News Based Advertising: Ethical or Not!

Maybe you read the article that was shared on Facebook that said “10 best places to visit this summer” and maybe that article ended up influencing your choice for summer vacation destination. You may have thought that this article was written by a user or a travel enthusiast that wanted to share their experience.

In the worst case you may have thought that this article was written by a news reporter? What if I told you that this article is a part of a disturbing trend called “news based advertising” wherein corporations sponsor content that is shared with users and intended to influence their decisions. In this article we will understand more about news based advertising as well as the ethical implications that impact the issue.

The Rise of News Based Advertising

Online advertising has reached a saturation point. The situation is so severe that the pay per click model is almost irrelevant. Less than 0.2% of people that view an online advertisement actually click it. Therefore, there is a serious lack of trust between consumers that view online advertisements and companies that sponsor them. This is leading to big budgets earmarked for online advertisements going down the drain.

This sparked off a new trend. Companies like Buzzfeed have come into existence and have brought along the news based advertising model. Consumers tend to engage a lot more with such content. Not only do they read the content avidly, but they also share the content on social media giving it their stamp of approval. The method has become so effective that traditional media companies like Time Inc have also created special teams to meet the demands of their clients. Corporate behemoths like General Electric and Chevron have also been known to extensively use news based advertisements.

What is News Based Advertising ?

The simplest definition of news based advertising is that news articles actually do the work of advertisements. An advertisement is camouflaged as a news article. For instance if a company wanted to promote a brand of cereal as a healthy breakfast option, they would get an article written with the title “ 5 healthy breakfast options” wherein they would list 4 other options which are already accepted by the public and then add their brand to the list as well.

Media houses like Buzzfeed and ScoopWhoop are required to disclose that these articles are sponsored by corporations. However, the disclosure happens in a form that is not obvious and difficult to find. Hence, the law is followed in letter but not is spirit.

The Principle of Separation of News and Advertisements

Media houses have always been required to ensure that the revenue that they generate from advertisements does not impact their news reporting. News is an important part of the social fabric and it is important that the news is not polluted via corporate interests. Media houses are therefore believed to have a basic responsibility that they clearly mark their advertisements as advertisements. This will enable the user to determine what content has been genuinely reported and what content has been sponsored and therefore might have ulterior motives.

Why Editorial Independence is Important for Society ?

The trend of news based advertising is disturbing to say the least. This is because news based advertisements misuse the trust of the consumers. This is trickery to say the least. It is not long before consumers realize this and this trust gets shattered. Media houses may have to most to lose.

Consider for instance, if Volkswagen has an extremely cozy relationship with media houses. Then it can influence news reports on how its carbon emission negligence is reported! The society needs to know the full extent of negligence that has been committed by a profit mongering corporation but the same may be prevented or misdirected by news reporters because of their financial dependence on such firms.

This is one of those situations where the interests of business and the interests of society are clearly at conflict with one another. Society deserves to have an unbiased and uninfluenced reporting of the events around them. News based advertising is a deterrent to this independence. As mainstream companies are joining this trend, the future looks dangerously unstable and bleak!

Why Editorial Independence is Difficult to Protect ?

Editorial independence is difficult to protect because consumers have started expecting free stuff. Well nothing in life is free. Media houses incur production and editorial expenses that consumers are unwilling to pay. On the other hand, corporations are more than happy to pay for such expenses if media houses mix advertisements with regular news articles.

This has put pressure on all media houses. The ones that are indulging in this seemingly unethical practice are reaping financial rewards. This has made them the darling of investors on stock exchanged. The companies that still choose to be ethical are facing grim financial situations. They face the danger of hostile takeovers from other companies.

As a result, pretty much every media house is on board with news based advertising. Some are using their own brand to do so whereas others are more careful and have created subsidiaries to detach themselves from this questionable practice.


❮   Previous  Article


Authorship/Referencing - About the Author(s)

MSG team comprises experienced faculty and professionals who develop the content for the portal. We collectively refer to our team as - “MSG Experts”. To Know more, click on About Us. The use of this material is free for learning and education purpose. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url.