c.2013 New York Times News Service

c.2013 New York Times News Service

When the guy who ruined the Internet with banner ads tells you that a new kind of advertising might destroy journalism, it tends to get your attention.

That’s not entirely fair. Joe McCambley, founder of The Wonderfactory, a digital design firm, helped build the first banner ad back in 1994. It was a much-maligned innovation that grew like kudzu until it had all but overwhelmed the consumer Web, defining its look and economics for years to come.

Now the new rage is “native advertising,” which is to say advertising wearing the uniform of journalism, mimicking the storytelling aesthetic of the host site. BuzzFeed, Forbes, The Atlantic and, more recently, The New Yorker, have all developed a version of native advertising, also known as sponsored content; if you are on BuzzFeed, “World of Warcraft” might have a sponsored post on, say, 10 reasons your virtual friends are better than your real ones.

It is usually labeled advertising (sometimes clearly, sometimes not), but if the content is appealing, marketers can gain attention and engagement beyond what they might get for say, oh, a banner ad.

McCambley is wary. He says he thinks native advertising can provide value to both reader and advertiser when properly executed, but he worries that much of the current crop of these ads is doing damage to the contract between consumer and media organizations.

“I completely understand the value of native advertising,” McCambley said, “but there are a number of publishers who are allowing PR firms and advertising agencies direct access to their content management systems and allowing them to publish directly to the site. I think that is a huge mistake.

“It is a very slippery slope and could kill journalism if publishers aren’t careful,” he said.

He’s right. Publishers might build a revenue ledge through innovation of the advertising format, but the confusion that makes it work often diminishes the host publication’s credibility.

Of course, some publishers have already gone flying off the edge, most notoriously The Atlantic, which in January allowed Scientology to create a post that was of a piece with the rest of the editorial content on its site, even if it was differently labeled. They got clobbered, in part because handing the keys to the car to a controversial religion with a reputation for going after journalists was dumb.

“You are gambling with the contract you have with your readers,” McCambley said. “How do I know who made the content I am looking at and what the value of the information is?”


Given his somewhat oracular status, it comes as little surprise that when you go to visit this particular ad wizard in Manhattan, you take an elevator up to an empty entranceway with a single cord dangling from the ceiling. I eventually pulled the cord and a door opened to The Wonderfactory.

Once inside, you find out that McCambley is not some crabby editorial type putting the old gimlet eye on the necessary, but distasteful evil of advertising. All he ever wanted to do was make good content, and the banner ad is not McCambley’s only credential: The Wonderfactory has designed websites for National Geographic, Martha Stewart, Coca-Cola and The Huffington Post.


Part of his current skepticism is driven by his experience with those banner ads. Twenty years ago, most people got access to the Web through Internet service providers like Prodigy and CompuServe, which had a version of advertising but not the banners we have come to know and hate. In October 1994, HotWired, the digital version of Wired magazine, decided to create ads for the issue and AT&T opted in. The ad invited people to click through — and they did, at the astounding rate of 44 percent versus the 0.1 percent rate that is now common. Users were then transported to a list of museums around the world to show that the Web could take you places.

At the time it was unique, but as time went on the approach became ubiquitous and cheesy.

“We were proud of that ad,” McCambley said. “But everything starts out good until we end up making it bad.”

Now he is both a fan and a critic of Forbes.com, which has been at the vanguard of the native ad movement.

“What I love about Forbes is that they have the guts to take risks, to experiment, but I think some of it is dangerous,” he said. “When you go to Forbes, you expect sound business advice and news, information that has been fact-checked and vetted. But what you get instead is a mix of staff content, contributor content and sponsored content. It’s hard to know where you are.”

Lewis Dvorkin is the chief product officer of Forbes and a veteran of both traditional and digital media publications, having worked at The New York Times, Newsweek, The Wall Street Journal and AOL.

“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.”

Forbes’ BrandVoice allows advertisers to produce editorial products that reflect their best efforts to engage audiences. The content is clearly labeled advertising, but has the familiar headline, art and text configuration of an editorial work.

As a result, things can get pretty complicated pretty quickly. In addition to staff posts, the site has a roster of 1,200 contributors — consultants, academics, journalists and others — who are compensated according to the audience they attract. And then there are the posts from the marketers, with a current roster of 15 active brands.

In a sense, Forbes has come up with an oven that makes its own food — something of a grail for publishers — with abundant content for readers and all manner of marketing opportunities for advertisers. But for a brand built on getting rich and living well, the messages in this new world are very mixed: On Friday, there were the expected Apple, Dell and Google articles, but there were others about gaming, films and listicles. And once you start clicking, it’s hard to know what motives lie between the lines of what you are reading.

(This might be a good spot to mention that The New York Times has joined the fray, including embedding native advertising for Citi Bikes in an app called The Scoop.) (BEGIN OPTIONAL TRIM.)

Malcolm Forbes might not recognize this version of his magazine, but it has been a hit: Revenue from BrandVoice has doubled in the last year. Right now, Forbes can charge a premium for being a well-known brand that is an early adopter of a very sexy strategy, but the execution could dilute the power of that brand over time.

Dvorkin is quick to point out that the magazine is fresh off two prestigious Loeb awards, with magazine newsstand sales up 17 percent in the first half of the year. He suggests that the cornucopia of content is enabling, not preventing, his staff from producing sticky, credible work.


McCambley is doing his own share of work on native advertising, but said “it has to stand on its own as good journalism. Bad native advertising is destructive for the publishers that host it.”

In other words, publisher looking to save the village commons of journalism through innovation should be careful they don’t set it on fire in the process.