Sponsored content plays a sizeable role in publishers’ revenue model. According to eMarketer, ad spend on sponsored content in 2021 neared $57 billion. Advertisers find the high production quality of today’s sponsored content a compelling marketing vehicle. As a result, audiences often find it difficult to differentiate between sponsor content and actual news content. Therefore, the FTC requires publishers to label it as advertising. As the market for it grows, it’s essential to understand how the publishers’ production and reliance on sponsored content affects news content.
An advertising quandary
While sponsored content has been around a long time, it’s grown significantly in the past 10 years in the digital media sector. Marketers value the “halo effect” of a publisher’s editorial integrity offering strong reader engagement. Sponsored content is usually a narrative, which contrasts with display and video ads. It often includes custom video, interactive elements, and high-end graphic designs.
Many premium publishers have content studios dedicated to creating sponsored content. The New York Times (NYT) launched T Brand Studio, The Washington Post (WP) owns BrandStudio, and The Wall Street Journal (WSJ) has The Trust.
A recent article by Michelle Amazeen looks at how sponsored content relates to the coverage news organizations create. She explores whether sponsored content boosts or reduces the amount of media coverage for corporations that invest in it. Amazeen conducted research with Christopher Vargo, Agenda-Cutting Versus Agenda-Building: Does Sponsored Content Influence Corporate News Coverage in U.S. Media, to analyze these questions.
In a two-step process, Amazeen and Vargo identified 27 sponsored content articles in WP, the NYT, and WSJ across five years. They first scraped the content studios’ Twitter accounts to identify sponsored content links. They then used a custom Bing program to search for sponsored content links inside the news websites. The 27 sponsors include Verizon, Airbus, Volvo, American Petroleum Institute, Dow Jones, Qualcomm, Holiday Inn, Huawei, Purdue Pharma, Netflix, Gartner, Subaru, Oracle, Fox Sports, Deloitte, Walmart, Nordstrom, Allergan, Accenture, Lockheed Martin, Samsung, IBM, Wells Fargo, MetLife, Delta Air Lines, Aetna, and Starz.
The researchers then used the Global Database of Events Language and Tone (GDELT), a news article database, to match sponsored content mentions of corporations and brands to articles matching the corporate or brand sponsor. In all, they found 2,707 articles related to the companies and brands sponsoring content.
The research assessed the relationship of corporate sponsorship to news coverage of the same company across time. The analysis evaluated whether publishers filtered and shaped their news accordingly to accommodate corporate sponsorship. This practice is known as agenda setting. It refers to how the news publishers can influence which issues become the focus of public attention. In the case of sponsored content, publishers can add news coverage of a company and brand or reduce and cut their news coverage.
They divided the news articles into two segments for further analysis:
- Elite publishers (NYT, WP, and WSJ), and
- General (non-premium) news media landscape.
Omitting any seasonality mentions (i.e., earning calls), 20 of the 27 sponsored content companies showed at least one instance of agenda cutting or agenda building.
Further, of the 27 brands analyzed, only three companies showed an agenda-building effect among elite publishers: Huawei, Qualcomm, and Purdue Pharma. Amazeen and Vargo conclude that agenda building is a less likely occurrence with sponsored content companies or brands.
In addition, seven brands showed significant agenda-cutting effects among premium publishers: Netflix, Nordstrom, Starz, Wells Fargo, Aetna, Oracle, and Qualcomm. The researchers also found a significantly higher agenda-cutting effects across the entire U.S. media landscape — 14 companies and brands.
Amazeen and Vargo acknowledge that the news media is not immune to internal and external forces in their newsrooms. Publishers often set guidelines for creative and narrative executions in content studios. Amazeen and Vargo suggest publishers monitor and develop measures to assess the additional news coverage or lack of for companies and brands of sponsored content.