On August 16, Entrepreneur Magazine announced a new partnership with CAN Capital, through which they marketed working capital loans under the Entrepreneur brand. The New York Times has since questioned the resulting promotion, which closely resembled non-advertorial content. After being contacted by the New York Times, Entrepreneur changed the advertisement and removed it from the top of articles.
On August 28, two weeks after Entrepreneur Lending launched, Editor-in-Chief Amy Cosper announced on Twitter she was stepping down for undisclosed reasons. Neither party has said much on the subject, although on Twitter, Cosper hinted at disagreements regarding Entrepreneur’s new direction:
Know what you stand for. I know I do. Keep being epic.
— Amy Cosper (@AmyCCosper) August 29, 2016
Executive editor Jason Feifer has stepped in as Interim Editor, but a permanent Editor-in-Chief has not been named. Combined, this sudden departure – and the rapid walkback of a new promotional strategy – may indicate a broader shakeup at Entrepreneur Media.
I’m not shocked by any of this. Monetization and conflicts of interest are topics we think about a lot at Fit Small Business. As of 2016, media companies are as hard-pressed as ever to generate revenue. Publications both old and new have struggled to make money as readers have moved online.
By one measure, the New York Times makes 228x as much money on the average print reader as they do on a web reader. This isn’t about the blind pursuit of profits. It’s a question of how to pay writers and editors and how to publish articles in a time when most readers want – and demand – content for free. This publishing crisis has been going on for over a decade, and the shakeup at Entrepreneur is just one example of a company trying new ways to sustain itself online and struggling to find its footing.
They’re not the first publisher to try this kind of strategy. Outlets old and new have been doing content partnerships and native advertising for years. These include established publishers, such as the New York Times, as well as new websites such as Refinery29 and NerdWallet, both of which have attracted millions of readers and hundreds of millions in venture capital.
Any relationship that partners content and advertising – including traditional models such as banner advertising – creates a potential conflict of interest. The best way to solve this is to make these relationships as clear as possible to the reader. The “paid post” header used by the NYTimes is one way to do this. A sidebar disclosure can also work. The Wirecutter, a popular site for product recommendations, offers a great example in the top right of their articles.
Clear reasoning and thorough, open research also show readers how the article’s writers came to their conclusion, independent of any monetary relationships. This is another place where The Wirecutter excels – check out their USB Wall Charger review for example, where they narrowed down a field of 45 products over three rounds of testing to determine the best based on objective measures. The clearer the reasoning behind a recommendation, the less likely a website simply offered a placement to the highest bidder.
Online publications are turning to performance-based and native advertising for a reason: it’s a highly effective way to bring in revenue, in a time when revenue is otherwise difficult for publishers to come by. For us, it’s a no-brainer. Not only would banner ads and pop ups annoy our readers, they wouldn’t cover the cost of even half our staff. Performance-based advertising enables us to field eight expert writers with years of real life experience, writing about topics ranging from maternity leave policies to how to advertise on Google. Many of these topics have not been addressed in detail online – there isn’t a maternity leave policy guide half as long as ours, for instance. Our in-depth articles simply would not be possible on another advertising model.
As publishers seek sustainable revenues, even more outlets will look to native ads and performance-based marketing. Many traditional publishers, such as Entrepreneur, will initially stumble as they adapt to these new revenue strategies. That doesn’t mean these strategies are uniformly ineffective or unethical. Done right, this creates a win-win-win situation for publisher, advertiser, and reader, enabling publishers to create quality articles in 2016 and beyond.
We reached out to Amy Cosper and Entrepreneur Magazine regarding this article. We received no response from Entrepreneur, and Amy Cosper declined to comment regarding her departure from Entrepreneur.