A reader's question: Why have you been down on native advertising when it's been giving us a necessary boost?

By William Dunkerley

Q. Your last two issues raked native advertising over the coals. I get it that you don't like it. You're not seeing it from my point of view. It's easy for you to call it a bad practice. We don't have that luxury. My publication has bills to pay and a staff expecting regular paychecks.

We've been around for a while and hope that we're here to stay. But we've had to put up with tough times. The recession ten years ago was an awful setback for us. We had to cut our editorial staff and find ways to produce each issue with less money.

We kept all our ad staff, but they weren't having much luck. We started hearing about native advertising about five years ago. Our ad guys jumped right on it. They saw advertisers wanted it. Now it's helping to pay our bills. What's wrong with that? What else should we be doing?

A. You're not alone in reacting negatively to the stories in our last two issues. In fact, last month four readers cancelled their subscriptions in a huff. Our August headline ran "Native Advertising Is Toxic," and September had "Advertisers Thirst for Sponsored Content."

We get the message: Many advertisers like the idea of placing paid content about their products or services. Many publishers are relying upon revenue from native advertising. Our point, however, is that such a reliance may not be in your long-term best interests.

It remains questionable how effective native advertising really is. I mean, if you cut away all the fluff and excitement about it, what are the ultimate benefits for the advertiser? There's also the problem of how the presence of native advertising might damage reader trust in your publication.

So we're not suggesting that publishers go cold turkey on native advertising. It's just that it may not be the ultimate solution they're seeking.

You mentioned hearing about native advertising five years ago. But my familiarity with it goes back to the early 1990s. That's when the United States began sending me to work with publishers in countries emerging from communist economies. In all, my firm did intensive work in seven such nations. Their publishers had previously relied upon state budgets to function. Making money in a market economy was novel to them, and many were struggling to survive. Selling advertising and subscriptions required skills that were in short supply.

The publishers were resourceful. In the prior era, they were basically paid to present content that served the governments that were paying the bills. In the new era, publishers took that concept and put it on the open market. This was particularly visible with daily newspapers. One could get a price list showing everything from a front-page headline story to a minor blurb. A paid-for story didn't necessarily have to promote your own product or service. You could buy an article that disparaged your competitors, too.

The term for this wasn't native advertising. They called it hidden advertising, a more honest portrayal.

How did hidden advertising work out for them? It kept most of them from closing their doors. Some eked out a marginal existence. But those publications that had "advertisers" with deep pockets did really well.

That may seem like a happy outcome for the top publishers of hidden advertising. However, many of them ended up losing their publications because many of the advertisers moved in and took control of the publications.

There's a lot more nuance to the story. But in the end, readers were smart enough to see that the content they were getting was meant to serve the interests of those paying the bills. Readers were being shortchanged. By the early 2000s, opinion polls showed such a loss of confidence that up to three quarters of the population favored a return to state censorship.

And that's one of my main messages to you. If you continue publishing advertising that masquerades as editorial content, smart readers will eventually realize they can't count on you to serve their needs. You will lose your credibility.

We are publishing at a time when there is an overwhelming amount of content online. Much of it is free. It's available with a simple search.

Audiences are increasingly aware, however, that a lot of that online content may be unreliable.

That is the key to our value as publishers. We can successfully aggregate audiences if consumers believe they'll get the unvarnished truth from us. This is the advantage we offer. But if we fill our pages, in print or online, with "hidden advertising," it can seriously weaken our credibility and reduce our attractiveness to the audiences that we seek.

What happened to the postcommunist publishers that managed to remain independent? Some of them never were able to make the transition to supporting themselves through legitimate advertising and subscription revenues. But those that were able to master new skills did well. One publisher told me her advertising revenues tripled in no time. Another used his plentiful revenue to build a large multi-title publishing operation.

The important ingredient for those success stories is that the publishers became proficient in selling advertising and subscriptions. Increasing subscription profitability follows a slower up-curve than we see with ad sales. You'll get quicker results from ad sales.

I know it's easy to grab ad money from advertisers that are itching to buy native advertising. I'm not suggesting that you turn away that money. But keep in mind that the more hidden advertising you publish, the more you will erode your intrinsic value in the information marketplace.

Taking money from eager advertisers wanting to place content in your publication is what I'd call "order taking." That requires a far lower skill level than is needed to sell display advertising that will, in the end, outperform native advertising.

Native advertising may be giving you the "necessary boost" you mentioned. But I strongly recommend that you start increasing your team's sales skills. You said you want to be "here to stay." Greater proficiency in ad sales techniques will do much to help you achieve that goal.

William Dunkerley is principal of William Dunkerley Publishing Consultants, www.publishinghelp.com.

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In the news: An October 28 NYMag.com piece takes a close look at where things stand at the magazine publishing giant, and where it might go in the future.

This week, Reeves Wiedeman of NYMag.com published a longform piece on the current state of things at Condé Nast. He talks shop with editor and artistic director Anna Wintour, who acknowledges that the company has faced difficult times and a lot of upheaval in recent years but expresses optimism about the future. Wiedeman sums up the current state of things thusly: "It's a company that lost as much in 2017 as it made in profit in 2003. It has two dozen brands, which used to be called 'magazines,' nine of which still have print editions in the U.S." Wiedeman discusses how Wintour has made her mark on the company, sometimes stirring up controversy in the process.

Wiedeman also examines leadership under the Newhouse family and CEO Roger Lynch. "Wondering how much the Newhouses still love the magazines keeps some Condé staffers up at night," he reports. Despite rumors that the company will go up for sale, the Newhouses insist that they remain dedicated to the company and they will not be selling it. Read more here.

Also Notable

Folio:'s Annual Salary Survey

Last week, Greg Dool reported on Folio:'s annual salary survey. The bottom line, he writes: "Overall compensation levels remained fairly consistent year-over-year for publishers and marketing directors, while salespeople at the account-executive level reported an overall decline in median base salary, particularly at consumer-facing publications." Also notable, the survey revealed that female marketing directors, account executives, and publishers continue to earn less than their male counterparts ($0.78 on the dollar for female publishers, says Dool). Read more here.

Publishers on TikTok

Some publishers are examining TikTok, a social media app that that features short videos. Options for publishers are limited at this point, however, so for now they are just experimenting. "Currently, there is no mechanism for creators or publishers to directly monetize on TikTok, such as with sharing ad revenue, but all three publishers are hopeful there will be one day," says Deanna Ting of Digiday.com. Among those publishers using TikTok are Vice, Buzzfeed, and Hearst Magazines. Read more here.

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