Opinion: What’s the future of journalism? Sponsored content, apparently

Square is discontinuing its email service Square One at the end of June after dropping an embarrassing invitation error. The recently named “Block” store is no more. But its closure may be just a…

Opinion: What's the future of journalism? Sponsored content, apparently

Square is discontinuing its email service Square One at the end of June after dropping an embarrassing invitation error. The recently named “Block” store is no more. But its closure may be just a harbinger of a bigger company trend.

While the venerable news service Politico remains helmed by its all-powerful publisher Robert Allbritton, big news brands like the Wall Street Journal, New York Times and USA Today are embracing the corporate revenue model – letting advertisers pay to display their goods and services on their sites.

Many people consider the practice to be unseemly, because it pits commercial advertisements against editorial content, leaving the latter with less control and more potential for pestering users. The question is whether readers actually care.

In the space between traditional newsstands and online outlets, smart watches have made a rapid splash, taking advantage of new efficiencies and the end of annual contracts. Recently, Samsung announced it was adding a new “Entertainment” section that will include companies like Valve and House of Cards. Apple will be getting a division dedicated to its TV shows.

The Apple Watch stands to benefit the most from the trend. As of March, the U.S. market for smart watches had climbed to 16.3 million units, according to Strategy Analytics. Adoption in China, its largest market, is much higher. Nearly 4.1 million units were shipped there in 2017, putting the figure at 12 percent of the country’s watch market and $528 million in revenue.

So, is this future of journalism here to stay?

Nothing would be clearer than if Amazon CEO Jeff Bezos bought a broadcast station to start Amazon News. Alternatively, as CNN’s Brian Stelter wrote, PepsiCo is mulling expanding its line of snack brands to include newspapers.

The increase in advertising revenue has come from the fact that news outlets are now looking for ways to highlight what readers really care about.

“If people are coming to the sites to read about ‘U.S. News & World Report’ news, that’s not the best place to put it,” Nancy Walton, News Corp’s chief revenue officer, told Business Insider. “So there are categories that we are targeting more aggressively, whether that be working with third parties or in creating our own content.”

There are downsides to the trend, too. Brands can raise concerns about brand conflicts. Employees lose the agency that allows them to change direction in the middle of the night. Advertising by itself is problematic for news sites, with many sites’ budgets getting cut so that, in the past, entire sections of the site were shut down entirely.

The situation does echo the story of CBS, which cut some of its staff in 2011. Shortly after it was reorganized as a standalone company and under then-CEO Les Moonves, who is now president of CBS Corp., CBS’ budget seemed to be ballooning as ad revenue from their forays into “content marketing” began to rise. It became a vehicle for questionable promotions and initial coin offerings.

Were a CBS-branded Amazon News to arise, or Pepsi-sponsored Verizon’s new “video portal” Oath, should employees be concerned? Such companies would be hesitant to forge a corporate brand loyalty unless their chief executive himself publicly stated it.

If media companies do consider monetizing their readers’ news consumption, this seems to be the way to go. It won’t happen until news executives find ways to act less like news reporters and more like readers.

Erik F. Johnson is a senior associate at Atlantic Media. He is co-author of Top Down: How Power Shapes the World and How It Gets Shaped Next. He may be reached at [email protected]

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