BOB GARFIELD:  Sponsored content is something that's been around for as long as we've had media that need paying for. If you’ve ever watched a television infomercial or read a special advertising section in a fashion magazine, you too have consumed a bit of sponsored content, lately referred to as “native advertising.” And as the news industry continues to struggle for dollars, you will, no doubt, be seeing more and more native advertising alongside the news. This is potentially dangerous territory, as sponsored content is often made to resemble actual content as much as possible.

Steve Rubel is chief content strategist at Edelman, the global public relations firm. He’s authored a new report addressing these very murky public relationships. Remember the uproar earlier this year over a sponsored post about scientology on The Atlantic website? Rubel says he knows why that native advertising puff piece was so jarring. It was in the wrong environment.

STEVE RUBEL:  We had this self-serving positive piece that was next to very thoughtful debate, scholarly sometimes, discourse, and, and it just wasn’t the right fit. It was too distant from what the editorial formats are there already. Now, if it was the Church of Scientology trying to shape a debate around an issue and they had multiple points of view and they basically funded the piece of content and had their, their viewpoint along with others in that mix, I think it would have been a better fit.

BOB GARFIELD:  You describe in your report a number of different ways that branded content or sponsored content can manifest itself. Can you tick down the list of ways that this can be accomplished?

STEVE RUBEL:  So the first is what we’re calling syndication. That is like the scientology example. It is like the advertorial reinvented, where you’re in a site that has a bunch of news articles and somewhere in the middle of that list is a piece of content that the brand or one of their agencies create that sits in that mix. We’re not sure about the long-term viability of that particular format. We think that people will skip over it. They see a piece sponsored content, that might mean don't read.

The second we’re calling integration, and that's the product placement format that worked on TV, reinvented for the Web. We've had one publisher say, we do a list of 10 things you need to know about today. Number 11 could be from you, the sponsor. It’s ideally created in the spirit of what's already on that site. BuzzFeed is one of the more advanced companies here. Their  entire business model is to create these many sponsored listicles, if you will, list articles.

BOB GARFIELD:  There is a third category of paid content, paid co-creation. What’s that?

STEVE RUBEL:  That’s actually the cleanest one. That's where a media company wants to have a vertical in an area, say, about the future of business or about family travel, but they don't have the money to cover it. So they will create a special section that isn’t just a one-off, but would live on, on a regular basis. The marketer basically commits, to some degree, to fund that. The media company commits a editorial person to that section that the sponsor has no dialogue with. They are just creating content in that sector, say on the future of business.

We liken it to a baseball stadium where the sponsor comes in and acquires naming rights for, you know, 10 years. And it's the most expensive of the approaches, but it's also probably the most idealistic one, ‘cause there is a equal win for all three parties involved, if it's done well.

BOB GARFIELD:  I had a sickening experience recently, where I appeared on HuffPost Live, the Web TV version of Huffington Post, and the subject was car advertising, or something like that.

FEMALE HOST:  Today we’re continuing our conversation on luxury, and we're talking to some experts and veterans of the marketing and advertising world about reaching different audiences abroad. Joining us in our Google Hangout, we have Bob Garfield, author of Can’t Buy Me Like, and host of NPR’s On The Media and writer for Media Post, David Kiley, editor-in-chief of AOL Autos, Holly Pavlika, senior vice-president of strategy at Collective Bias. And back in the studio with me, we have our friend Jim Vurpillat, the  director of marketing for Cadillac, which is a partner of HuffPost Live and is, of course, a brand that is synonymous with luxury. It’s great to have you all here.

  [END CLIP]

BOB GARFIELD:  It turns out that Cadillac was the sponsor of this piece. It was agreed beforehand that Cadillac would have its people on the piece and that Cadillac cars would be featured within it. And I've been sucked into that dynamic, and it was – uh sickening.

STEVE RUBEL:  All the more reason why having this discussion around ethics is important. It's a matter of just being very clear all around, all sides, not the least of which is the audience, in what is - in what is happening and where and why.

BOB GARFIELD:  So it is all murky but, still and all, you  recommend some primary best practices. What are they?

STEVE RUBEL:  So there’s a set of ideals that relate to the creation of the content, the transparency around that and also the process, for people to consider that are mostly for us. We are going to prefer to work with companies that kind of err on the side of disclosure and are really upfront in what is taking place and why. And the media companies, the sales side and the editorial side are very separated. We are going to separate the parts of our business, so we’re going to make sure that people who are working with journalists day-to-day are not also negotiating paid media buys.

BOB GARFIELD:  “Ideals” is a pretty good word because [LAUGHS] they take place in an ideal world. At this moment in the history of native advertising, if you’ll forgive me, the best practices that you’ve promulgated sound to me kind of like pieties that ignore the inherent structural problem [LAUGHS] of advertorial, which, by its very nature, is first trying to exploit borrowed interest from the, the surrounding editorial, you know, a halo effect that it may in no way deserve, and, and, at worst, just  try to trick the reader. You talk about labeling. That is such a classic example of why this may be an insoluble problem.

On the one hand, the marketers want as little labeling as possible, because otherwise people, as you say, skip over the material. And the media are conflicted because they want to accommodate the [LAUGHS] marketers and make the sale. And, therefore, they use just enough disclosure to offer sort of plausible deniability but still make it very easy for readers to be confused, to trick them, in effect. Are, are these problems that can be solved?

STEVE RUBEL:  They have to be solved because the media has no other means to monetize right now. I don't think that this is something that they’re running to because they are excited about it. I think they're running to it because they feel that they need to offset those other financial pressures. And there’s also a cost pressure for them too, is they have to continue to build out for new platforms, like social networks, for example, and mobile that they didn’t have to build out before.

So the solving of this issue is primarily a publisher problem. But we believe that marketers and the public need to also be equal parties to this discussion, because what we all want to see is a viable press that continues to do what it's done for hundreds of years, but maybe finds a way to borrow the best of what has worked on social networks and search engines, as the business model. People there seem to know that those kinds of ads are what's required to support a free service. I feel like it's in everybody's best interest to somehow make this work, if we want to see a, a viable free press.

  [MUSIC UP & UNDER]

BOB GARFIELD:  Steve, thank you very much.

STEVE RUBEL:  Thank you, Bob.

BOB GARFIELD:  Steve Rubel is chief content strategist at the global PR firm, Edelman.