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Calls for regulation on ‘wild west’ native advertising to give publishers and marketers boundaries

Native advertising is like the “wild west” at the moment and publishers and marketers need to agree a set of rules on how it should be presented so publishers can retain readers’ trust but use the increasingly important revenue source, according to the content director of the Sound Alliance.

The practice of native advertising, placing content created on behalf of a brand by journalists from a masthead on a certain topic in an editorial environment, has come under fire in recent days after satirist John Oliver attacked it on US show Last Week Tonight, labelling it “repurposed bovine waste”. Some claim the practice will lead to a reduction of trust from readers for mastheads, as publishers look to it to boost struggling digital revenues.

During a hangout yesterday Tim Duggan of the Sound Alliance admitted that despite native ads not existing 18 months ago, they now account for 25 per cent of the company’s revenue, but warned: “Because this is such a new area there are no set rules at the moment. Every publisher is figuring it out. Some are doing the wrong thing, some are doing the right thing. As a media community we need to figure out what these rules are.”

His calls for a code were echoed by Media Watch host and veteran journalist Paul Barry who added: “I think it would help to have a set of guidelines because that would strengthen the publishers against pressure from the advertisers if they feel they need it, and I think they probably do.”

Another panelist on the hangout which was moderated by Mumbrella editor Alex Hayes, strategist Rachael Lonergan of Foundation, said clients were seeing higher returns on native advertising than banner ads according to studies, adding: “The onus is on the publishers to make clear that they accepted dollars for the content that they publish.

“I would say to publishers that if they are concerned about crossing those boundaries then you have the opportunity to say no and to set those boundaries really clearly.”

Barry said whilst native content on something like a theme park was “fine” there were “more concerning” examples emerging like some mastheads carrying native content about financial advice, adding: “It’s much more dangerous when it get into that area and people are basically spruiking financial products and not disclosing them.”

Explaining how Sound Alliance, which owns a number of youth-oriented websites including Junkee, Faster Louder and Same Same, goes about producing native content Duggan said it has a ten stage process, but said they are fussy about what goes up, and can pull the plug at any time if they, or the client, are unhappy with it.

“Native advertising was quite an experiment for us and I have been pleasantly surprised by the fact that our audience has taken to native just the same way it takes to a normal piece of content,” he added. “Our audience doesn’t seem to be mind that it has been funded by a brand.”

The group has created around 300 pieces of native content so far, and pays more to its in-house content producers and contributors to do it.

Duggan said: “What we found when we first introduced native was there was a core group of contributors  who were saying sure I’ll do it for a little bit of the extra money, and what we found now is almost the majority of our writers come to us asking us is there any more of this native stuff. The reason is because it is well paid.

“We can afford to pay better for the native content. And our writers are not pure journalists in a sense. We are an entertainment publisher….so we are not hard hitting journalists but we still uphold some of those journalistic ideals.”

However, Barry warned the pressure being put on journalists to create brand content could well impair their ability to be impartial when writing news items on a brand: “People who go through journalism school these days know they are going into an industry where jobs are pretty hard to come by.

“It’s like the porn industry because there’s a lot of people on the internet who will do it for a lot less or free. That is journalism’s problem. It’s not so much that there aren’t a variety of voices it’s just that is hard to get a decent wage, particularly for photographers.

“If native advertising was the saviour and was bringing in massive amounts of money to all these websites then perhaps it would be worth considering whether it would be worth losing the reputation. But what some critics have said, and I agree with them, is that you’re selling your reputation but you are not getting much back in return and that’s the problem. It’s an unequal bargain.”

Lonergan said consumers might well accept native ads in sections like lifestyle and travel of news sites more than in the homepage feed. But she warned: “If they can’t figure out how to do native well so that it satisfied the readers, the industry and the ethical situation then they have to figure out how to get revenue from somewhere.

“There is a huge dilemma facing publishers of online content. They are public companies and need to pay shareholders a dividend. If they can’t make money from native because we consider it to be unethical, the danger is that we have is that these publishers may disappear altogether.”

John Oliver’s take on native advertising: 

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