Advertisers: It’s time to be transparent about labeling paid content

Recently, a news organization resisted more transparency in labeling paid content because it was worried about losing ad revenue.

Even though an advertiser had written entire articles, they would only mention this obliquely. Another fretted that labeling “opinion” as such was hurting their business.

These are the quite understandable — but short-sighted — protestations of an industry more worried about losing the hearts and minds of their advertisers than their own customers. Hoping to please, they cling to past practices that may seem to work but actually undermine reader trust and loyalty.

Think about it: More than half of participants in a Gallup/Knight Foundation poll in 2022 said they didn’t believe national news organizations cared about the best interests of their readers, viewers and listeners. How does that reflect on the advertisers in that space?

This isn’t an argument to dump the news. Not at all. We all know that news and advertising operate in a deeply symbiotic relationship. Advertising in trusted news sources can reach valuable customers and enjoy a “halo effect” on brand favorability. A study by MAGNA and Disney Advertising Sales identified a big boost in intention to learn more and buy when ads appear in trusted, high-quality news sites.

Trust in U.S. news actually rose 6% this year over 2022, according to the Reuters Institute. We can attribute that change to a “slight cooling in partisan rancour (CQ),” according to Reuters. But there are less transient, more important reasons: A concerted effort on the part of many news organizations to explain their fact-gathering processes, to admit their errors, to share more information about their journalists and to engage more deeply with all parts of society in their reporting. 

To clearly separate news from opinion — and from advertising.

I founded the Trust Project, which initiated many of these ideas and leads a consortium of news sites deeply committed to building audience trust. Our hundreds of news partners adhere to eight Trust Indicators on their sites and in their broadcasts. For them, transparency is a must and does not admit sleight-of-hand.

Advertising cannot be blended with news. It cannot be hidden behind fuzzy labels like “branded content” or “sponsored content.” What do those terms even mean to the public?

Typically, “sponsored” content in a news setting is written for and approved by advertisers. In contrast, a “sponsor” of a baseball game gets to put up a sign, but they don’t manage the game. A sponsor of an awards show like the Emmys benefits from the glamor and excitement, but doesn’t write the script or determine the winners.

Our news partners are clear about their funding sources. Conforming with other uses of the term, their “sponsored” content is independently produced by journalists. A sponsor pays simply to have their label displayed next to high-quality reporting on advertiser-friendly topics like food, travel or sports — not as part of a sales pitch in disguise.

They work with advertisers to label native advertising or advertorial as what it is: “paid content.” They don’t hide behind words like “branded,” “sponsored” or even “native.” Those terms are designed to elide the truth — and the public knows it.

In our research, people repeatedly say they want to know about the “agenda” behind the news. That includes any sales agenda. And once our interviewees learned what “sponsored content” really meant, some said they felt cheated and would avoid it however possible.

On the other hand, we know that transparency builds not just trust, but willingness to engage more and pay for more news. This makes sense. The eight Trust Indicators are founded upon user-centered design research and blend user needs and wants with the fundamentals of journalism. When trust in a news site is high, trust in the advertising paired with that site also grows.

Much of the global news industry has stepped up to embrace change. They are becoming more transparent in order to truly serve the public and earn trust. But they can’t do it alone. Brands must support integrity in news, and just as importantly, in the advertising that rides alongside it.

Consumers trust brands more when ads run adjacent to news. They are more likely to take action. For brands to be successful in an environment where trust is at risk, they must insist on trust-enhancing measures.

That means no more slippery labels, like “branded content” instead of clear statements that an article is promotional copy. When you “sponsor” content, let your brand enjoy the halo of a well-reported independent news story. When you want to write your own copy, insist on labeling it what it is: Paid content.

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Sally Lehrman is a Peabody award-winning journalist and founder and CEO of The Trust Project.