Gigaom and the Question of Ethics and Advertising in News Business

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​Gigaom, the apparently well-established technology news site, came crashing down earlier this month sending shockwaves across the digital journalism landscape and raised some uncomfortable questions about the viability of its business model.

Some critiques have called it a result of poor management and an anomaly that should not alarm digital news platforms. But the underlying cause for the organization’s sudden demise is distressing for those who pinned their hopes on its idealistic approach toward advertising dollars.

Gigaom simply ran out of money.

And that brings us to an inconvenient truth. It seems almost utopic to create a successful news enterprise by shunning advertising from the forefront -something Gigaom attempted to do. It claimed a niche readership of 6.5 million visitors per month. This readership could be highly valuable for marketers yet the organization purposely distanced itself from traditional methods of generating revenue through advertising and depended on its event and research sections to raise capital.

In some ways Gigaom was trying to assert higher ethical values by keeping advertisers as far away from editorial policies as possible. In other ways, it was holding on to an archaic approach to sustain its business.

At the very beginning of news business, advertising only formed a fraction of the source of income for newspapers. The relationship between news organizations and advertisers evolved with time. But with the exponential growth of digital platforms, the drastic change in user behavior stupefied journalism platforms and advertisers alike.

 “The economics of journalism no longer work like they used to. The same holds true for the advertising business. These two clashing industry realities require both print stalwarts and digital believers to get a grip,” writes Lewis DVorkin for Forbes.

This drastic shift from paper to screen has left the news organizations chasing for clicks. Advertisers are falling in this marketing black hole of “clickbait” culture, by expecting to create brand awareness through clickable ads but are doing so at the cost of destroying user experience. The display ads do not impress most digital readers, and the click through is a meager 0.03% to 0.08%. DVokin says this means that on a good day only eight out of 10,000 people will actually click on these ads.

It was this intrusive and annoying form of advertising that Gigaom was perhaps trying to protect its readers from. There are also some sinister examples of advertising giants crossing the line to sway editorial judgment that probably dissuaded the technology news organization from considering traditional methods of advertising to raise money.

For instance, less than a month before Gigaom announced its closure, veteran journalist and political commentator for the Telegraph, Peter Oborne resigned from the paper calling its shallow coverage of the role of HSB in tax evasion, “a fraud on its readers.”

 “If advertising priorities are allowed to determine editorial judgments, how can readers continue to feel this trust?” He questioned in his article for Open Democracy.

It was this trust that Gigaom wished to uphold. Along with its stellar reporting and research, the organization had a reputation for high ethics. “A vendor might pay Gigaom hundreds of thousands of dollars for various services, but all that green didn’t increase the odds a reporter would cover it – or on the chance that someone did write an article, no amount of cash would tilt the opinion-meter even a hair toward the positive,” writes Jason Bloomberg for Forbes.

But it was the money from these advertisers that Gigaom needed to survive and thrive- the ultimate paradox of modern news business.

Yet between these extremes there could be a way for disrupting the traditional news business without compromising on editorial policies. In rapidly growing digital platforms there is ample space for advertising that informs the consumers without distracting them or influencing the editorial judgment.

 “Today’s audiences have made it very clear: they want great content from the most knowledgeable sources,” writes Dvorkin.“They just wanted it clearly labeled with the opportunity to respond and initiate a dialogue.”

This makes way for better brand journalism and some news organizations like Forbes have already adapted it as a safe middle ground between strict editorial policies and money generating content.

Others stay skeptical of the approach and yearn for a digital utopia, where the only ads are a highly relevant experience for consumers. But digital advertising is simply not there yet. Until better methods of advertising are developed and embraced by consumers, organizations like Gigaom, with their strict adherence to “high ethics” will unfortunately be on the losing end.

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