Freedom Communications’ Aaron Kushner (photo by Jebb Harris, Orange County Register).

“California newspaper defies industry wisdom to stay alive – and prospers” declares The Guardian in an analysis of the Orange County Register‘s death-defying experiment under the leadership of a former greeting card executive with no background in newspapers.

Aaron Kushner (right) and his partner, Eric Spitz, formed Freedom Communications and bought the Register a year ago. They then stunned the shell-shocked newspaper industry by declaring their intention to go completely against the prevailing practice of layoffs and cost cuts. They would invest in print, double their reporting staff,  increase subscription prices and  put up one of the industry’s most rigid barriers to online access.

They’ve kept their promise. Newsroom staff is up to 360 from a low of 180 when Freedom took over. The Register routinely publishes daily issues that are nearly twice the size of its nearby rival, the Los Angeles Times. Page counts have been increased by half, color expanded and even the quality of paper improved.

Daily circulation is holding steady and total circulation is up sharply if you include the 28 weekly papers the company has invested in over the last 12 months. The Register has hired investigative reporters and lured newspaper wunderkind Rob Curley out of exile to rejuvenate the editorial product with a focus on local news and practical advice.

Freedom is showing particular sensitivity to  local businesses. One promotion late last year gave each reader the opportunity to contribute $100 worth of advertising to his or her favorite charity. Some 1,300 nonprofits benefited from the program.

Kushner thinks the time is right to place a big bet on print. “Never before and never again will so many people be in the sweet spot of newspaper readership as the next 20 years,” he told the Guardian. “It’s called the baby boom.”

There’s no doubt the Register is growing, but is it prospering as the Guardian‘s headline proclaims? The jury is still out on that.

Ken Doctor ran the numbers back in January and concluded that the Register may be able to cover its estimated $9 million+ in additional annual costs through higher subscription fees, but that the advertising market is in long-term decline and there’s little that any newspaper can do about that. Doctor contrasted Kushner’s growth strategy with the slash-and-burn tactics being applied by Advance Communications and said we’ll know in about two years whether growth or contraction is the recipe for success. Clearly, we’re pulling for Kushner.

Writing on CJR.com in May, Ryan Chittum said the odds are against Kushner, but noted that if he fails, “he will have gone down investing in journalism.” Chittum also has some revealing stats about the profitability of newspapers, which remains quite strong. When newspapers shut down, it’s because they can’t afford the cost of their debt, he says. Most are still in the black on an operations basis, which makes Advance’s frequency cutback strategy all the more puzzling.  It also suggests that value investor Warren Buffett  isn’t a billionaire for nothing.

Kushner says he’s in it for the long haul and he now has his eyes on a bigger prize: the L.A. Times. Tribune Co. is going to be looking to unload some assets now that it has exited bankruptcy, and many observers believe the Times will be on the auction block. If Kushner buys it, he can all but own the southern California market. Regardless of the  current fortunes of daily newspapers, having a  near-monopoly on even a shrinking media business in the country’s largest media market has to be attractive.

Related articles

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• The OC launches a newspaper war in the LBC
• California newspaper defies industry wisdom to stay alive – and prospers | World news | guardian.co.uk
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• Aaron Kushner: OC Register is not an experiment. There are no experiments. There is no exit. By Michael Depp @NetNewsCheck

We frequently hear from reporters and students who want to know our opinion about the future of media in general and newspapers in particular. We’ve assembled our answers to some of the most common questions here. Feel free to quote from these comments. If you need additional perspective, e-mail us.

What’s the outlook for newspapers?

The newspaper industry as we have known it in the US and Europe will never recover. The changes in the way people consume information are permanent, and big-brand publications will never be as critical as they once were.

Google has been a game-changer. We now subscribe to information rather than to media sources. We search and click on links from our friends to find information that interests us. Newspapers have relied upon loyal subscribers who renewed every year for their business. Those subscriber numbers are dwindling and the audience is getting older. This trend will not reverse.

Another major factor is that the cost of advertising is plummeting, thanks to online advertising exchanges and Craigslist. This has permanently damaged the revenue model of the newspaper industry and will force the titles that survive to cut back, diversify their revenue streams and reduced frequency.

Do you think it’s possible for the newspaper industry to make a comeback?

Many newspaper companies will survive as smaller properties with multiple revenue streams and a diminishing print component. The brands may last for a long time, but they will never again be as large and influential as they were just five years ago.

But being big isn’t the point. What matters is that platforms for quality journalism survive and flourish, regardless of how many there are or how big. In fact, there is opportunity in the current industry downturn for newspaper companies to wean themselves off their advertising addiction and to diversify and strengthen their positions.

Think of The Walt Disney Company. Forty years ago Disney was wholly dependent on hit movies for its success. It had a vulnerable and unpredictable model. Today, Disney is a diversified media and entertainment company with revenues coming from theme park visitors, license fees, tickets, retail sales, advertising and even online subscriptions. It can survive a string of flop movies because it has other sources of income.

Newspaper companies are finally making the shift. The Newspaper Association of America reported  in early 2013 that new products like digital consulting for local business and e-commerce transactions accounted for nearly 10% of revenues at newspaper companies. There is an opportunity for media companies that diversify successfully to emerge from advertising crash stronger and better positioned for growth.

Is it at all possible for electronic media to be phased out someday just as newspapers are right now?

Until someone figures out a way to deliver information directly to the cerebral cortex, I think electronic media will be the dominant way people consume information for a long time to come. It’s fast, cheap and easy to update.

The bigger question that you’re not asking is what the impact of newspapers’ decline will be on journalism. I’ve written about this quite a bit on the blog, but in a nutshell I believe we will go through a period of great tumult as people try to figure out a sustainable model for quality journalism. I fear that serious investigative journalism is threatened because it requires time and patience. On the other hand, we have more information at our fingertips today than we’ve ever had, and I think that’s a good thing. I like the perspective of this article in Slate

PwC (formerly PricewaterhouseCoopers) has issued its 14th annual outlook for the global entertainment and media industry, and the trends are mostly positive – or at least not horrendous – for mainstream media through 2017.

Newspaper advertising is expected to decline 2.9% annually to $28.5 billion in 2017, from an estimated $33 billion last year. The sector “is not in ‘terminal decline,; at least in the near or medium term,” writes MarketingCharts in a summary article. “In fact it has shown some resilience, and print circulation has stabilized even as newspaper websites attract an increasing number of readers.”

TV advertising looks particularly strong, with a 5.1% forecasted compound annual growth rate. Advertisers are particularly intrigued about the potential of personalization and so-called “second screen” viewing which permits audience members to interact with the broadcast as well as with each other.

Even radio is forecast to grow, driven by satellite networks. And then there are billboards. Those out-of-home vehicles will lag only TV advertising in projected revenue growth, perhaps because they still deliver a unique experience and you can’t avoid looking at them.

The full report costs $2,200, but the links above provide the highlights.

ZenithOptimedia just released a list of the world’s largest media companies ranked by media revenue, which it describes as “all revenues deriving from businesses that support advertising, not just the advertising revenue itself.” Number one on the list is Google at nearly $38 billion in 2011 revenues. It’s followed by DirectTV and then News Corp. which owns The Wall Street Journal, Fox TV and many U.K. newspapers.

How dominant is Google? It accounted for 49% of the world’s internet ad expenditure in 2011, according to the ZenithOptimedia press release. Three other Internet media owners (Facebook, Microsoft and Yahoo!) generated another $11.3 billion. Much of this revenue came out of the hides of traditional media companies.

That isn’t to say that mainstream media is standing still. “Of the top 30 global media owners, 22 are companies whose main business is to attract audiences with strong content,” says the press release. “Between them, these 22 generated $169 billion in media revenue in 2011, or 61% of the total generated by the Top 30.”

So content rules, but search rules more. The world’s biggest media company produces almost no content, and it’s in a market that’s growing 13% per year.

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ZenithOptimedia just released a list of the world’s largest media companies ranked by media revenue, which it describes as “all revenues deriving from businesses that support advertising, not just the advertising revenue itself.” Number one on the list is Google at nearly $38 billion in 2011 revenues. It’s followed by DirectTV and then News Corp. which owns The Wall Street Journal, Fox TV and many U.K. newspapers.
How dominant is Google? It accounted for 49% of the world’s internet ad expenditure in 2011, according to the ZenithOptimedia press release. Three other Internet media owners (Facebook, Microsoft and Yahoo!) generated another $11.3 billion. Much of this revenue came out of the hides of traditional media companies.
That isn’t to say that mainstream media is standing still. “Of the top 30 global media owners, 22 are companies whose main business is to attract audiences with strong content,” says the press release. “Between them, these 22 generated $169 billion in media revenue in 2011, or 61% of the total generated by the Top 30.”
So content rules, but search rules more. The world’s biggest media company produces almost no content, and it’s in a market that’s growing 13% per year.

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• How Google killed online advertising for everyone (else)

Paywalls continue to spring up across the news landscape while new-media enthusiasts warn that gated news is a throwback to a bygone age.

Britain’s Telegraph and Sun announced plans to erect paywalls almost simultaneously after successful tests. The Telegraph, which claims to have the largest circulation of any U.K. daily, will give away 20 articles free every month and charge £1.99/mo. thereafter for unlimited access to the website and smartphone apps. The Sun‘s move is timed to make the most of parent company News International’s £20M deal to show near-live clips of Premiership football highlights on its websites beginning in August.

In Canada, Postmedia Network will roll out paywalls across all 10 of its properties, including the National Post. The move completes an experiment that began two years ago and has been deployed in stages. Digital-only subscribers will have to ante up $9.99/mo. for reading more than 10 articles in any title within a month.

Perhaps most indicative of the surging popularity of paywalls, though, is Politico’s decision to experiment with the idea. The Washington, D.C.-focused news service, which was once personified the new breed of digital-only publishers, has given in to the reality that advertising rates continue to fall and subscriber revenues must become part of the business. “We believe that every successful media company will ultimately charge for its content” said a memo signed by several of the Politico’s top executives.

Circling the Wagons

We continue to be more interested in experiments that break new ground in publishing economics than efforts to resurrect old models. There’s plenty to report there, as well.

Ken Doctor kicks us  off with a fine analysis of where NewsRight went wrong. NewsRight was a consortium of 20 publishers that sprung out of the Associated Press in early 2012 with the mission of tracking down copyright violators while also creating a subscription model that would permit digital publishers to license quality content for redistribution.

“Publishers have seethed with rage as they’ve seen their substantial investment in newsrooms harvested — for nothing — by many aggregators…” writes Doctor on the Nieman Journalism Lab, “…but rage — whether seething or public — isn’t a business model.”

Bingo. Consortia are good for only two things: setting standards and raising awareness. They’re a terrible way to create new products. The idea of pursuing copyright violators individually is ludicrous, anyway. It’s like trying to stamp out ants. There are always more where the first batch came from.

The only anti-piracy tactic that works is a public awareness campaign, and the newspaper industry has shown little interest in that. NewsRight died because the members inevitably had conflicting priorities, and it was impossible for everyone to find common ground when everyone had something to lose.

Does BuzzFeed Have it Right?

Doctor points to the work being done at NewsCred, BuzzFeed and Forbes, among others, as examples of new ideas worth developing. “In 2013, we’re seeing more innovative use of news content than we have in a long time,” he writes. We’re particularly interested in BuzzFeed, the viral content engine started by Jonah Peretti and others in 2006. At first glance it looks like any other new-age news site, with a bottomless home page stuffed with a jumble of seemingly unrelated content ranging from the profound to the ridiculous.

As New York magazine points out in a lengthy profile, though, there’s a lot more going on there than cat photos. BuzzFeed is tuned to create content that people want to share, and it could care less who the authors are. The home page blithely mixes contributions from staffers and advertisers with minimal labeling. Every element within every story can be shared on every social network you can imagine. Every page is designed to maximize audience interaction with the content.

BuzzFeed makes little effort to segregate advertiser contributions from the work of its own staff. A photo essay on “12 Tips to Have An Amazing Barbecue” from Grill Mates sits next to “Just The London Skyline, Made Out Of Sugar Cubes” by staffer Luke Lewis. Some of the branded stuff is actually pretty good, like, JetBlue’s “The 50 Most Beautiful Shots Taken Out Of Airplane Windows.”

Is this serious journalism? Well, no. We don’t think corporate brands will ever produce that. But if they want to run their grilling tips next to similarly lightweight content from professional editors, why not let them? The genie that goes by such names as “brand journalism” and “content marketing” isn’t going back in the bottle. A recent survey concluded that corporate marketers and agencies consider branded content to be among their most effective branding tactics, and that 69% plan to spend more money on it in the coming year.

The bigger issue is whether sustainable publishing business models can be found that don’t rely entirely upon display advertising or subscription revenue. BuzzFeed and NewsCred are making some progress there. We don’t believe they produce serious journalism, if sex, gossip and voyeurism can attract a large enough audience to support real journalism, then we’re in favor of it. The idea isn’t new. It’s worked in the U.K. for decades.

Related articles

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The Pew Research Center’s annual State of the Media Report paints a dismal picture of the condition of mainstream media – in particular broadcast and magazines – but Slate’s Matthew Yglesias says the report looks at the wrong things. Which side are you on?

There’s no question that Pew’s annual media audit and survey of 2,000 consumers is about as depressing as any of the 10 annual reports that the nonprofit media watchdog has completed. Among the lowlights:

• Nearly a third of U.S. adults have stopped using a news outlet because it no longer met their needs.
• That’s not surprising when you consider that low-cost sports, weather and traffic information now account for 40% of the content produced on the average local newscast.
• The population of full-time professional newsroom employees fell below 40,000 for the first time since 1978. It’s down nearly 30% from its 1989 high.
• In an election year, the declines in coverage were particularly evident. Live broadcast reports fell from from 33% of the news hole in 2007 to 23% in 2012. And 2007 was not an election year. Commentary and opinion, which are cheap to produce, now make up 63% of  news airtime on cable channels, while straight news reporting comprises only 37%.
• An examination of 48 recent evening and morning newscasts found that 20 led with a weather-related story. Weather coverage is cheap.
• Only about a quarter of statements in the media about the character and records of the presidential candidates originated with journalists, while twice that many came from political partisans. The report runs down a list of informational websites that political parties and advocacy groups have set up to influence media, but some are now actually becoming the media. Pew notes several examples of major news magazines that have carried partisan reports as part of their branded news stream.
• In that vein, Pew notes a 2008 analysis of Census Bureau data by Robert McChesney and John Nichols that found that the ratio of public relations workers to journalists tripled from 1.2-to-1 in 1980 to 3.6-to-1 in 2008. That gap has likely grown since then.
• In summary, “News organizations are less equipped to question what is coming to them or to uncover the stories themselves, and interest groups are better equipped and have more technological tools than ever,” Pew states.
• Incredibly (to us, at least), the public is mostly unaware that the news media is struggling. Only 39% of the 2,000 consumers surveyed said they have much awareness of the industry’s problems.

Newspapers actually come off pretty well in this year’s report. Thanks to paywalls, which are in place or in the works at one-third of U.S. newspapers, circulation held steady year-to-year. The New York Times said its circulation revenue now exceeds advertising revenue for the first time.

Warren Buffett (source: Wikipedia)

However, the long-term trends are still negative. Newspapers lose $16 in print ad revenue for every $1 in digital ad revenue gained, and that figure is up from $10-to-$1 in 2011. Equally ominous is that Facebook and Google are doing a better job of figuring out how to target digital advertising locally, which threatens one of the few pockets of revenue strength newspapers have left.

Because the long-term outlook is so bad, newspapers have become an attractive investment vehicle. Pew notes that value investor Warren Buffett has been snapping them up at a rapid clip because they are so cheap. The Philadelphia Inquirer and Philadelphia Daily News were bought for $55 million last year, which is 1/10 of the price they commanded in 2006.

Out of Mind

Perhaps the most surprising finding is the low public awareness of the news industry’s crisis, and that’s where Yglesias’ analysis on Slate is most interesting. “American news media has never been in better shape,” he states at the outset, using the Cypriot economic crisis as proof. We’re not sure the media itself is in great shape, but readers are doing fine.

Yglesias cites a “bounty” of online resources that provide context, analysis and even an interactive calculator that lets visitors try out different ideas for solving the island nation’s financial problems. It’s easier than ever to produce news using public sources and simple publishing tools, and the Internet makes boundless background information available in seconds.

Assessing the state of media by looking only at the health of traditional outlets creates “a blinkered outlook that confuses the interests of producers with those of consumers,” he writes. “[T]oday’s readers have access to far more high-quality coverage than they have time to read.”

The finding that only four in 10 Americans are even aware of the media’s struggles can be interpreted in several ways. The pessimistic view is that Americans are basically dumb, lazy and happy with the partisan screaming matches that characterize a lot of broadcast news.

A more positive view is that Americans have already moved on to using other sources and haven’t noticed the loss of their once-trusted brands. It’s impossible to know without further research, but we have to acknowledge Yglesias’s point that the decline of mainstream media certainly hasn’t resulted in a dearth of information.

No Expiration

One important point the Slate business writer makes is that news no longer carries an expiration date. Traditional media assumed that news would be consumed within a few hours or days. Archival or background information was tedious to find, so readers were mainly limited to whatever the newspaper or broadcast provided within its limited space.

Now everything is part of a grand, searchable archive, which permits people to go as deep as they want whenever they want. Those who don’t have the time to come up to speed on the banking crisis in Cyprus can put off learning about it until later. Then they can go to a resource like Wikipedia’s coverage and spend hours digging into background for more than 40 sources cited there.

We prefer the glass-half-full perspective. While the loss of the media’s watchdog function is troubling, the power of having timeless access to resources we didn’t even know existed is energizing. The challenge is to find ways to fund the valuable services that media has provided in the past so that the information that doesn’t attract search engines and sponsorship dollars still has a platform.

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Traditional media took it on the chin in marketing plans researched by Aquent and the American Marketing Association (AMA). One in three marketers plans to decrease spending on newspaper advertising, making newspapers the big loser in the study. They were joined in the cellar by consumer magazines, radio, trade magazines and television, all of which were cited by more than 20% of respondents as targets of budget cuts. The winners? Mobile media, social media with growing significance of youtube views and marketing automation. More than three in four marketers plan to increase spending in those areas.

Perhaps marketers are simply reflecting the interests of the audiences they want to reach. Alan Mutter gathers some statistics that point to ominous demographic trends:

• Only 6% of people in their 20s and 16% of 40-year-olds regularly read newspapers, compared to 48% of people over 65.
• Only 29% of the U.S. population regularly read a newspaper in 2012, down from 56% in 1991.
• Three-quarters of the audience at the typical newspaper is 45 years of age or older. In comparison, over-45s comprise only 40% of the population.
• Print advertising still generates between 80% and 90% of revenues at the typical major metro daily.

Mutter asserts that newspaper publishers will never pull out of their tailspin unless they can create products that appeal to the new generation of digital natives who can’t be bothered to drag around paper, CDs or books. For them, the phone and the tablet are their windows on the world, and that will change industries ranging from news to travel to banking.

There are always ways to make statistics say what you want them to say, of course. More people read a newspaper than visited a social network in the past month, according to KPMG International. Traditional electronic channels fared even better: 88% of respondents to the survey said they’d watched TV in the previous month and 74% said they’d listened to the radio. That compares to just 57% who had tweeted or Facebooked. The survey measured habits of more than 9,000 people in nine countries. It did not ask how much time respondents spent with each media.

There’s some evidence that the novelty of Facebook is wearing off. A new Pew Research study finds that 28% of Facebook users say the site has become less important to them, and a third have cut back on the amount of time they spend on Facebook. Asked about their plans for allocating time to Facebook in the coming year, 38% of 18-to-29-year-olds said they’ll cut back, compared to only 1% who plan to spend more time.

And speaking of Pew, another recent study finds strong support for a bastion of the print world: libraries. More than half of Americans 16 or older visited a library during the past year, and of those who did, 26% plan to increase library usage during the next year while 22% plan to cut back. Asked if libraries should clear out some of their book stacks to make way for more technical resources, 36% said definitely not, compared to 20% who supported such a change. It would appear that while print may be on the decline, the role of the library as a community gathering place is still secure for now.

Miscellany

Writing in Scientific American blogs, Frank Swain tells of  a new initiative by the Royal Statistical Society’s BenchPress project to teach young journalists how to interpret statistics. The program sends volunteer working scientists into schools and newsrooms across Britain to help ensure that “journalists produce science news stories that are as robust and accurate as possible.” This seems like a great idea to us. Any yahoo with a SurveyMonkey account and a mailing list can field a survey these days, and publishing tools make the results look like they came from Gallup. Scientists complain of having to squeeze the conclusions of complex research studies into tweetable sound bites in order to get attention – and more funding. There’s so much bad research out there, and statistics isn’t a core part of the curriculum at many journalism schools. Maybe it should be.

The Washington Post has come up with a “Truth Teller” app that compares statements made by public officials and corporate spokespeople to databases of facts in near real time. The project, which was funded with a $50,000 grant from the Knight Foundation’s Prototype Fund, is said to be able to extract audio, convert it to text and then conduct searches based upon the content. We’re somewhat skeptical, given that our Google Voice app still converts all our voice-mail messages to Martian, but maybe the Post found better technology.

The video below tells more, and stresses that this is a prototype. The technology is ultimately intended to be used behind the scenes to help reporters more quickly scope out falsehoods. We see huge potential for politics and mischief with this technology. Imagine a CNN vs. Fox “Leaderboard of Lies” or a plug-in that tweets falsehoods in real time. That we would follow.

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Statistics portal Statista (which we rate officially awesome) has this graphic showing that Google’s advertising revenues now exceed those of the entire print media industry put together. “Google, a company founded 14 years ago, makes more money from advertising than an industry that has been around for more than a hundred years,” writes Felix Richter. It’s actually more like 300.

The comparison isn’t entirely fair. The chart shows Google’s global gross global sales against the U.S.-only print business, and Google did pay some $4 billion in commissions to media partners. But still…

More on Slate.

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Journalism traditionalists who suffer from high blood pressure probably shouldn’t read this piece by Forbes editor Lewis DVorkin. In it, he outlines the role of what he calls “brand journalism” in the evolution of Forbes.com, and even in Forbes magazine. He also scolds journalists for their objections to this increasingly popular concept, saying that their interest in keeping marketing content cordoned off from staff editorial is in part an instinct to minimize competition.

DVorkin has been a vocal critic of those who cling to the traditional Chinese wall principle of strict separation between advertising and editorial. In his view, the new economics of the profession demand radical new ideas, and journalists are standing in the way. “After five years of media turmoil, the profession I love clings to the belief…that the industry’s problems are for other people to solve. And when steps are taken to solve them, my colleagues will put up a fight if they can’t do exactly what they did before,” he wrote a couple of weeks ago in a summary of the changing advertising landscape and Forbes’ adaptation strategy.

Like it or not, DVorkin’s vision of increased integration between marketing and editorial content is gaining favor in traditional publishing circles. The trend is called “brand journalism,” “native advertising” or “content marketing,” but whatever the title, it’s breaking down some traditional walls.

Boston.com, which is the online arm of the Boston Globe, recently launched “Insights,” a sponsored advertising feature that showcases blog posts from advertisers. Boston.com is a little more aggressive about labeling Insights material as advertising than some other brand journalism practitioners, but it’s the same basic idea. The publisher appears to have no problem with participants like Business Intelligence Solutions embedding the banner ad at right on its blog, saying nothing about the sponsorship arrangement.

Some other publishers have all but erased the lines between staff and brand content. BuzzFeed, which is one of the new breed of breathless, celebrity-stuffed news sites for the ADD set, expects to derive nearly all of its revenue from branded content and sponsored posts. So far, things are going pretty well. The site was a magnet for political advertising during the US presidential campaign and is expected to triple revenues this year. Branded features, like this one from JetBlue, look the same as BuzzFeed content and carry only lightweight advertiser labeling. The Atlantic is also in the pool with Quartz, a news site that blends branded and staff-written content more or less seamlessly.

Writing on emedia, Rob O’Regan has a good summary of this trend, which has been fueled by Twitter’s sponsored tweets and Facebook’s sponsored stories. Those companies, which have no preconceptions about ad/edit separation, say these new vehicles are a resounding success. Publishers are taking notice, but a news site is not a social network. News organizations trade on credibility, and “native” ads tread into new territory. Recent research by Mediabrix and Harris Interactive found that  readers often feel confused or misled by branded content.

Compatible Content

The reason all this is happening, of course, is that the traditional print advertising model doesn’t work in the highly targeted online world. Display advertising is the fastest growing category of online advertising, and publishers have always known that display ads surrounded by compatible content perform best. Advertisers have traditionally bought space next to compatible content, but now they want to provide the content, too, because people are rejecting traditional messaging.

Businesses are quickly glomming onto this trend. Cisco relaunched its press room last year as a news stream, hiring laid-off journalists from major business publications to write thoughtful trend pieces. Intel is doing the same thing. Coca-Cola just overhauled its corporate site as a lifestyle news magazine under the “Coca-Cola Journey” brand. Expect many others to follow.

Sponsored content is nothing new. Mobil Oil bought space on The New York Times‘s op-ed page in the 1950s. What’s different today is that a severely weakened mainstream media is willing to be more the creative than ever in placement and labeling – even if that means potentially compromising their own brands.

Is this a horrifying development? The journalism purest in us says yes, but we’re inclined to keep an open mind. Lewis DVorkin has a point when he says journalists live in a bubble.  Social media have shown that good information can come from anywhere, even from people who aren’t journalists. As media organizations have learned to their chagrin in recent years, you can’t shove anything you want down people’s throats when they have infinite choice. The same applies to advertisers.

Regardless of who the author is, anyone who publishes content is at the mercy of readers. Marketers who publish the same dreck on branded media sites that they use to fill their purchased ad units won’t see much return on their investment. If people don’t want the content, it doesn’t matter how much you pay to publish it.

So the stakes are higher for marketers, too. The question is how many of them can successfully change their perspective to think like publishers. In our experience, precious few can. The natural instincts of people who have grown up in the traditional marketing world is to sell at every opportunity, not to serve the informational needs of the audience.

This will change over time as a new generation steps in, and publishers will play a key role in effecting that change. They will need to work with their clients to make sure the sponsored content they carry is worthy of their brand. It can be done. Admit it: If you clicked on the JetBlue link above, you scrolled down the entire page. It’s good stuff, even though it’s sponsored.

The silver lining is that if “native advertising” can become a major new revenue source, it can enable publishers to re-invest in quality journalism. In the end, that’s more important than labels or Chinese walls.

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• The newsonomics of native, indigenous, and immigrant content (niemanlab.org)