‘Chum ads’ are ubiquitous on news websites both overseas and locally, but they have the potential to mislead readers and damage news brands. Dylan Reeve investigates their enduring appeal for IRL.
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Scroll to the bottom of any story on many of the world’s biggest media websites, and you’ll usually be presented with a confusing array of related stories. Some are from the site’s own archive whereas others are advertising links styled to look like the news links that surround them – known in the industry as “native” ads because they feel like a native part of the website, and most often supplied by industry leaders Taboola and Outbrain. The very same thing can be found on most of New Zealand’s big name news sites.
To me, it’s always seemed that these news organisations are either lending their credibility to these ads, or are willing to tarnish their own brand by featuring this low-quality content so prominently. But still, they remain.
Why are organisations like Newshub, the New Zealand Herald, 1News and Stuff willing to lend the authority of their news brands to ads that often seem intended to mislead readers? And why are much more legitimate companies happy to advertise alongside dubious products, or even explicit scams?
For example, at the bottom of a Newshub story, I recently spotted a smiling young man gesturing at his apparently newly purchased home. “Specialists Left Speechless After Teenager Presented How He Bought A House” proclaimed the newsy-looking headline, directly below identically-styled links to some of Newshub’s own stories. A somewhat discreet “sponsored” tag in the top left corner and the meaningless text “finmkrt” below were the only signs differentiating it and the other enticing ads from the legitimate Newshub links that surrounded them.
Curious readers, enticed by the clickbait headline, will find themselves on a website styled to look, at first glance, quite a lot like the New Zealand Herald’s. It purports to tell the story of a 15-year-old who bought a house for his mum after gaining millions of dollars online. It’s a story that the Herald would definitely write given the chance.
It then goes on, in a vaguely news-like way, to describe an alleged appearance by “Oliver” on TVNZ’s Breakfast show, where he apparently wowed host Hayley Holt with tales of turning some Christmas cash into a multi-million dollar windfall, thanks to an automated Bitcoin trading platform. Holt then tried the trading platform herself live on air, according to the story, seeing her $250 almost double in three minutes. The story even includes effusive quotes attributed to Holt (“Bitcoin is so hot right now, and if someone like me with no experience can make money from it, then anyone can too!”)
Suffice to say, there is no Oliver. He never appeared on TVNZ’s Breakfast show, and Holt (who hasn’t presented the show in over a year) didn’t test the trading application the story frequently name checks and links to. I knew this, but still insisted a TVNZ spokesperson tell me specifically: “Hayley never did a demo or promoted Bitcoin trading while on Breakfast,” the company confirmed by email.
Duncan Bridgeman, the Herald’s head of premium business content who is falsely named as the author of the story, expressed his frustration with the site and the misleading ads. “These types of sites are incredibly frustrating and unfortunately only contribute to the wave of misinformation on the internet,” Bridgeman told me by email. “Anyone who lands on these fake articles should alert the Financial Markets Authority (FMA) immediately.”
I can’t say for sure that the product, Bitcoin Circuit, is a scam (although others seem confident that it is), but it’s being advertised with an entirely fake story on a look-alike website.
Another ad, seen a little later on another Newshub story, linked to a different imitation news website that didn’t explicitly mimic an established news outlet. But it had yet another fake article promising riches from crypto currency and dishing out made up quotes. This one, allegedly promoting China’s new official national crypto coin, has actually garnered an official consumer warning from New Zealand’s Financial Markets Authority.
A spokesperson from Newshub’s owner, Discovery New Zealand, told me by email that they “reject the idea that our brand’s legitimacy is lent to anything ‘explicitly fraudulent’,” by including Taboola advertising on Newshub stories. They also clarified that they “regularly monitor the content of the ads” and report problematic ads to Taboola. It was a process the spokesperson said they were also improving. And to be fair, in the weeks since I made them aware of the bitcoin scam ads above, I haven’t seen them again.
However, a 2017 story from RNZ’s Mediawatch on a successful complaint to the New Zealand Media Council about related content ads sounds awfully familiar when compared to those I found on Newhub’s stories. In that case, the council ruled that Stuff and the New Zealand Herald had breached professional standards when they allowed Outbrain native ads that linked to similar bitcoin scams. Despite the stories being hosted on other websites, the council found that the native integration of the ads meant that readers could be misled about their origin.
“That the editors have lost control over content that includes news stories and mimics news to such a degree is of real concern to us, and we hope would also be of concern to the industry,” the council said in their ruling.
Stuff and the Herald made changes to the way they displayed the ads in response, but the fundamental nature of the native ads remains the same: they are placed alongside a news site’s own recommended stories, and are styled to look almost identical.
“When I look at it I sort of think, ‘what are the returns on this?’,” said Colin Peacock, host of Mediawatch, when I reached him by phone to ask about his thoughts four years after the ruling. “To me, it really diminishes the website. They go to all this trouble to curate a homepage, so why pollute it with that crap?”
The obvious motivation is, of course, money. While no one would disclose specifics, my research suggests the ads generate income in the thousands or tens of thousands of dollars a month for publishers. There’s a financial appeal for advertisers, too. Advertising industry veteran Vaughn Davis, owner of ad agency The Goat Farm, said their lower cost compared to traditional online advertising was one of the appeals of native ads to local advertisers, but also that the ads primed people who had just been reading news stories for longer content. “We use native advertising formats when we want to lead readers towards long-form content like blogs and so on, so it’s a good fit for the news environments that these ads appear in,” Davis explained.
Within New Zealand, the ubiquitous clickbait ads – or “chum ads” to their detractors – are mostly operated by the global ad giants Taboola and Outbrain, the two dominant players worldwide. Both were founded in Israel and are now headquartered in New York. Together, they have largely set the standard for what native advertising looks like and the type of content it links to. In 2019, the two companies announced a merger, but plans were cancelled in late 2020 after, you know, all the Covid stuff.
The highly recognisable ads, made up of an eye-catching picture and an “I must know more!” headline, are common even on prestigious websites across the internet, especially news sites where readers are already primed to feed their curiosity. The clickbait style of the ads is both influenced by, and now an influence on, the broader news media, who want to see their own promotional links fit in among the ads they carry on their website and so increasingly match the clickbait headline and image style for their own stories.
But even with the tone and style of the ads established by the norms of the native advertising medium, there remains a lot of scope in how publishers choose to integrate the ads. Across some of Aotearoa’s big news names, this variance is quite obvious.
Newshub, NZ Herald, Stuff and 1News all run native ads on the bottom of their stories from those two big players, Taboola and Outbrain. Ads from the two providers are indistinguishable in style and substance.
At the most extreme end of the scale, in terms of number of ads and their intermingling with genuine content, is Newshub, which sprinkles its own stories amongst the Taboola-delivered ads. The Discovery-owned platform also makes use of an “infinite scroll” technique to keep adding more ads to the bottom of the page as the reader scrolls. There is seemingly no end to the ads.
Stuff, having been a party to the 2017 Media Council ruling, takes a decidedly more cautious approach, with its Outbrain ads clearly labelled and more obviously delineated from its own internal story recommendations. Stuff is also the only site I looked at that features a clear statement about the native advertisements it hosts.
“Stuff’s Outbrain integration is designed to fit into the style of our own pages, while remaining clearly distinguishable from our own content with labels of ‘Advertising’, ‘Sponsored Content’ and the smartfeed logo,” said Stuff’s group sales director Steve Hutton in an emailed statement.
The NZ Herald and TVNZ’s 1News both take a fairly restrained approach, each apparently holding out just four spots on each story for native ads. On the Herald, the ads are helpfully sectioned off as “Promoted Content”, and 1News herds its chum ads into a grey “more from the web” box with Taboola branding at the bottom of each story.
The contemporary media funding model can’t really free itself from advertising. While some publishers (including The Spinoff) appeal for direct support from readers in the form of donations or subscriptions for premium content, the majority of readers are essentially seeking content for free, and in exchange the publisher hopes to monetise its readership with advertising.
It’s a model that is definitely not new, but the web has continually changed the dynamics of advertising. In years past, publishers made direct ad-placement deals with local agencies and managed the advertising on their sites directly. But as the market has consolidated, it’s become increasingly difficult to strike such deals, as advertisers use the services of large online ad providers to place their ads across many websites all at once. Publishers are now largely reliant on a small number of global giants to supply ads, effectively leasing out sections of their websites with little control over what will appear.
According to Andrea Long, head of media at advertising agency YoungShand, these ads have a reputation with advertisers, too. “Clients that I work with still go, ‘Native, hmmm, but everything I see looks like shit and has terrible imagery and this headline that’s trying to get me’,” she told me over Zoom, “but the point is that people still click on it.”
Still, like Davis, she has found the style a match for some clients, especially if they’re trying to build an audience based on certain interests. “For example, with a food company, we might bring them in on a recipe,” Long explained. “The client has lots of recipes on their website, so I might bring them [website users] over with a ‘food porn’ image and a headline that says ‘New Zealand’s best hamburger recipe’ and all of a sudden they’re on our website.”
However, straightforward ads like that were few and far between during my research, and most of the ads I saw were probably placed by overseas operators. They advertised generic no-brand products or simply tried to drive traffic to other sites where they could collect the revenue from displaying even more ads.
Advertisers like those Long and Davis work with only pay when someone clicks on a native ad, unlike many other advertisement types which also charge for every time an ad is displayed. So the fact that the ads are still there, sticking like dog poo to the bottom of every news story, suggests they must be working. People are clicking on them, otherwise the revenue would have dried up.
The nature of this advertising, especially the generic content recommendation provided by Taboola and Outbrain, means there’s little recourse available to consumers if they feel misled by an advertisement. The ads themselves are usually transient, with little indication of who the advertisers are, and complaints to the Advertising Standards Authority about misleading or inappropriate content can only be made about specific ads, not a whole style or class of ad. In most cases, ASA chief executive Hilary Souter told me, a complaint about one of these ads would first be referred to the publisher for comment, at which point the publisher would block the ad and the complaint would be considered resolved.
While Taboola and Outbrain have apparently told both publishers and advertisers they are committed to improving the quality of ads on their network, neither company replied to my requests for an interview.
For many users, the response to all these ads has simply been to ignore them; sometimes with the aid of ad blocking software or services. In the meantime, publishers who need the revenue the ads bring seem content to take whatever basic steps they can to keep the very worst of them at bay.