inequity”, but will tell you, if asked, that “we do not view these partnerships as advertising”. Which is a little bit weird, because the Gates Foundation branding is extremely prominent on the Guardian microsite, and the foundation also accepts all the broadcast recognition that comes with sponsorships on NPR or PBS.

This exposure — at least in context like the Guardian’s microsite — is more valuable than traditional advertising, for the reasons Noah laid out and because it positions the Gates Foundation as an entity which is providing great independent content, rather than one simply pushing its own message. Is all that value really going to waste? I doubt it, somehow — I suspect that somewhere along the line, the foundation was quite active in negotiating its logo placement on the site.

I’d love to see a little more transparency on this front: what value does the foundation think its getting out of that logo placement, and the NPR announcements that it sponsored some show or other? And if the logos and the announcements went away, how much would that reduce the amount of money the foundation was willing to give? Because somewhere in here there’s a model, I think, which can be applied to media buyers who aren’t the Gates Foundation. And I’d love to see how it works.

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