Inside Forbes: The Role of Native Advertising in Our Search for a New Media Equation
David Carr’s weekly column for The New York Times carries an intriguing title:“The Media Equation.” With 430,000 Twitter followers, he’s a unique journalist exploring the world of media for the larger Times brand, with its 9.5 million followers. It’s similar to the 1,200 individually branded FORBES contributors — and staff reporters, too — who now write about specific business topics under our 96-year-old umbrella brand. I love the rubric attached to David’s newspaper work. FORBES itself is trying to figure out the media equation in an era when anyone can publish anytime — no trucks, planes or satellites required. Our still-evolving solution disrupts century-old newsroom thinking and processes. It also breaks with tradition in how certain marketing messages are sold and integrated on our growing news platform.
I got a call from David a few weeks ago. He wanted to know what we were up to — for his “general interest readers,” as he put it. His specific interests: our model for branded entrepreneurial, incentive-based journalism (David earns a salary at The Times) and the leadership role we play in the much-talked about world of native advertising. In reporting the story, he united two old colleagues — myself and Joe McCambley, founder of The Wonderfactory, a digital design firm. Joe and a I worked together for a time at AOL AOL +0.15%. As David told me, Joe had certain fears about native ads. Essentially, I was the counterpoint. The Times and FORBES have their own native connection. A month ago, our chief revenue officer, a strong proponent of native ads, left us to take the top advertising job at The Times.
The native ad business is quickly moving forward. At FORBES, we’re offering marketers (for a price, of course) the ability to use the same tools I do to publish content on our site, always transparently identified and labeled as marketer content. Their posts, just like mine, flow through our content management system and organically across Forbes.com (even in the Most Read module). In David’s piece last Monday, Storytelling Ads May Be Journalism’s New Peril, Joe calls this new form of marketing “a very slippery slope and could kill journalism if publishers aren’t careful.” He has a point. The Atlantic’sbout with native ads and Scientology is now legend in media circles. While on the phone, David also brought up the bugaboo of brand dilution in connection with our contributor model and our native ad business. I hear that quite a bit.
Joe’s concerns shouldn’t be dismissed. Native ad solutions must be carefully thought out and methodically implemented. We’ve worked hard to do both. BrandVoice (once called AdVoice) first launched on Forbes.com in November 2010 (SAP, the giant software enterprise, was our first client and remains one). The idea is actually two years older than that, first developed at the news startup I founded (we called it Ad/Slant back then). FORBES was an investor and then bought us. It all started with a core philosophy — “content is content” and transparency must rule. Next, we built the digital publishing tools and the technology platform. After that, came workflow processes and internal communication. Now, we’ve got a “brand newsroom” with many of the same skills as our editorial newsroom to assist BrandVoice partners. It reports directly to the sales department. Throughout, we paid close attention to marketplace feedback and stuck to our basic principles, realizing there’s plenty of room for improvement.
If process is critical, so is quality and site relevance. The Forbes.com audience has come to expect information, analysis and perspective on a wide range of business topics. That includes technology, investing, entrepreneurship, leadership, lists and our unparalleled coverage of wealth creation. Our staff reporters and a growing array of topic experts provide such coverage. With all that, getting marketplace insights from companies that know their industries first hand isn’t a disconnect for our readers, as long as it all carries the proper labeling. Today’s sophisticated readers are quite able to sift through the discussion. We now have 15 live digital BrandVoice partners. IBM IBM -0.42%, Xerox XRX -0.58% and EY (Ernst & Young) are among the biggest newcomers. Eleven more BrandVoice partners will be up and running in the fourth quarter, including Siemens SI-0.85%, United Airlines and PTC, a big technology solutions company. BrandVoice partners will account for 20% of total advertising revenues this year, up from 10% last year.
Those of us who follow the ins-and-outs of native advertising have other concerns. Mark Howard, our chief revenue officer, is particularly focused on the rise of native ad networks. Much like display ad networks, they’re in the business of scale — and offering solutions to publishers who, unlike FORBES, haven’t done the hard work to build the tools, platform and processes. In effect, native networks go over to top of site’s CMS to drop native ads onto pages. That typically makes them more a promotion that links off to a micro site or a cordoned off area within the host site. It’s a bit complicated, but it means this: the NAN solution will likely be less organic to a site experience, not as discoverable and probably not very social.
Increasingly, native networks will marry marketers who need writing assistance with content producers, then promote the result across hundreds if not thousands of sites. Mark is worried that the native ad networks will “flood edit streams with links to content not necessarily intended for that host site’s audience.” The industry, he says, “is moving toward commoditizing its most premium product in years before it’s even able to prove out its true value to marketers.”
As for David’s warnings of brand dilution, FORBES has actually extended its brand. Our carefully curated network of 1,200 writers now accounts for 300 to 400 posts a day, sharing our message of entrepreneurial capitalism across the social Web. In fact, our nearly 100-year-old vision is perhaps more in sync then ever with today’s innovators and disruptors. As David quoted me in his story:
“I believe that people gravitate toward content they trust and over the last three years, according to comScore, our audience has grown from 12 million unique users to 25 million,” he said. “We have very high standards and we spend a lot of time vetting our contributors and making sure that our marketers put real effort into what they put on the site, and understand the importance of coming up with accurate, useful information.”
The numbers tell a three-year story of brand awareness and loyalty . Our digital audience has grown nearly 250% over three years. We now have 2 million Twitter followers, up from 150,000 in 2010 and 950,000 only a year ago. Single copy sales of FORBES magazine rose 17.5% in the first half of 2013 from a year earlier (source: Alliance for Audited Media), bucking an industry trend (see table). Total circulation (single copy sales plus subscribers) was up 1%, compared with a category decline of 0.7%. Excluding The Economist, subscribers paid more, on average, for a FORBES subscription than for competitors (123% more than Fortune, our closest competitor). Total readership is 5.1 million, one million more than our closest competitor.
I try to watch my area of the media landscape as closely as David does his. In the last months and years, brand dilution might be a more apt discussion with regard to the combination of Newsweek and The Daily Beast. What does either brand mean today? Putting the Bloomberg name, one deeply associated with trading terminals and Wall Street, on BusinessWeek, a kind of general-interest business magazine, seems to cause its own consumer confusion, at least when measured by certain print and digital performance numbers.
Solving today’s media equation requires vastly different organizational sensibilities. Arthur Sulzberger, the owner and publisher of The New York Times, got my attention during a recent event at Harvard for Riptide, a Shorenstein Center project that’s an “oral history” of journalism in the Internet era. He was asked what arriving journalists at The Times should do. “Sit down and talk to an engineer, ” he said. That’s a great start. At FORBES, it’s far more than that. Across all our departments, we’re collaborating to put together the elements with a single goal in mind — to build a sustainable model for ad-supported journalism in the era of digital media.
A three-year magazine cover strategy focused on the people making a difference delivers our nearly 100-year-old brand message of entrepreneurial capitalism. Here’s a link to all those cover packages from one screen.