Forbes' Native Ad Cover Sparks Ethics Discussion

Molly Soat
Marketing News Weekly
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Key Takeaways
  • On Feb. 16, Forbes Inc. released an issue of Forbes in which the cover referenced a native ad within the magazine, an infographic promoting Fidelity Investment’s retirement planning products and services​.

  • This ad caught the marketplace’s attention because it was designed to look like a regular “cover line” and because the content carried a nebulous label, rather than a clearly defined “sponsored content” tag. ​

  • Publishers are wary of dedicating cover space to advertisers’ messages for fear of losing credibility for their “unbiased” reporting and staff-generated content.​

The dutifully tended line between editorial content and advertising could be a thing of the past, as publishers become more and more willing to work with advertiser-generated copy in an effort to stanch the bleeding, and as marketers become more experimental in an attempt to break through the clutter. Last week, one publisher made a move that potentially breached the ad/edit line, and prompted heated discussions between editors, publishers, marketers and readers about the ethics of some native advertising practices.

On Feb. 16, New York-based Forbes Inc. released an issue of Forbes in which the cover referenced a native ad within the magazine, an infographic promoting Fidelity Investment’s retirement planning products and services, as part of the magazine’s retirement-themed issue. 

Cover ads have been done before, of course, but this ad caught the marketplace’s attention because it was designed to look like a regular “cover line” (a reference to editorial content inside the magazine) and because the content carried a nebulous label, rather than a clearly defined “sponsored content” tag. According to the American Society of Magazine Editors’ editorial guidelines, rule No. 1 is that no ads should appear on the actual cover of a magazine, although foldouts and false covers have been used as advertising space for years, and some publishers have experimented with running small ads printed on magazines’ covers, themselves. 

Publishers are wary of dedicating cover space to advertisers’ messages for fear of losing credibility for their “unbiased” reporting and staff-generated content. And most marketers don’t want to risk alienating or angering potential customers by crossing ethical boundaries in journalism, says Bill Duggan, group executive vice president of the New York-based Association of National Advertisers (ANA). According to the ANA’s 2015 Native Advertising Survey, three-fourths of marketers surveyed believe that there is an ethical boundary for the advertising industry when it comes to native advertising. 

Marketing News Weekly
recently spoke with Duggan about Forbes’ decision to devote cover space to a content marketing piece, who’s responsible for upholding long-held publishing ethics, and what the evolving boundaries between editorial content and advertising could mean for both kinds of content.

Q: According to the ANA’s survey, 63% of respondents plan to increase budgets allocated to native advertising in 2015. Now that Forbes has broken this longstanding guideline of keeping ads off magazine covers, what’s next for the relationship between editorial and advertising content?

A: It was a rule written in a bygone era, which might be an overstatement, but it was written before the competition of the Internet. That rule has to be rewritten or there will be companies going out of business that haven’t already. … The newspaper and magazine industries can’t continue to practice business models that worked in the ’70s, ’80s and ’90s because the climate has changed. I give credit to Forbes and others that are trying to keep their business viable. 

Q: Are the rules separating editorial content and advertising being thrown out the window since print magazines are struggling?

A: [Native advertising] has got to be transparent to the consumer. It needs to be labeled, so that in no uncertain terms do the consumers feel that they are getting an editorial experience from the publisher. They need to know that this is a message that is being presented or co-presented by an advertiser.

Q: Forbes labels Fidelity’s native ads as ‘Fidelity Voice,’ rather than something like ‘sponsored content from Fidelity.’ Does this go far enough to explain to readers that this is sponsored content?

A: This places the onus of understanding on the reader. In our study, we had about 15 different labels and asked how clear they are and, of course, the ones that said “ad” or “advertisement” our respondents rated as the clearest. I realize why a marketer might be averse to using that language around a native ad, but with something like “sponsored by” or “content provided by,” that kind of language is necessary. 

Q: Forbes has long been a frontrunner in pushing the envelope with native advertising, such as creating false covers for advertisers. Is that because of its business-oriented content? Does Forbes assume that its readers understand more about native advertising and can discern it?

A: Forbes certainly has a more intelligent reader than the average magazine on the newsstand. As such, those kinds of readers aren’t as easily fooled into thinking something is editorial when it’s really an advertiser’s message. With the type of reader [Forbes has], it really needs to be on the up and up because it’s harder to fool a Forbes reader.

Q: The line between sponsored and unsponsored content is not always clear, but that line, however blurry, has been around a long time, especially in print publications. What are the pros and cons for the Fidelity marketers in this situation? Are they shooting themselves in the foot trying to promote this content through arguably deceptive means, or is this something that consumers—and, therefore, marketers—aren’t actually concerned about?

A: This is a balancing act that all advertisers have to do. I have no issue with the cover, in all candor. … If readers find that cover ad distasteful, they’ll ultimately vote with their wallets and not renew their subscriptions or come back to buy the next issue. Think about all of the talk value that this has gotten. Not all press is good press, but there have been all sorts of articles in the past week about what Fidelity has done, and to some extent, that has positioned them as a bit of a vanguard and has helped them stand out in a very crowded category.

Q: Whose responsibility is it to make sure this line is drawn? According to some experts, the onus should be mainly on the publisher, and it’s naive to think that the ad industry will self-regulate that enough. What do you think?

A: My quick answer is that it’s both. The advertiser has to have some accountability because if a publisher does something wrong, it’s not just the publisher who’s admonished. It’s the advertiser, as well. If I’m an advertiser, I’m not just going to leave it up to the publisher to make sure there’s proper disclosure. I think an advertiser really needs to have an active role in ensuring that the disclosure happens. Otherwise, it’s their brand and their credibility that will be questioned.

Q: It’s all well and good for advertisers to fill out an ANA survey and check a box saying, ‘I’ll be responsible for upholding ethical journalistic practices.’ But in practice, it’s a marketer’s job to push the boundaries of what’s already been done, and get eyeballs on a brand name when they can. Case in point: You said that Fidelity is doing well with this boundary-crossing content. Is it naive to think that marketers should take it upon themselves to uphold journalistic ethics, and what does that mean in the era of content marketing?

A: There’s always been that concern that things could blur, but advertising is an industry that thrives on self-regulation, and the ad industry has done a pretty good job of keeping the federal government not deeply involved in our business. There are advertising watch groups, like the National Advertising Review Board, that field the concerns of one advertiser that another is crossing a line. Granted, this is all still voluntary, but generally, it’s a process that has worked really well. I would hope that self-regulation also carries over into any new forms of communication, including native advertising, but there’s always going to be someone who tries to stretch it, and I hope those advertisers get publicly admonished, if that’s the case.

Q: What advice do you have for marketers on the ethics of native advertising? Do you see a deeper conversation taking place, with more involvement from associations like yours and high-level marketers?

A: To go along with their content strategy, more advertisers need to have an ethics strategy. More than with other types of communications, one is potentially putting the reputation of their company at risk, or in question, with native advertising. It’s imperative that marketers think about this from an ethics point of view, and do the right thing.​​

This article was originally published in the Feb. 24, 2015 issue of Marketing News Weekly.​


Author Bio:

Molly Soat
Molly Soat is a staff writer for Marketing News and Marketing News Weekly. E-mail her at msoat@ama.org.
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