The Federated Media Conversation And The Duplicitous Motivations Of Its Opponents

By David Ponce

Over the last five days, a small tempest has been brewing in some tech blogging circles. I’m going to talk about it here because I’m indirectly involved. And also because, frankly, I’m somewhat pissed.

It involves our advertising agency, Federated Media (who also represent sites like Digg, BoingBoing, Techcrunch, GigaOm and others) and an inflammatory article posted last Friday on tech gossip blog Valleywag. The controversy revolves around allegations of bribery and ethical misconduct. Two camps have formed over this issue and pointed arguments have been flung back and forth for the past five days, with Microsoft caught in the crossfire. Some could say that I’m inherently biased here, as Federated Media represent us. Maybe. But I’m entitled to an opinion too, and if you care to hear it, keep on reading.

It goes like this. Federated Media has been experimenting for some time with a novel form of advertising they like to call “Conversational Marketing”. The premise is that advertisers, given the right circumstances, can and should be included in the dynamic between an author and his audience. They can then become “part of the conversation”. It’s a schmaltzy sounding principle but it’s pretty slick if pulled off right. If you really want to know more about it, you can read this (specifically the italicized portion a couple paragraphs down). Federated Media has been running these for a long while now, but one of its recent such campaigns with Microsoft suddenly made the world implode. More on this in a minute.

So, you ask: what does a conversational campaign actually mean? How does it work? Well, each author is asked to describe what some buzzwords mean to them: “People Ready” for Microsoft, “Human Network” for Cisco, etc. The text is then integrated into standard IAB sized banner ads. When readers click on those ads, they’re taken to a special companion site where they can read other author’s definitions, and vote for their favorite. And that’s it.

To be clear, authors are never asked to say anything nice about the advertiser. Authors are not paid to write the text, they are paid for the ads that run on their site with that text on it. However, the ads run in the same places as any other ads, they look like ads and on most sites, they are clearly labeled as ads; they just happen to have a little quote on them, written by the owner of the website. The authors are never asked to talk about the advertiser in their regular editorial space.

This was all fine and dandy until Nick Denton, from Valleywag, decided it was time to do a little link-baiting, and wrote an article titled “Microsoft pays star writers to recite slogan.” That’s when the proverbial crap hit the fan. Denton writes:

The stodgy old media industry has a rule that newspaper reporters, and TV news hosts, shouldn’t trade on their public trust to endorse products. It’s become redundant: the reading public typically wants journalists to drop the pretense of objectivity, and wear their prejudices in public. But there are limits to journalistic endorsements, and Federated Media just crossed them. […]

One would have thought that tech opinion-leaders as influential as Om Malik and Paul Kedrosky would ration their credibility more carefully, and reserve it for companies and products for which they felt real enthusiasm.

The allegation here being that Microsoft paid these authors a lump sum to “endorse” them and that these authors would never have done so otherwise. That they’re being shills. Of course, nothing could be further from the truth, but that didn’t stop strongly worded opinions to start pouring in from all sides.

Here’s one example from Dave Winer :

It’s one thing to let Microsoft buy space on your site (it’s called advertising) and quite another to accept Microsoft money for words coming out of your mouth. Next month when we read something positive on these sites about Microsoft, how are we supposed to know if it’s an opinion, or just another example of being paid to say something supportive of Microsoft.

Or this gem, from Jeff Jarvis

So ultimately, this is a cautionary tale for all bloggers who take ads: You must set your own boundaries and not let them be pushed. When you do — whatever those boundaries are — that is the very definition of selling out.

The advertiser’s effort is to get more closely associated with us, our content, our reputations, our brands. They’d like get into our pants mouths. They want us to speak their names. Nicely. Or at least be near them, associated with them.

Well, here’s where I chime in: to all of you pounding on Federated Media for this, I say you’re either seriously flawed in your own reasoning or you’re pretending to ride the moral high horse to make yourselves look better in the eyes of your readers. I’m looking right at you Nick and Jeff. And here’s why.

Jeff, you said it yourself: the fundamental dynamic between the advertiser and the author is their desire to be associated with your image, your brand and possibly your voice. Well here’s a little dollop of truth: the minute you received your first penny in advertising money, you already let them do this. Somewhere in that article of yours, you say “My acceptance of advertising here does not constitute an endorsement of the advertiser. However, I will at times turn down advertising I find unacceptable.” Well, that’s (to put it bluntly) bull. You don’t get to rewrite the rules; I say that every time you do not decline an ad Federated Media sends you, it constitutes a tacit endorsement of the advertiser. You saying it doesn’t makes absolutely no difference. At the end of the day, your readers come to your site (or my site, or anyone’s site), they see ads from Cisco, Microsoft, Dice and countless others plastered around and in their subconscious, they think “If [insert author here] thinks its cool to have these ads up on his site, then these companies must be ok. Otherwise, he would have turned them down.” It’s a zero-sum game: if you don’t turn them down, they’re kosher.

What’s more, it doesn’t make one ounce of difference in the world whether Microsoft’s marketing agency (or Cisco’s, or anyone else) wrote the copy on the ad, or if you did. As Mike Arrington says:

It’s text in an ad box. I think people are pretty aware of what that means…which is nothing.

Let me reiterate. It’s an ad unit. You know what goes on in ad units? Advertising.

Shocking.

Very true. They are clearly labeled as ads. They are displayed in the same areas that ads are always displayed. To imply that there’s anything misleading in this whole process because your words are in the ad is to insult your readers; you’re implying they’re too stupid to know the difference between honest editorial, and an ad.

This entire issue is so darn simple, it baffles me we’re even having this discussion. If money changes hands, it’s advertisement. If not, it’s editorial. If the advertisement is clearly (clearly) labeled, it doesn’t bloody well matter what format it takes or even who writes and draws the ad. If it’s not labeled at all and appears in regular editorial space, then it’s unethical and wrong beyond words.

After having said all this, I will add that it’s a sad reality that there’s a good number of morons out there who may get confused and have some trouble telling the difference between an ad and editorial. I believe they’re a small minority, but in deference to them, I do believe there is some room for improvement on Federated Media’s behalf. As clear as things already are, they could be clearer. The relationship between all parties involved could, for example, be better explained. I believe the company is already working on this.

Also, for the record, I have not participated in a single Conversational Advertising campaign to date. I will in July.

Opinions?