Tuesday, November 08, 2005

Cracks in the Wall Between Advertising and News

Cracks in the Wall Between Advertising and News

WEAK advertising demand and higher costs are squeezing most newspapers these days. The New York Times Company's sharp drop in third-quarter earnings and its plan to eliminate hundreds of jobs provide ample evidence of the revenue-cost pinch at this paper's corporate parent.

The search for revenue, not surprisingly, means the advertising staff of The Times is scrambling ever harder to come up with attractive new options for advertisers. Sometimes that can lead to pressures to let advertisers tie their pitches more closely to the credibility of the news columns. And that can blur the distinction between advertising and articles - risking erosion of the readers' right to assume that the news columns are pure journalism, both in print and online.

Why is the line between news and advertising so important? I hold to the traditional view, that readers trust a paper more when there's a clear separation. Advertisers are attracted to readers who trust what's in the news columns. And the resulting revenue enables the newspaper to keep providing high-quality journalism.

Advertising, of course, is the major source of revenue for newspapers. Although The Times doesn't break out the numbers, advertising appears to account for about twice as much revenue as circulation does.

The sky isn't falling at The Times. But I see a few worrisome indications that advertisers are being allowed to tap into the credibility of the news columns in ways that slip over the line.

It would be difficult to find a clearer example of the mingling of real news and advertising than the "watermark" ads The Times started offering in late September. Advertising images are printed faintly underneath a full page of stock-price quotations, with a conventional ad stripped across the bottom. There is little distinction left between news and advertising in the ads, which many editors refer to as "shadow" ads.

Prudential Financial's well-known rock logo showed up underneath a full page of stock and mutual fund quotations in one of the early watermark ads in The Times on Oct. 6. It was especially hard to miss for any reader seeking information on that page. And if you happened to be a Citigroup shareholder checking the price of your stock, you would have found it buried in the middle of a competitor's logo.

"Our new branded watermark unit reflects The Times's ongoing commitment to deliver high impact advertising opportunities and value to our customers," Jyll F. Holzman, the senior vice president of advertising, said in announcing the offering last month. Three of the ads - priced at $41,850 each on the paper's rate card - have appeared so far, and several are already scheduled to run each month through January. A comparable regular full-page ad in the Business Day section costs about $119,000.

The Times's limits on the use of the watermark ads ease my mind a bit. Among them: only one ad per day, and only on a page in the Business Day section devoted entirely to tabular information. But I worry about the proverbial camel's nose as I read in the American Society of Newspaper Editors magazine that The Philadelphia Inquirer has decided to accept shadow ads behind sports statistics and movie directories as well as financial tables. And The Times's move seems likely to embolden more newspapers to decide it must be O.K.

Before The Times takes watermark ad reservations beyond next year's first quarter, I hope senior editors and advertising executives review the effect on both readers and advertisers. If any signs emerge that reader perceptions of the independence of the news columns are being eroded, I hope alarms would go off in the newsroom at least. And I certainly intend to be watching.

In the online world, the relationship between journalism and advertising deserves special scrutiny because the foundation is being laid for the way news will be delivered far into the future. That's one reason I'm concerned by ads on nytimes.com that are built around or include "A Sponsored Archive" of articles from The Times. I fear readers accustomed to seeing lists of related articles on the news pages of nytimes.com will think these sponsored archives also reflect the newsroom's judgment.

One of the key features of nytimes.com is the editors' ability to offer readers easy links to earlier articles that can provide valuable perspective with just a couple of clicks. Typically, these have been carefully chosen to round out the current day's articles.

But the sponsored archives of Times articles in the online ads haven't been selected by anyone in the newsroom. Rather, the articles in sponsored archives are chosen by the advertiser or someone it hires to handle the task. And that is not always made clear enough.

One such ad for a pharmaceutical company earlier this year, for example, offered an archive of Times articles related to health and cholesterol. While I couldn't see that discontinued ad's archive, I think there's little chance that readers using it would have found any unfavorable articles about the advertiser or its products.

In at least one recent ad, I found the disclaimer about the selection of the sponsored archive so tiny as to be barely readable on the screen: "The editorial staff of The New York Times was not involved in the production of this feature." Responding to my query about the readability of the disclaimer, a spokeswoman for nytimes.com assured me in an e-mail message Wednesday that changes would be made. "We will highlight the disclosure further to avoid any confusion by users," she wrote.

Finally, there's the cat-and-mouse routine that has been going on between news and advertising staffs at newspapers as long as I can remember. There are almost always some advertisers interested in buying an ad designed to look like a news page, and their clout increases when demand is slow. The basic idea is to lure readers to an ad that seems at first glance to be just another news article.

The Times has detailed rules for such potentially confusing ads that are enforced by the two-person office of advertising acceptability, often in consultation with the paper's standards editor, Allan M. Siegal. To help alert readers to an ad that looks too much like a news presentation, for instance, the word "Advertisement" must run at the top.

But there was no such label on a full-page ad in a September issue of the Book Review section that was made to look like a review of a book of poetry. And when I looked back over 2005, I found other text-laden full-page ads from a different advertiser in the Book Review section that also lacked the label.

It turns out the poetry-book ad had slipped past the office of advertising acceptability. But Mr. Siegal had spotted the ad in the paper and reminded those involved of the rules by the time I queried him about it. The most recent text-laden Book Review ad I checked had the word "Advertisement" twice at the top.

That heartening development in the effort to maintain the bright line between news and ads is quickly overtaken, however, by a disheartening one: half of the advertising acceptability staff will likely disappear in the current round of job cuts.

The public editor serves as the readers' representative. His opinions and conclusions are his own. His column appears at least twice monthly in this section.