Plans to “Monetize” News Content Raise Ethics Concerns

As news organizations seek innovative ways to boost slumping advertising revenue, journalists and commentators have spoken out when they believe the new advertising and content sponsorship plans cross ethical lines.

Memphis Commercial Appeal Scuttles Sponsorship Plan after Reporters Speak Out

In October 2007, The (Memphis, Tenn.) Commercial Appeal backed off a plan to “monetize” some of its print content when reporters there objected to a plan to have Memphis-based international trade and transportation corporation FedEx sponsor a six-story series about the city’s international business and cultural links. The series ran from Nov. 25, 2007 to Dec. 30, 2007 and is available online at http://www.commercialappeal.com/world/.

According to an October 18 story in Editor & Publisher magazine, the “Memphis and the World” series included a report on FedEx’s business relationship with China, and the sponsorship deal drew complaints from newsroom staff over independence and conflicts of interest, resulting in the plan being dropped. Commercial Appeal editor Chris Peck told Editor & Publisher, “I went to our publisher and said we have probably gone half a step more than we should have gone on this project ... . It is treacherous ground when you start talking about having an advertiser in a section that has them in the reporting.”

An October 17 story in the Memphis Flyer, a local alternative weekly paper, said the series’ writer Trevor Aaronson and editor Louis Graham both expressed concerns about the plan to have FedEx sponsor the project, and “as many as 50 newsroom employees signed a petition expressing their concerns about sponsored stories.”

The Flyer reported that The Commercial Appeal contacted the Poynter Institute, a journalism school and think tank in St. Petersburg, Fla., for input. The Flyer reported that although Poynter kept its input on the matter confidential, sources at The Commercial Appeal reported that Poynter consultants Butch Ward and Bob Steele “sided with the employees who objected.” Steele is also a member of the Silha Center Advisory Board.

According to the Flyer, a memo dated Sept. 25, 2007 was circulated at The Commercial Appeal, which reported “good success” from ongoing newsroom, marketing, and advertising department strategies to grow ad revenue through “monetizing” content. The memo announced plans to “accelerate” those efforts, saying the departments recognized “challenges” raised in a “new world of newspaper survival” where “no longer are there thick, impenetrable walls between the newsroom, advertising and circulation departments.” The memo included “guidelines” designed to “avoid damaging our credibility and our business.”

The blog Smart City Memphis, posted by a local consulting firm with the same name, reported October 16 that according to “one popular version of the sequence of events” in the Commercial Appeal newsroom, Peck was not pleased with the content of Aaronson’s story about FedEx, which he considered “less than flattering.” The blog reported that Peck asked Aaronson to “fix the copy,” telling him “to write the kind of copy on which the sponsor would look more kindly,” and Aaronson refused.

In a letter to Jim Romenesko’s media business and ethics blog on the Poynter Web site, Commercial Appeal Managing Editor Scott Sines said the Smart City Memphis account was “riddled with errors.”

“The conversations about the propriety of the ads took place before [Aaronson] wrote the stories,” Sines said. “The assertion that Peck called staff in to ‘fix the copy’ is flat wrong because the stories didn’t exist.”

Until the FedEx sponsorship controversy, the most visible “monetized” content in The Commercial Appeal, according to the Flyer, had been a commercial real estate column in the Sunday edition called Done Deals, above which appeared the words “sponsored by” and a small logo for Boyle Investment Company. The Flyer reported that the sponsored Done Deals columns had appeared for two weeks prior to the FedEx controversy.

On October 19, a Society of Professional Journalists (SPJ) press release commended Commercial Appeal newsroom employees whose protest of the FedEx sponsorship plan resulted in the newspaper abandoning it.

“I cringed when I read about an editor’s interest in ‘monetizing content,’ a phrase that needs a wall right in the middle of it,” SPJ Ethics Committee Chairman Andy Schotz said. “Outsiders’ money should not be involved in the news process.”

An October 20 column by Salt Lake Tribune reader advocate Connie Coyne said The Commercial Appeal’s plan went too far beyond “advertorial supplements,” the special advertising sections many newspapers publish which feature articles about companies that are not written by the newspaper’s reportorial staff.

“Much of the information in such sections can be helpful to readers who are interested in preparing for weddings or remodeling their homes. But … most readers are savvy enough to understand that the information in the supplements is not written by the newspaper’s reportorial staff,” Coyne wrote.

Coyne said the FedEx-sponsored series in The Commercial Appeal blurred the otherwise clear line between paid-for content and independent reporting from the newsroom.

“If the trust relationship between the paper and the reader is broken, then the newspaper loses its ability to serve that reader. Memphis editors forgot that,” Coyne wrote.

Tim McGuire, the Frank Russell Chair for the business of journalism at Arizona State University’s Walter Cronkite School of Journalism and Mass Communications, wrote about The Commercial Appeal’s plan at his blog, McGuire on Media. McGuire said that the plan failed an ethics test because it did not maintain the newspaper’s independence, either in fact or in appearance.

“Even if we convince ourselves the payment we received for that story does not compromise our independence because we are high-minded, pure as the driven snow and impervious to any sort of corruption, our readers still have to be convinced,” McGuire wrote. “Will [Commercial Appeal] readers believe that a story about [FedEx’s] interaction with China which they PAID for is a straight, honest account? No way.”

Questions over Links to Ads in Online Text

In early November McGuire also reported in his blog on a local Arizona news organization’s use of links in the text of news stories on its Web site to advertising.

According to a Nov. 2, 2007 blog post by McGuire, the (Phoenix) Arizona Republic’s AZ Central.com now links certain words in stories in the Sports, Business, Entertainment, Travel, and Home sections to ads. When the cursor hovers over the double-underlined words in a story, pop-up advertisements appear featuring links to companies. For example, in a Jan. 20, 2008 Associated Press story on AZ Central.com about a proposed federal tax rebate, the words “credit-card debt” linked to an ad for Countrywide home loans, and the word “tax” linked to an ad for H&R Block tax services.

According to McGuire, The Atlanta Journal-Constitution, Reno (Nev.) Gazette-Journal, and Indianapolis Star newspapers also use an in-text advertising tool on their Web sites. A Nov. 27, 2006 Wall Street Journal story cited by McGuire reported that mainstream news Web sites for Fox News and Popular Mechanics magazine were also using the service.

According to The Wall Street Journal, there are several online-ad brokers, including Vibrant Media Inc., Kontera Technologies Inc., and MIVA Inc. Advertisers pay either a fixed price to have their ads linked to specific keywords or bid against other advertisers in an auction. The ads generally run on a variety of sites, and advertisers pay only when users click on the ads.

According to McGuire’s Nov. 2, 2007 blog post, Michael Coleman, Vice-President of Digital Media for AZ Central.com, said the contract between AZ Central.com and Vibrant Media provides that AZ Central.com cannot sell advertising for the Web site. The process is entirely automated; Vibrant Media’s computer constantly scans the text and conceptually matches words. No more than three words per story can be linked to ads.

According to McGuire’s blog and The Wall Street Journal, spokespeople for AZ Central.com, Popular Mechanics, and The Atlanta Journal-Constitution say they have received no negative feedback about the ads from visitors to their Web sites. AZ Central.com’s Coleman, and Hyde Post, vice president for the Internet at The Atlanta Journal-Constitution said the Web sites restrict the ads to “soft” news sections like sports and entertainment.

“We want to test the waters on other stories before we do anything to embarrass ourselves or cause integrity problems,” Coleman said.

The Wall Street Journal reported Nov. 27, 2006 that some odd juxtapositions between ads and stories have raised eyebrows. In September 2006, an ad for Target appeared in an Associated Press story on The Atlanta Journal-Constitution’s Web site about the death of celebrity Anna Nicole Smith’s 20-year-old son. When the cursor was placed over the double-underlined name “Anna Nicole Smith,” an ad with the words “Shop for Smiths. Save 10% to 20% online at Target.com” appeared. According to The Wall Street Journal, the ad was removed after about three hours. A screen capture of the ad can be viewed at http://www.adrants.com/images/smiths_for_sale.jpg. In part because of the mishap, The Wall Street Journal said Target stopped buying in-text ads.

According to The Wall Street Journal, some news organizations were uncomfortable with the idea of ads being linked to the text of editorial content. Forbes.com decided not to use the in-text ads after experimenting with them in the summer and fall of 2004, in part because reporters complained. For the Nov. 27, 2006 story, a spokeswoman for The Wall Street Journal said in-text ads will not appear on that newspaper’s Web site because the ads “blur the line between advertising and editorial and ‘interrupt the reader’s experience.’”

Poynter’s Bob Steele told The Wall Street Journal that the in-text advertising trend is “ethically problematic at the least and potentially quite corrosive of journalistic quality and credibility.”

In a Nov. 7, 2007 blog post, McGuire said that although he understands that the newspaper business is facing profound challenges as a money-making venture in the digital age, in-text advertising is “a terrible mistake.”

McGuire said the separation between advertising and reporting remains key to the credibility of news organizations. “[In-text advertising] will weaken and cheapen newspapers’ effort to serve advertisers, and it will break any bonds of trust between newspaper and reader that might still exist,” McGuire said.

Eau Claire, Wis. TV News Director Quits over Exclusive Source Deal

An ethics disagreement over a proposed exclusivity deal with a local hospital led to the resignation of the news director of WEAU TV-13 in Eau Claire, Wis.

The Eau Claire Leader-Telegram reported Jan. 15, 2008 that according to WEAU news director Glen Mabie and other sources, station management had attempted to negotiate a deal with local Sacred Heart Hospital in which WEAU would run medical stories featuring personnel from that hospital and its affiliates, but not employees of other area hospitals or clinics. According to the Leader-Telegram, Mabie said he was unsure whether the hospital would pay WEAU as part of the agreement.

Mabie, whose last day was January 11, said “my problem with this is it was going to dictate newsroom content. I told myself that I could not with a clear conscience go into that newsroom and tell the staff that this was a good thing.”

The Leader-Telegram reported that “several sources said the company decided not to proceed with the agreement,” but WEAU Vice President and General Manager Terry McHugh declined to comment on any proposed agreement with the hospital, and Sacred Heart Hospital Regional Director for Marketing and Communications Becky Swanson said she was not aware of an exclusivity agreement with WEAU.

According to Gary Schwitzer, a professor of mass media ethics at the University of Minnesota and publisher of “Health News Review,” a Web site which reviews the quality of health news in mainstream media, exclusivity agreements between news organizations and health care providers are “disturbingly” common.

“It is faux news – paid-for news with no disclosure to an unwitting audience,” Schwitzer said. “Most people just don’t understand how conflicted most of the health care news and information they receive really is.”

David Gordon, professor emeritus of journalism at the University of Wisconsin-Eau Claire, told the Leader-Telegram for a January 16 editorial column by editor Tom Giffey that the appearance of undue influence on news judgment “just destroys the credibility of the newsroom.”

“It’s a question of who calls the shots, and if you have an agreement that you can’t report on other hospitals in the area … [then health coverage is] not news; that’s advertising being passed off as news,” Gordon said.

– Patrick File
Silha Fellow and Bulletin Editor

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