News Organizations Face Tricky Trade-Off With 'Sponsored Content'

[Commentary] Publishing used to be a simple -- and very profitable -- business. But with profits shrinking, the industry is getting more creative to attract marketers' dollars. And all anyone seems to want are sponsored posts.

Marketers are projected to spend $1.9 billion on sponsored content this year, up 22% from 2012, according to eMarketer. By 2017, it predicts that number will reach $3.1 billion. For marketers, the appeal is simple: Audiences understand that advertisers have a commercial relationship with a publisher. By wrapping ad messages in a format that looks like editorial content—and calling them something else, such as "sponsored" or "partner" content—they hope to trade on the trust and goodwill editorial has built up with the audience. A bit of confusion is inherent in the appeal. It's a tricky trade-off. The line between advertising and editorial is getting really blurry. Guidance could be on the way, though. The Federal Trade Commission said it would hold a workshop on native advertising in December. The agency wants a better understanding of best practices and whether consumers are able to recognize sponsored content as advertising. Until there's a standard for what goes too far, publishers are leaning on their own version of the famous Supreme Court measure for obscenity: "I know it when I see it." Occasional blunders are inevitable since even the best gut instincts have off days -- and the ultimate risk is that such moves result in an outcome that's bad not just for publishers but marketers, too: jaded, distrusting consumers.