Guardian Labs: how do we know what is sponsored in the media?

Guardian Labs

By Hannah Green

Paid content is nothing new. But when ‘Guardian Labs’ appear in a format virtually indistinguishable from a regular article, just how in keeping is it with the newspaper’s self-avowed devotion to fair, open reporting?

Is ‘ethical’ advertising possible at all?

Since you’re here …

… we have a small favour to ask. Any Guardian reader, zealous or casual, will be familiar with the perennial request for support which appears at the base of each and every online article. In 2019, the newspaper was able to announce that it had broken even for the first time in three years, thanks in large part to donations and support from its readership.

However, there is another, less examined aspect to the Guardian’s business model: their boutique native advertising service, Guardian Labs.

New solutions

Reluctant to follow in the footsteps of other major media sites and instate a paywall, the Guardian declares itself committed to “information that’s grounded in science and truth, and analysis rooted in authority and integrity”. Such reporting comes at a cost, and the Guardian’s not-for-profit status and rejection of corporate interests or controlling shareholders has made it clear that new, innovative solutions are necessary. Unfortunately, the paper was forced to sell off side businesses between 2007 and 2014, announcing that staff cuts would be made in 2016. In order to reduce further financial losses, a membership scheme was launched in 2014, which was considered successful four years later, when over 1 million subscriptions and donations had been made.

In addition, the Guardian is supported by various foundations which fund specific journalistic projects or topics, like the Bill & Melinda Gates Foundation, which supports the Guardian’s Global Development section, or the Joseph Rowntree Foundation, which supports documentary films about poverty in the UK.

In 2017 the Guardian began its ‘content studio’ overhaul, producing the Labs format we see today. Unlike the sale of ad space, Labs are ‘native’: created in-house by a dedicated team, whose commercial features desk is commissioned by brands to produce content.

A quick look at their pages today reveals a plethora of articles, videos and photo galleries, on topics such as working from home (paid for by Vodafone), the importance of creative play (sponsored by Lego), and buttery recipes (courtesy of Kerrygold). Other clients include Canadian and Swedish tourist boards, Heinz and TK Maxx.

This article, sponsored by TikTok is an example of how they operate. Despite having a few pointers on the page to indicate that the article is sponsored, the author at no point mentions that she has been commissioned to write about meditation and TikTok, as the reader is led to believe that she is simply trying out a new internet fad à la Vice’s endless supply of ‘I did [insert activity] so you don’t have to’ articles. Over the course of the article, she tries out various meditation tips as shared on TikTok, along with figures about its growing adult user base, concluding that meditation is no easy task, but with small, bite sized videos (such as the ones available on TikTok), she can begin to learn how to quiet her busy, millennial mind. What better way to recruit more young adults onto a platform almost invariably associated with Generation Z?

How effective are Guardian Labs?

It is difficult to say exactly how effective the Labs are, but as consumers look at native ads 53% more than display ads, and with native ads offering an 18% increase in purchase intent, they are likely to bring positive returns. According to a Digiday article from 2018, the Guardian’s digitised ad revenue that year brought in £108.6 million, and in 2017 a global survey found that news outlets got 20% of their ad revenue from native content, with this set to rise to 36% by 2021. While there was no specific figure available for Guardian Labs, the average value of its larger ad deals are over £100,000, so it is likely that Labs revenue make up a sizeable percentage.

With the implementation of a new marketing leadership team at the Guardian in mid-November, we seem set for further development of this advertising model. The team all emphasised in their statements the importance of “a real connection with our readers”, delivering “the best of the Guardian”, and a focus on advertising that is ‘creative, genuine and bold’.

It looks like Labs are here to stay, but for a newspaper whose core selling point is integrity, the question remains: how ethical is this practice?

Branded content 

The Guardian makes much more obvious attempts to be an ‘ethical’ outlet than most, being the only British national daily media outlet which has its own annual social, ethical and environmental external audit. Its finances are managed by the Scott Trust Limited, with the explicit goal of maintaining editorial independence by ensuring that the Guardian is never taken over by a for-profit media group.

The Advertising Standards Authority’s regulations state that “marketing communications must be obviously identifiable as such”, and that they “must make clear their commercial intent, if that is not obvious from the context”. Creating engaging copy is crucial to a successful advertising campaign, but when that copy is purposefully virtually indistinguishable from regular reporting, this cannot help but cast doubts on the ethics of the Guardian Labs.

Despite this grey area, readers are not stupid: a 2018 study from Stanford University found that consumers are generally very good as distinguishing native ads from digital content, although this did not stop the ads from exerting a “significant influence” on shopping behaviour.  Researchers concluded that “even in a time of advanced analysis, ad exposure continues to have a deeply subtle, and thus harder-to-quantify, effect”.

The future of advertising?

Although straddling a thin line between advertising and reportage, transparency and efficacy, native ads like Guardian Labs are here to stay as media becomes increasingly digital. Watchdogs and advertising standards authorities will have to work harder to keep up with policing this constantly evolving field.

Although native ads are mostly harmless, and normally easy to identify, there have been a few worrying hints at what the practice is capable of. In 2018, after a series of damning articles appeared on Reuters about people trafficking and the fishing industry in Thailand, another article appeared on the same website, sponsored by Thailand’s Ministry of Foreign Affairs. It highlighted the positive efforts of the Thai government in clamping down on slavery, despite evidence from a few months earlier insisting that the reforms were not enough. Content sponsored by toy companies or butter distributors may influence consumer behaviour, but that’s not all that’s at stake – in some cases, native ads may even manipulate how we view human rights abuses.

The Guardian, like many media outlets, is struggling in the wake of Covid-19. In June this year, it was forced to announce plans to cut 180 jobs. Without corporate or conglomerate backing, it is up to self-avowedly ethical companies such as The Guardian to balance their precarious income streams with “holding the powerful to account and covering stories that would otherwise be ignored, and, [they] hope, helping to build a fairer world”. Whether this is worth the confusion, lack of transparency or potential harm caused by native ads, it is up to them to decide.