Turning the vicious cycle of news and advertising into a virtuous one

A healthy news ecosystem cannot be a boring one. By definition, good journalism means probing coverage of controversial topics — especially in today’s world with such difficult issues as war, inflation, immigration, social rights and more.

But the business model for news is being pushed to its limits, and many brands have categorically ruled out advertising in news under misconceptions of brand safety. This has forced the industry to a crossroads: the choice is between continuing to feed a vicious cycle that damages quality journalism, which is crucial to a robust democracy — and nurturing a virtuous cycle that can allow both quality journalism and quality brands to thrive.

In the vicious cycle, news is controversial, so brands don’t advertise there, which lowers news revenue. Quality journalism is the biggest victim of this vicious cycle. With less revenue, these newsrooms have less ability to cover the important stories, which means journalism succumbs more to clickbait, while mis-, mal- and disinformation proliferate. It’s worth noting that the major names in brand safety that claim to support quality journalism are the ones turbocharging this cycle and doing the most harm to those same quality news outlets. Their fearmongering and peddling of crude keyboard-blocking mechanisms has made it too easy for brands to avoid news altogether.

We need to move to a virtuous cycle instead — where advertisers support the news and unleash a chain of positive consequences for all parties involved. Advertisers will benefit from reaching an expanded audience. Meanwhile quality news outlets will likely be able to monetize their content more effectively, which means that newsrooms can improve, with more ability to cover the difficult stories and more freedom from simply chasing the next click.

To convince brands to engage in the virtuous cycle of news and advertising, high-minded talk about news’ importance to democracy isn’t enough. Ninety percent of Americans say it’s important for us to have freedom of the press, but that hasn’t helped address the decline in news monetization over the past few decades. We need to advance the business case for news too. It’s simple: You’re missing out if you buy into the brand safety myths and abandon news.

News readers are a critical yet under-tapped marketing audience. Twenty-five percent of Americans are news junkies who follow the news very closely, according to HarrisX polling. On average, they read seven articles and check the news 5.6 times per day. They tend to be older and more affluent, and importantly for brands, they tend to have more purchasing power. Furthermore, 11% of Americans surveyed say they are “exclusive news junkies,” meaning they follow news very closely, but not the more traditional advertising channels of sports or entertainment. You literally can’t reach these exclusive news junkies elsewhere.

Even though the news audience is valuable, many brands may be asking themselves whether it’s worth it given their brand safety concerns. That’s why at Stagwell, we set out to investigate whether readers really turn against brands if their ad appears next to the “wrong” story — in other words, does the core concept of brand safety hold up? We found that it doesn’t. According to our 50,000-person landmark Future of News: News Advertising Study, Americans don’t judge brands based on what news stories their ads appear next to.

It is safe for brands to advertise next to quality journalism, regardless of news topic, our study shows. Ads placed adjacent to news stories covering hot-button issues like gun shootings and the war in the Middle East performed as effectively on key brand metrics as ads placed next to business, sports and entertainment stories. There was no difference in key brand reputational metrics across all types of news stories for key targeting demographics such as Gen Z, mothers and high earners.

Conventional wisdom suggests that sports and entertainment are better places for advertising than news. Brands think there is less downside in those positive environments —but the opposite is true too. There is less upside. Sports and entertainment are already darlings for brand advertising.

By contrast, news has been actively demonetized and there’s an extensive prejudice against it. The opportunity is sitting here for brands that want to reach a new audience and to do so in a more efficient way.

Our research shows that Americans can tell the difference between news stories and ads —and it’s bad business, not to mention extremely patronizing, to assume they can’t. When evaluating news advertising, brands need to go beyond their concerns about safety to embrace the opportunity, because they can get both. The future of the news industry depends on it. And we at Stagwell believe placing media on news is a win-win for brands.

This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.