Wednesday, October 17, 2007

"Monetizing Content" at The Commercial Appeal

News meets NASCAR as sponsors gain foothold at the CA.

Posted by on Wed, Oct 17, 2007 at 4:00 AM

It started with two little words: "sponsored by."

Those words appeared in tiny type above a small Boyle Investment Company logo and a collection of short news items about commercial real estate in the Sunday business section of The Commercial Appeal two weeks ago. The column is called "Done Deals." Many readers probably paid little or no attention to the sponsorship. But the issue of sponsored news, or "monetizing content" as the CA calls it, is sending a shock wave through the newsroom at 495 Union.

Sources at the CA say sponsorship of an upcoming series of stories about Memphis and world business was scratched after the writer, editor, and other reporters objected. A staff meeting was scheduled for Wednesday, October 17th.

The reporter, Trevor Aaronson, and the editor, Louis Graham, declined to comment. Flyer sources said as many as 50 newsroom employees signed a petition expressing their concerns about sponsored stories. The story is about business in China and was to be sponsored by FedEx.

CA editor Chris Peck declined to comment about the FedEx sponsorship or the series, which has not yet been published. He did comment about "Done Deals" and the general issue of sponsored news.

"The Commercial Appeal, like most newspapers these days, is looking for ways to monetize content," Peck wrote in an e-mail. "This is part of the new business model that will support journalism in the future. The Web is way ahead of newspapers on this. Online, many ads already are linked directly to particular content."

Peck said there was no expectation by Boyle or the CA that the sponsorship would influence content. "Advertisers clearly understand the value of having their paid messages associated with independently reported, relevant content," Peck wrote. Some newsroom employees apparently do not share that view.

Flyer sources say Peck, Graham, and Aaronson had what is sometimes called a "frank exchange of views" about the proposed sponsorship of Aaronson's series, which involved considerable investment in time and travel expenses by the newspaper. Representatives of the Poynter Institute, a journalism school and resource center in Florida, were called in.

"Two of us on the Poynter faculty, myself and Butch Ward, have had telephone conversations with individuals at The Commercial Appeal," said Bob Steele of Poynter. "We play this role as a guide on ethics issues hundreds of times every year."

Poynter's input was confidential, Steele said. Flyer sources say Poynter sided with the employees who objected.

Three weeks ago Peck and Rob Jiranek, vice president of sales and strategic planning, sent employees a three-page letter on "monetizing content guidelines." The main message was that "we are in a new world of newspaper survival" and looking for ways to "attach ads in print and online to specific stories, features, and sections." The memo said "no longer are there thick, impenetrable walls between the newsroom, advertising, and circulation departments."

"Survival" apparently means big profits. The Commercial Appeal is owned by E.W. Scripps, a publicly traded media company based in Cincinnati. In 2006, its newspaper division, with papers in 17 markets, earned $196 million on revenue of $717 million, for a profit margin of 27 percent. The CA's share of that was not disclosed. On Tuesday, Scripps announced that it is splitting into two separate companies, one focused on lifestyle media, such as HGTV, and the other on local newspapers and television stations.

"The proposed separation is not expected to have a material effect on the day-to-day lives of employees," the company said.

Sponsorship is a relatively new wrinkle in a murky area that includes "special sponsored sections” and “advertorials," or text-heavy advertisements that look like news stories. Such sections have long been a staple of business at the Flyer, Memphis magazine, and national publications. Targeted ad placement, where an ad appears near or next to a particular story or type of story, is also commonplace.

But most newspapers maintain separate advertising and editorial staffs. That is sometimes referred to as a mythical "10-foot wall." Advertisers, of course, are free to complain about sensitive stories, and they sometimes withdraw ads. Sponsorship of specific news reports goes back at least to the 1950s when Gillette and Camel cigarettes were big on sports. The Philadelphia Inquirer has a business feature sponsored by a bank.

Most reporters, however, are comfortable with their employer being sponsored by a collection of advertisers but not their specific reports or stories. Many newspapers, including the CA and the Flyer, are quite strict about what perks their reporters can accept. Bob Levey, a former columnist for The Washington Post who holds the Hardin Chair of Excellence in Journalism at The University of Memphis, said, "News columns should never be for sale or for lease."

Internal CA Monetization Memo

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