The 2.8 million monthly users of the Associated Press’ mobile app will soon see sponsored content in their news streams, as the company turns to native advertising as a revenue source starting in 2014.
The company promises that the material will be appropriately flagged — and that AP reporters will have no hand in it.
“Our point of view is that this is a trend that’s a positive one for advertising,” senior vice president of digital strategy and products Jim Kennedy told TheWrap. “It moves advertising into the realm of storytelling, which, as long as it’s appropriately labeled and everyone understands that it’s coming from a place with a particular orientation, we think it’s good. And there’s no reason to not participate.”
Concerns that the line between editorial and advertiser will blur are understandable but will prove to be unfounded, Kennedy said.
“We are very focused on creating the right policies and best practices around it, so we’re working very hard on that right now. That’s the reason why we didn’t just dive in and start doing it. We wanted to make sure that when we implemented it, it was going to be implemented in a way that would show it off but also protect our reputation, which is the most valuable asset we have.”
AP reporters will not touch the sponsored content, Kennedy said. “We can assign stringers for photography and for video through AP Images, and for text we would likely farm that content out to a third party … We would not use AP journalists to do sponsored content.”
The ads will only account for a fraction of the AP’s revenue — Kennedy expects to see profit in “the low single digit millions” next year — but they are an important new and growing revenue source for the wire service at a time when its core business has steadily declined. In 2012, the AP posted a net loss for the fourth year in a row, though the rate of that decline has slowed significantly.
The AP’s direct competition, Reuters, has also experimented with new ways to monetize its content. The most recent, its consumer-facing news destination site nicknamed “Next,” was canceled before it ever saw the light of day. Layoffs and voluntary buyouts followed.
The AP has already had more success than Reuters in that regard — it experimented with sponsored content in its Twitter feed beginning in January, selling clearly labeled “sponsored tweets” from Samsung during the consumer electronics show. Kennedy said the sponsored content rollout will be similarly pegged to big news events.
“We’ve got a schedule laid out for 2014,” Kennedy said. “Things like the consumer electronics show, the big auto shows, even Davos, the economic forum … the Super Bowl, the Winter Olympics, the fashion weeks, the awards shows, South by Southwest.”
Several companies have expressed interest in working with the AP on native ads, Kennedy said, though no deals are in place yet.