A threat to journalism? How journalists and advertising sales managers in news organizations perceive and cope with native advertising

Native advertising and the business of news in the digital age

Since the beginning of the 21^st century, digitization has changed professional journalism in many ways. One of the most drastic transformations concerns the financing of online news. Due to the effects of digitization on media use and news consumption, the revenue streams in news organizations’ traditional business models are continuously drying up (Matteo and Dal Zotto, 2015). On the one hand, the advertising business has largely shifted from offline media to the Internet, where news organizations have to compete with other website owners for advertisers’ attention (Kleis Nielsen, 2016). Consequently, prices for conventional online advertising are continuously declining as is the revenue that news organizations earn from selling advertising space (Kleis Nielsen, 2016; Picard, 2000). On the other hand, news organizations struggle in generating revenue from selling online news. Many users still expect to have access to online news not only at any time but also at low or no cost (Chyi, 2012; Fletcher and Nielsen, 2017).

Searching for more profitable business models, news organizations began to focus on the production and distribution of alternative advertising formats, such as native advertising (Matteo and Dal Zotto, 2015; Wojdynski, 2019). Native advertising characteristically adapts to the layout and style of the media environment in which it appears. In the context of news websites, native advertising accordingly appears as journalistic news although ultimately it is advertising (Beckert et al., 2020, 2021; Ferrer Conill, 2016). Compared with conventional display and banner advertising, native advertising provides informative content that attracts users’ attention and does not disrupt the user experience (Tutaj and Van Reijmersdal, 2012). Additionally, chances for advertising contacts increase with native advertising because ad blockers respond less sensitively to such advertisements (Campos-Freire et al., 2016). With regard to advertisers’ persuasion objectives, native advertising can thus be considered more valuable and effective compared with traditional online advertising. News organizations, in turn, can charge higher prices for native advertising, generating more advertising revenue (Campbell and Marks, 2015; Matteo and Dal Zotto, 2015).

Although traditional business models built on both journalistic and advertising sales, both areas were strictly separated within news organizations through a metaphorical Chinese Wall (Lauerer, 2019). Newsrooms were responsible for news production, while advertising departments were responsible for managing the sales of advertising space in news media. Native advertising, however, permeates this metaphoric wall by blending news functions and business functions of news organizations (Carlson, 2015; Coddington, 2015). Advertising departments are no longer only responsible for selling advertising space, but also for producing native advertising. Moreover, the production process of native advertising often includes newsroom journalists to give the content the look-and-feel of the media environment. Journalists are thus taking over the work of advertisers or ASMs (Li, 2019; Matteo and Dal Zotto, 2015).

Native advertising and journalism ethics

Needless to say, this intermingling of journalism and advertising also has its downsides. Most seriously, native advertising violates fundamental norms of journalism ethics (Carlson, 2015; Han et al., 2018; Schauster et al., 2016). In general, journalism ethics defines norms that guide the actions of news organizations and journalists in the light of their role in society (Ward, 2019). A set of norms that is guiding news journalism for decades is defined in the Social Responsibility Theory (Peterson, 1984). Accordingly, news journalism should, for example, provide information for political debate and public enlightenment, and function as a watchdog that safeguards individual rights against the government. To fulfill this social responsibility, the information provided must be credible in the eyes of recipients, which usually requires objectivity, neutrality, and truthfulness in news coverage (Deuze, 2005; Ward, 2019).

The practice of native advertising conflicts with journalisms’ social responsibility (Han et al., 2018; Schauster et al., 2016). First, native advertising is deceptive, as its effectiveness grounds in the disguise of the commercial intent (Schauster et al., 2016). Second, the information provided in native advertising is not objective and neutral because it reflects advertiser interests. Native advertising can neither be truthful as long its commercial nature is in disguise. Third, even when recipients recognize the commercial character of native advertising, they may feel deceived and devaluate the credibility of the information provided (Wojdynski, 2016). Consequently, publishers can suffer reputational damage and a loss of credibility (Amazeen and Muddiman, 2018).

In sum, native advertising is a controversial issue for news organizations that is associated with economic benefits but also tainted by ethical and normative concerns. This controversy is reflected in the perception of opportunities and risks in the organizational units involved in the production of native advertising (i.e., advertising departments and newsrooms). Given the ethical standards and social responsibility of journalism, risks of norm violation and ethical concerns should dominate perceptions of native advertising in newsrooms (Schauster et al., 2016). In contrast, given their economic function in news organizations, perceptions of native advertising in advertising departments should be dominated by the opportunity to generate revenue (Li, 2019). Findings by Goodlad et al. (1997) and by Schauster et al. (2016), however, suggest that journalists also acknowledge the financial dilemma of news organizations, as well as the opportunities offered by native advertising. This results in ambiguous perceptions of native advertising as a “necessary evil” (Schauster et al., 2016: 1416) or a “last resort” (Goodlad et al., 1997: 81). Similarly, it is conceivable that ASMs acknowledge the normative risks that native advertising poses in terms of journalistic standards and user deception. This background prompted the following research question:

RQ 1: What are the perceptions of opportunities and risks associated with native advertising in newsrooms and advertising departments of news organizations?

The deceptive potential and unethical character of native advertising is widely discussed in research and practice (Schauster et al., 2016). Nevertheless, native advertising has become an integral part of the working routines of many journalists and ASMs in news organizations. The question of how they actually cope with ethical concerns in their everyday work remains unanswered. In a qualitative survey by Goodlad et al. (1997), ASMs did not express any ethical concerns about editorial-like advertising. When confronted with this issue by the researchers, they disputed the risk of audience deception, arguing that readers’ advertising literacy is sufficient to distinguish between editorial-like advertising and journalistic content. However, ASMs have been found to agree that unethical practices should be avoided to protect the reputation and credibility of news organizations (An and Bergen, 2007; Goodlad et al., 1997; Lauerer, 2019; Li, 2019). These findings refer mainly to editorial-like advertising in print media, but native advertising in digital media offers a broader variety of visual and audiovisual designs and thus more options to disguise its commercial character. Journalists and ASMs working on native advertising might therefore cope differently with ethical concerns compared with these previous findings.

RQ 2: How do journalists and ASMs in news organizations cope with ethical concerns related to native advertising?

Advertising influence in news organizations

Journalists’ involvement in producing native advertising creates room for advertising influence on news production and may restrict journalistic autonomy in news organizations (Lauerer, 2019; Matteo and Dal Zotto, 2015). Journalistic autonomy is an ideal state. Social Responsibility Theory, for example, demands journalism to be “free from the pressures of special interests” from politicians or advertisers (Peterson, 1984: 74; Ward, 2019). In practice, however, news production is subject to various constraints and affected by political, economic or professional influences (Hanitzsch et al., 2010). According to the Hierarchy of Influences Model (Shoemaker & Reese, 1996), these influences are located, for example, at the individual level (e.g., journalists’ individual predispositions), the organizational level (e.g., occupational routines, organizational structures), or the extra-media level (e.g., political actors, advertisers, public relations managers) (Reese, 2001; Shoemaker & Reese, 1996).

Advertising is an economic influence on news production that is primarily located at the extra-media level (Nyilasy & Reid, 2011). However, advertising influence can also occur at the organizational level. For example, Hanusch et al. (2017) found that advertisers often attempt to wield indirect influence on journalists via news organizations’ advertising departments. In line, Soley and Craig (1992) showed that more than half of the surveyed newspaper journalists regularly felt “pressure from within their newspapers to write stories to please advertisers” (Soley & Craig, 1992: 7). The impact of advertising influence on news production within news organizations is primarily reflected in the relationship between newsroom journalists and ASMs (Lauerer, 2018). As outlined above, newsrooms and advertising departments serve different functions in news organizations. Advertising departments represent the economic and financial interests of news organizations to advertisers at the external level, and transmit the needs and interests of advertisers to newsrooms at the internal level (An & Bergen, 2007). Newsrooms, in contrast, are committed to the social responsibility of journalism and thus to the norms of autonomy, neutrality and truthfulness. A conflict of interests is therefore inherent to the relationship between newsrooms and advertising departments. This conflict culminates in native advertising, as newsrooms and advertising departments are both involved in content production. Native advertising thus facilitates advertising influence on journalistic processes and increases the risk of restricting journalistic autonomy.

Power relations in collaborating on native advertising

The extent to which journalistic autonomy is restricted by native advertising can be inferred from the power relations in the collaboration of newsroom journalists and ASMs. French and Raven (1978: 152) define power as the “maximum potential ability” of social agent O (i.e., a person, group, or social norm) to exert influence on person P. This ability is derived from different bases of power (French & Raven, 1978; Raven, 1993): (1) Reward power stems from O’s ability to reward P and P’s perception that O is able to control this reward. For example, an advertising department could be said to exert reward power if journalists believed that their financial resources improve with ASMs’ performance. (2) Coercive or punishment power is derived from P’s perception that they will be punished by O if they do not conform to O’s influence attempt. An advertising department could be said to wield coercive power if journalists had to fear for their jobs when refusing to integrate certain advertisements into their journalistic products. (3) Legitimate power “stems from P’s internalized values which dictate that O has a legitimate right to influence P and that P has an obligation to accept this influence” (French & Raven, 1978: 159). Internalized values can be natural authority (e.g., from religious institutions) or structural hierarchies. In news organizations, advertising departments could be said to have legitimate power if their position in the organizational structure is superior to that of newsrooms, authorizing ASMs to instruct journalists. (4) Expert power is exerted if O allegedly or actually has more advanced knowledge compared with P. Advertising departments could be said to influence journalists on the basis of expert power if journalists ascribe greater competencies to ASMs regarding, for example, the production of native advertising. In this example, it is also conceivable that newsrooms could exert expert power on sales managers because native advertising is usually oriented toward journalistic methods of production. (5) Referent power is defined by the extent to which P identifies with O, is attracted by O, or would like to be part of O’s social group. Advertising sales managers could exert influence on the basis of referent power if journalists appreciate, respect, or even admire sales managers for their personal qualities. This base of power may be of particular importance if ASMs and journalists collaborate closely in the production of native advertising. (6) Finally, informational power refers to O’s ability to influence P with clear and logical arguments. For instance, advertising departments could hold informational power if they convince journalists to participate in the production of native advertising only on the basis of arguments about why this is necessary and important (e.g., because of the economic importance for the news organization).

Empirical studies addressing power relations between journalists and ASMs in news organizations or journalists’ power relations with external advertisers or PR practitioners are scarce. Koch et al. (2020) found that perceptions of power relations with PR practitioners determined the extent to which journalists in news organizations felt influenced by PR. If they perceived that PR practitioners exerted reward power (because they purchased advertising space in return for coverage of PR material) or referential power (because of close personal relationships), the perceived influence by PR was significantly stronger. Eckman and Lindlof (2003) showed that power relations between newsrooms and advertising departments are not necessarily derived from formal organizational structures but rather vary on an informal level. In their ethnographic study, the advertising department of a newspaper initiated a redesign of the newspaper’s advertorial projects on the basis of power stemming from financial success. During the transformation process, however, the power relations switched in favor of the newsroom, which ultimately directed the redesign on the basis of legitimate power from normative values: “[I]n the end, money did not speak as loudly as journalistic tradition” (Eckman & Lindlof, 2003: 75). However, research addressing power relations between newsrooms and adverting departments in news organizations is scant, especially with regard to controversial issues like native advertising (Lauerer, 2019). I therefore ask the following research question:

RQ 3: How are the power relations constructed between journalists and ASMs in news organizations collaborating on native advertising?

Opportunities and risks associated with native advertising (RQ 1)

The journalists (J) and ASMs agreed on many points but also differed in their views on native advertising. The perceived opportunities and risks can be categorized by the affected stakeholders, namely news organizations, recipients (i.e., news consumers and users of news media), and advertisers (Figure A.1).OPEN IN VIEWER

Coping with ethical concerns (RQ 2)

In research and practice, audience deception has been discussed as a major risk and an unethical aspect of native advertising. The exploration of RQ 1 revealed that the journalists and ASMs faced a conflict resulting from this ethical concern. This idea raises the question of how journalists and ASMs cope with their ethical concerns and conflicts in working with native advertising.

The interviews revealed that the sales managers and many journalists who expressed ethical concerns put these concerns into perspective. Four patterns of relativizing ethical concerns were observed. The first pattern is a third-person attribution of ethical concerns (J1, J8, J9, ASM2-3, ASM5-9). The journalists and sales managers adopting this pattern often substantiated their ethical concerns by referring to problematic disclosure practices in native advertising. However, they did not relate their concerns to their own work but exclusively to practices in other news organizations. This was illustrated by interviewee J9, who raised the concern that native advertising “quite often is disclosed not at all or with tiny labels so that it is not recognized as advertising at first glance, but perceived as journalistic content” (J9). However, this concern was described as affecting only the work of other news organizations because “the way we do it, I do not find it problematic, because we actually disclose [native advertising]” (J9).

The second pattern of relativizing is shifting responsibility toward recipients (J2, J5, J8, ASM1, ASM5). The journalists and sales managers adopting this pattern expressed ethical concerns that stemmed from practices in their own news organization (e.g., inappropriate disclosure). However, they believed that the extent to which these practices should be considered unethical depends on the recipients. Accordingly, audience deception is not only caused by news organizations’ inappropriate use of native advertising, but also by recipients’ lack in media literacy. This idea was illustrated by respondent J5, who was concerned about the use of disclosure labels in native advertising that are often too small and inconspicuous for the recipients to notice. At the same time, this interviewee believed that many recipients are unable to understand the meaning of the disclosures, even if they see them. J5 thus raised the question of whether the news organizations are exclusively responsible for audience deception or “whether the blame can be found in the readers and their intelligence” (J5).

The third pattern is downplaying native advertising by its topics (J5, ASM2, ASM5). The journalists and sales managers adopting this pattern expressed general concerns about native advertising, such as the intentional disguise of advertising messages through the use of a journalistic style. These interviewees also believed that these concerns should only be considered problematic or unethical when native advertising covers certain topics (e.g., politics). This pattern was illustrated by respondent ASM9, who was concerned that native advertising is potentially deceptive because of its close adaptation to journalistic content. However, this interviewee also stated that, in many cases, these concerns do not have any substance, because most native advertising covers only “events, image stories, or something on topics where it is not the aim to influence people in a bad way” (ASM9).

The fourth pattern is relocating the focus on the benefits of native advertising (ASM5, ASM8). The sales managers adopting this pattern generally had ethical concerns about native advertising. However, they contrasted their concerns with the opportunities that native advertising offered to recipients. This pattern was illustrated by interviewee ASM5, who stated that, on the one hand, native advertising “might be kind of deceptive, because you actually disguise the advertisement. On the other hand, it makes advertising appear more entertaining, which is a benefit for the readers. I think these are two sides of the same coin” (ASM5).

Power relations between journalists and ASMs (RQ 3)

The findings for RQ 1 showed that the interviewees were worried about a restriction of journalistic autonomy in news organizations because of native advertising. As discussed in the literature review, the prospects for advertising influence on journalists in news organizations depend on the power relations between newsrooms and advertising departments. Therefore, these power relations were analyzed with regard to collaboration in the context of native advertising.

Three recurring constructions of power relations were observed. The first construction is power relations in favor of journalists (ASM2, ASM5, ASM6, ASM8, ASM9). This scenario was exclusively described by the ASMs. Especially in decisions that concern genuine journalistic content and native advertising, these interviewees perceived that “the newsroom always has sovereignty. Always, always, always” (ASM8). As this interview extract indicates, sales managers explained journalists’ superordinate position by legitimate power rooted in the organizational structure. In news organizations, the newsrooms and advertising departments usually operate independently of each other and are strictly separated. Nevertheless, collaborations within the scope of native advertising are not uncommon, and, despite the unidirectional power relations, these collaborations are characterized by “mutual appreciation and respect” (ASM2).

The second construction is balanced power relations (ASM3, ASM4, J5), which is typically based on expert power. News organizations aim to produce high-quality native advertising. This requires that journalists and sales managers collaborate, contributing their expertise to the production of native advertising and exerting influence on equal terms. The collaboration is organized by predefined structures preventing conflict and stabilizing the balance of power. For example, the news organization of ASM4 employed native advertising editors who were partly based in the newsroom and partly in the advertising department. This structure allowed the news organization to merge the expertise of both departments in the production of quality native advertisements that match the style and wording of journalistic content “and that do not disturb the readers but are beneficial” (ASM4). The structure also facilitated uncomplicated and direct coordination, prevented one-sided influence and conflict, and thus secured the balance of mutual expert power. This is particularly important because native advertising “is right in between these two conflicting areas” (ASM4), namely, journalism and advertising.

The third construction is power relations in favor of advertising sales managers (ASM7, J2, J8), which is largely based on financially motivated coercive power. The journalists knew that advertising departments “are more or less responsible for the financial income” (J8) of their news organization and thus for securing the (financial) basis of their work. The sales managers took advantage of newsrooms’ financial dependency, deriving “a certain power of decision when the situation calls for it” (ASM7). Although the journalists and sales managers involved in these power relations described their relationship as “very harmonious” (J8), the journalists felt obliged to follow the direction of the advertising department. In the context of native advertising, which draws on the competencies of both departments, this may cause conflict. For example, interviewee J8 reported frequently challenging the compliance of native advertising with journalistic norms, well aware of the financial need for this advertising format. However, these concerns were regularly rejected by the advertising department: “Your hands are tied and, in some cases, this is a restriction of your actual convictions” (J8).

Additionally, there are alternating power relations (J6, J9), in which journalists usually have sovereignty based on legitimate power over sales managers in the production of native advertising. The sales managers, however, occasionally challenged this sovereignty on the basis of their (financially motivated) coercive or reward power over journalists.

Finally, three interviewees (J1, J4, J7) were unable to describe the power relations between journalists and sales managers in their news organizations, because they did not perceive any touchpoints between the two departments with regard to native advertising.