It's an old, old conundrum that rears its ugly head in print, broadcast, and online media: How can publishers and other content producers make money without sacrificing integrity?
Many venture capital firms are requiring sites that they fund to show a return on investment for every page. Publicly held sites are under fire by stockholders to pump up the bottom line. Advertisers are beginning to clamor for transaction fees, rather than flat rates, because it is too hard to track the effectiveness of their marketing dollars. It is clearly crunch time.
The Internet was built largely on the model of television, where commercials are supposed to pay for the "free" show. If you want to get the premium shows, you subscribe to cable. On the Internet, the precipitous dip in revenues from the standard advertising format, the banner, and the rejection (so far) of the subscription model are causing sleepless nights for many in the industry. Fully 30% of Internet closures last year were content sites, according to the Webmergers.com report, "Year 2000 Dot-com Shutdowns."
Because the traditional revenue streams are struggling to keep content sites afloat, newer, edgier advertising-based models are emerging. Banner ads are exactly what they appear to be-advertising space-easily ignored advertising space at that, clickthroughs being a paltry .3% to .5%. However, many recent efforts have been caustically labeled "stealth" advertising, copy that violates the sacred boundary between editorial and advertising.
New Medium, New Rules?
Print and broadcast media, which have been regulated voluntarily or otherwise for decades, have established a clear line between editorial content-"stuff" that is information or entertainment-and advertising, stuff that is meant to sell things or build a brand. However, the Internet is still a new medium, and a uniform set of guidelines has not been adopted, although organizations like the American Society of Magazine Editors have proposed some. Further, many in the generation now active in online writing and publishing didn't come up through the ranks and the protocols that others in traditional media have lived with for years. Throwing up ethical firewalls when the company is in the red just doesn't compute.
In a recent article for Advertising Age, Richard Linnett wrote, "The new content creators believe advertisers will have to embed their messages...in order to be heard." As if widespread resistance to banners were not enough, we are now seeing enthusiasm for ad-blocking software, which has been proliferating among sophisticated Web users for the past three years. More than four million programs with names like AdSubtract, AdKiller, and Junkbuster have been downloaded. Creators of these ad-busting programs are striking deals with PC and modem manufacturers left and right. Altogether, advertising is struggling to stay in the game.
Advertising's New Plays
The result has been to introduce advertising material that marketers describe as relevant to, as an extension of, or as "contextual" to the content-less intrusive and in-your-face than flashy, oversized banners or pop-up ads. The soft-sell in other words. Here's a look.
Sponsorships are usually content and design partnerships, wherein a Web site area or channel is supported by a sponsor whose product or service is related. It's a kind of hybrid of news and salesmanship, where products are presented in the context of news, information, advice, or entertainment. It is extremely pricey, but much cheaper than trying to lure potential buyers to an advertiser's home page. In BabyCenter.com, for example, Gerber and Beechnut get prime real estate in sponsoring the area on baby and toddler nutrition, while Charmin hosts the section on toilet training. This approach raises the specter of undue influence from the sponsor: How will advertiser support affect the way the online media covers the companies, products, and services that advertise on their site? If Princess Cruises sponsors a travel channel on your site, do you report on other deals with better prices than Princess?