Opinion

Jack Shafer

It’s an ad, ad, ad, ad world

Jack Shafer
Mar 13, 2014 20:10 UTC

The last place you’d expect to discover a map to navigate the future of the content-advertising landscape would be a book about the golden age of radio. But damn it all to hell, there it is on the concluding 12 pages of Cynthia B. Meyers’ new book, A Word From Our Sponsor: Admen, Advertising, and the Golden Age of Radio.

Not to discourage you from reading Meyers’ first 281 pages about the co-evolution of broadcasting and advertising before excavating her new media insights, but this is one of those books that demands to be read backwards — conclusion first, historical arguments and research later. In Meyers’ view, advertising is not something appended to radio and TV broadcasts or shimmied into the pages of newspapers and magazines. Advertising has been both the dog wagging the tail and the tail wagging the dog, sometimes occupying points in between, its symbiotic relationship with popular media forever ebbing and cresting. And while the past never predicts the future, this book gives readers a peak around the media future’s corner.

The commercial Web that permeates our culture today was revolutionary because it allowed news and entertainment content to migrate from the lockdown of the radio and TV networks, as well as from print. But that migration was already in progress when the first banner ad (for AT&T) ran on Hotwire.com in late 1994. A decade before, cable had given advertisers new venues to place their TV bets, and VCRs (and later DVRs) gave viewers the power to time-shift and edit ads out of their consumption. The advent of videotape and discs further liberated audiences from advertising’s hold.

The break-up of the old three TV networks hegemony was accelerated by the emergence of digitized online distribution platforms for news and entertainment. Audiences — once prisoners of their living rooms — could now partake of the media menu anywhere they toted a mobile device.

Always nimble in the face of change, advertisers coped with the transitions by doing more of what they were doing in the first place. They purchased ad-space near the very most popular content (Super Bowl, Olympics, top-rated shows) to maximize each ad’s reach and also placed more of their ads near specialized content (travel, cars, beauty, fashion, home and design, food, finance, sports) where the ad message might more predictably be turned into a purchase. Where airtime turned cheap, advertisers created infomercials, those deceptive ads clothed in the video grammar of news or entertainment. As new platforms like the Web and mobile arrived, advertisers adjusted their pitches accordingly.

What’s worse than sponsored content? The FTC regulating it

Jack Shafer
Dec 6, 2013 17:43 UTC

What’s more dangerous to consumer well-being, sponsored content or the intervention of the Federal Trade Commission? On Wednesday, the agency held a conference, “Blurred Lines: Advertising or Content,” to “discuss native advertising,” as the New York Times put it. The event attracted several hundred “advertisers, academics and media executives,” who listened to the agency’s views about native advertising — or sponsored content, infomercial, or advertorial, as some call it — those Web ads that are designed to look like editorial content, not ads.

Many if not most top editorial sites offer sponsored content, including the Washington Post, Huffington PostSlateTechmemeBusiness InsiderForbesBuzzFeed, the Boston Globe’Boston.com, the Atlantic, and others, and the list of advertisers includes such household names as IBM, Jet Blue, Pillsbury, Purina, Columbia Sportswear, Dell, UPS, McDonalds, and BMW. The Times piece acknowledges that it, too, will soon be joining the sponsored content caravan that brought publishers about $1.5 billion last year.

When convening a conference to “discuss” something or other, the FTC (or other regulatory entities) is almost never in pursuit of discussion — any more than a police officer who says he just wants to talk. Such conversational assemblies usually become venues in which the agency can issue a veiled threat, either directly or indirectly, to its targets, instructing them sotto voce that unless they change their ways they’ll suffer the agency’s wrath. The regulatory playbook usually dictates that the agency promise targets that unless they start observing “voluntary” restrictions, the agency will have to request legislative authority to make restrictions mandatory. Nothing can be “voluntary” if somebody is threatening to make it mandatory, but the gambit works nine times out of ten.

News never made money, and is unlikely to

Jack Shafer
Aug 15, 2013 19:26 UTC

Sometime in the mid-1990s, the Web began to peel from the daily American newspaper bundle its most commercial elements, essentially the editorial sections against which advertisements could be reliably sold. Coverage of sports, business and market news, entertainment and culture, gossip, shopping, and travel still ran in daily newspapers, but the audience steadily shifted to Web sources for this sort of news. Broadcasters had dented newspaper hegemony decades ago, absconding with breaking news and weather coverage, and inventing new audience pleasers, such as traffic reports and talk. But it was the Web that completed the disintegration of the newspaper bundle that dominated the news media market for more than a century. In addition to pinching the most commercial coverage from newspapers, the Web has also made off with the institution’s lucrative classified ads market, simultaneously reducing its status as the premier venue for content and advertising.

This isn’t to say newspapers deserted the commercial news categories. Newspapers have maintained their presence in the sports-weather-business-entertainment-culture departments to attract readers who attract advertisers. Even so, circulation has eroded and ad revenues have fallen to below 1950 levels in real dollars. The units of the newspaper bundle not yet ransacked by the Web — international, national, state, local, and political coverage – have (to paraphrase Frank Zappa) little-to-no commercial potential. Traditionally, newspapers have struggled selling space to advertisers by invoking these news varieties unless the news is absolutely spectacular or sensationalized. As the bundle fragments, it becomes more difficult for publishers to support non-commercial news.

Outlets such as Politico (a child of the Web) and the Bureau of National Affairs (a pre-Web entity, now owned by Bloomberg), which were designed to commercialize news about politics, the federal government, regulatory affairs, political campaigns, law, and lobbying, have succeeded in targeting an elite Washington, D.C., audience with this kind of news. But those successes don’t subtract from the fact that Washington news is a loss leader for most mainstream newspapers. The same is largely true of international and national news. No mass audience is willing to directly pay for such news outside of the one already served by the New York Times (combined daily print and digital circulation, 1,865,318). Even At the Times, subscribers now contribute more revenues than advertisers, indicating that they value its mission more than Madison Avenue does.

And now, a word against our sponsor

Jack Shafer
Mar 8, 2013 21:36 UTC

The Washington Post‘s website joined the sponsored-content stampede early this week with the introduction of its BrandConnect Web product, making it the first major U.S. newspaper to embrace sponsored content, according to Digiday. Other high-profile Web publishers selling sponsored content include Gawker, Huffington Post, Business Insider, Forbes, BuzzFeed, Slate, Cheezburger, Techmeme and The Atlantic. Meanwhile, Fortune magazine is creating Fortune-branded content “for marketers to distribute on their own platforms,” AdWeek reports.

Also known as native advertising, the current wave of sponsored content on the Web can resemble the advertorial sections you’re familiar with — the ponderous Russia Beyond the Headlines Today and China Daily pages in the print editions of the Post and the New York Times, which nobody reads, and those sections in glossy magazines you automatically skip. Or, it can look remarkably like the content the site already produces. 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,” as the Wall Street Journal reported last October. BuzzFeed sponsored content costs about $20,000 for five or six “articles,” reports Digiday.

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. The average sponsored-content page pits the advertiser against the publisher; the former attempts to make his copy and art look as much like conventional news or feature copy as powerfully as the latter pushes back as hard as he can to preserve “editorial integrity” without forfeiting the maximum fee. It’s common for both sides to come away from the transaction feeling soiled and swindled, but, hey, that’s the nature of most advertising.

The great newspaper liquidation

Jack Shafer
Jun 5, 2012 22:53 UTC

In his 2004 book The Vanishing Newspaper: Saving Journalism in the Information Age, Philip Meyer imagined “the final stages” of a “squeeze scenario” by a newspaper owner who wanted to exit the business but didn’t want to actually sell the title: He would start charging more for his newspaper and delivering less, commencing the “slow liquidation” of his property. This slow liquidation would not be immediately apparent to observers, Meyer wrote, because the asset “being converted to cash” would be “goodwill” – the newspaper’s standing in the community and the habit of advertisers and subscribers of giving it money.

One reason an owner would want to extract a newspaper’s goodwill value before selling its physical assets – its real estate, presses, computers, trucks, paper, ink, etc. – is that traditionally, goodwill is where most of a newspaper’s value has resided. When Meyer asked two newspaper appraisers to estimate how much of a newspaper’s value was locked up in goodwill versus physical assets, both gave him the same answer: 80 percent goodwill, 20 percent physical assets.

Selling goodwill is a dangerous strategy because once sold, it’s difficult to reacquire. But a newspaper owner who feels trapped by losses and can’t find a new owner at what he considers a fair price may feel he has no alternative but to cheapen his newspaper bit-by-bit, month-by-month. He may explain the goodwill sell-off as temporary economizing to be reversed once business conditions improve, or even as the exploration of a new business model. Sellers of newspaper goodwill might protest that the financial losses they’re absorbing constitute a serious investment in the newspaper’s future, that they’re harvesting nothing. But don’t be fooled. If you’re winding your company down with no strategy to wind it up, you’re burning goodwill even if you don’t acknowledge it.

  •