Israeli Media Increasingly Mixing Disguised Ads Among Content

Advertorials, or branded content, has become an effective counterweight to the decline in traditional ad spending.

Nati Toker
Nati Tucker
“Advertorials have gained momentum in the last few years because traditional advertising has lost its power.”
“Advertorials have gained momentum in the last few years because traditional advertising has lost its power.”
Nati Toker
Nati Tucker

On January 26, the Hebrew website Ynet featured an article headed “Leviathan — all the numbers on natural gas.” It was among the news site’s five most popular stories.

The story looked like any other on the site — until the end, which many readers probably never got to, where a note explained that the article was presented “in cooperation with the Israel Oil and Gas Exploration Industry Association.”

The bullet-pointed numbers end with zero, the number of drilling platforms currently operating off of Israel’s shore — a thinly veiled attack on government policy.

The report coincides with tough negotiations between the partners in the Leviathan field and the state, which wants them to divest part of their holdings to ensure competition.

The Ynet story isn’t the only example of online advertorials, or branded content, on Israeli news sites in recent years. They are paid content, like any ad: The difference is that they can be hard to distinguish from regular editorial content.

A study by the journalism website Ha’ayin Hashvi’it of the advertorial policies of Israel’s main media outlets found that nearly all — including Mako, Walla!, Globes and Haaretz Group products including the TheMarker website — allow the line between editorial and advertising to be crossed.

Some organizations, like MakoYnet, Walla! and Globes, pursue advertisers aggressively while others, including Haaretz and TheMarker are less aggressive, the study found. The latter keep a “Chinese Wall” between editorial and ads.

“Advertorials have gained momentum in the last few years because traditional advertising has lost its power,” said Erez Bergbaum, CEO of the branded content agency C. It belongs to the Publicis Group, one of Israel’s biggest ad agencies.

“All of us, as viewers, readers, Internet surfers and listeners, use the media for its content. Advertising is like a tax, and if you don’t have to pay it you’ll skip over it,” Berbaum said. “On TV you can ignore it and an Internet the effectiveness of display ads in very limited. Advertisers still need to get their messages across and more and more are using content as an additional tool.”

Internationally, the phenomenon has been documented. A survey by eMarketer of U.S. Internet sites found that 73% allowed brand content and another 10% were considering it. eMarketer estimated that advertorials generated $3.2 billion in revenues in the United States last year, a figure set to reach $8.8 billion in 2018.

No figures are available in Israel. Broadcasters are barred from accepting money for branded content but often do so without disclosure.

Television broadcasters are believed to take in 100 million shekels ($25.9 million) from branded content, but the figure includes permitted forms such as sponsorships and contests. A crackdown by regulators has reduced illicit branded content, such news items touting a product or service or paid-for interviews, to about 20 million to 30 million shekels annually.

One media executive, who asked not to be identified, estimated that in the printed media advertorial revenues, including paid-for supplements, comes to about 40 million shekels a year. They have become an effective counterweight to the decline in traditional ad spending.

Yedioth Aharonoth Group is the leader in the field, engaging in large-scale advertorial projects with government agencies, the Jewish National Fund and charities such as Keren L’Yedidut, the International Fellowship of Christians and Jews.

But the big money comes from business. Yediot has engaged in collaborative ventures with Bank Hapoalim and food manufacturers such as Osem, which have come under public pressure over high food prices.

The Finance Ministry comptroller’s office revealed a collaboration between Ynet and the Environmental Affairs Ministry three years ago. The advertorial, which also involved Ynet’s newsroom, encouraged Israelis to be more environmentally aware.

The contract stated that the editorial department would publish one or two items a week on relevant topics.

A 2-million-shekel project with the Food Industries Association involved a special supplement and regular articles in the newspaper and on the website lauding the food industry. Public criticism eventually forced the Yedioth group to disclose details of all paid content.

Websites are the biggest channel for branded content. Bergbaum estimates that spending in the segment rose 150% in five years. One industry source estimates that 30% of the revenue of the big news websites 30% come from branded content — tens of millions of shekels a year.

Business models are still in the pipeline. Mako has been posting items in cooperation with Elite (Strauss Group) chocolate and Auto magazine.

Mako has been working with Tehilla Shwartz Altshuler of the Israel Democracy Institute, to develop standards for advertorials, including disclosure. One rule would bar branded content from being mixed in together with regular editorial content.

Uri Rozen, editor in chief at Mako, said the reason the company is focusing on advertorials in because the effectiveness of banner ads has diminished over time. Branded content brings in about 15% of the site’s revenues, it’s estimated. “Money is moving to branded content,” he said.

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