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Nov. 18, 2013, 11 a.m.

Even as they monetize consumer news, the AP says selling content to members is its core business

“One of the biggest issues that every supplier of content faces today is that the market for news around the world is flat to declining. As we looked forward, we felt as if we needed to have other positions available to us to monetize the content.”

It was March 2008 when Steve Jobs announced that third parties would be allowed to develop apps for the iPhone. Three months later, the Associated Press launched one of the first mobile apps for iOS.

Being ready with an app that quickly would have been a praiseworthy move for any media company, but for the AP, it was something more. Although billed early on as a Mobile News Network, the app essentially became the AP’s flagship consumer-facing product. For a company that has considered selling content to other news outlets its primary business model for 165 years, that’s no small enterprise.

Which is why, a few weeks back, the AP’s senior vice president of products and digital strategy, Jim Kennedy, told AdAge that the AP would begin experimenting with sponsored content on its mobile app and hosted web pages.

This isn’t AP’s first go-round with advertising. The AP began experimenting with display ads in the ’90s, when they first launched a general news service, Kennedy told me in a phone conversation; the mobile app already bears banner ads. About a year ago, someone at a public relations firm reached out to the AP with the suggestion that they try selling sponsored tweets. The AP went for it, and they’ve tried a few branded tweets during major events since the beginning of 2013.

Now, Kennedy says, the AP wants to expand the breadth of its native placement offerings in hopes of continuing to monetize content in new ways: “We’ve tested the waters this year with sponsored tweets. The way we look at it is to pull all of it together, making it possible for a sponsor to be across the whole environment of AP mobile, the websites that we host, and the social accounts.”

As with the sponsored tweets, the AP’s other native ad placements will only appear around major events like the Olympics or Daytona 500, which is when the apps and hosted sites — all but one of which are sports themed — get the most traffic.

“We’re aiming it at big events because we think it’s where we have the most business potential,” says Kennedy. “We don’t want to do native placement for the sake of native placement. If we’re going to do it, we want it to be around events, where a sponsor can take advantage of that situation for its own storytelling, as opposed to just slating in banners’ positions.”

Kennedy is appreciative of what other news outlets — including Forbes, The New York Times, and The Washington Post — are doing with branded content, and says he ultimately thinks the shift towards storytelling in advertising portends good things for the industry.

“I saw a really great example of native advertising in The New Yorker print edition a week ago. A Citibank ad that had a really attractive info graphic about cities around the world. In the back, there was a Citibank ad, but the graphic was really legitimate information. That’s the sort of thing we’re trying to achieve here,” he says.

(If you’re interested, Kennedy added in a follow-up email: “Fine print says Citi got the research and data from the Economist Intelligence Unit, which is another good example of the content marketing phenomenon. Citi sought out help from the custom arm of a major publisher.”)

All of the AP’s sponsored content will either be created by the advertisers themselves or by third parties hired by the AP. Some might also turn to the wire’s visual wing AP Images, which Kennedy says has recently “branched off into custom content development” and could function something like an in-house creative team. He emphasized that no content will be created by AP editorial staff, and that they plan to err “way on the conservative side” when it comes to labeling the sponsored content as such.

AP iPhone tile navKennedy is particularly excited about two opportunities for branded content. “When you open up the app on iOS, you see a tiled navigation scheme. Those tiles can be used as category navigation, but they can also be used as gateways to sponsored content,” he says. So imagine if, instead of sports, there was a custom tile tying a product or service to coverage of the Olympics. The AP is also working on headline positioning as sponsored content, according to Kennedy. In that instance, after clicking through to a category, one of the half dozen headlines that you see would link to a brand post.

He didn’t have as many specifics on what the content would look like on the hosted sites, which include verticals focused on college football, college basketball, auto racing and the NFL. At the same time that these microsites were launched in 2012, the AP also bulit a general news site, called The Big Story, on the same platform with the goal of one day shifting all the AP’s affiliate organizations to the new platform.

“We needed a way to monetize the social traffic to some extent,” says Kennedy. “We’ve pointed our social traffic to the story pages on that site. We don’t really consider it a destination.”

These sites already have widgets, like polls, headlines, photos and power rankings, which member sites can use. Those widgets carry advertising, the revenue from which the AP shares with its affiliates. In theory, the sponsored content could work the same way.

But even with the revenue share, it’s imaginable that the AP’s affiliates, who use AP content to generate their own advertising revenue, would be put off by the AP’s reach into the advertising space. Kennedy said they do get occasional push back from members, but stressed that the native placements would only be sold in very specific, limited circumstances.

“We needed to experiment with new business models. One of the biggest issues that every supplier of content faces today is that the market for news around the world is flat to declining, because it’s being oversupplied by not only traditional suppliers, but by all of our customers syndicating in the marketplace along with us,” he says. “That has an impact on everyone’s ability to sell, and certainly has an impact on price. As we looked forward, we felt as if we needed to have other positions available to us to monetize the content.”

It’s certainly true that everyone is thinking about new ways to monetize content, but does that necessarily mean consumer-facing products for news networks? Reuters, of course, recently scrapped what would have been their project aimed at drawing readers directly to their content. But top-level complaints about Reuters Next appeared to be centered on expense and execution; the company says it retains its goal of raising its profile with a “direct consumer audience.”

If the AP shares the same goals, it’s clear that their route to those consumers, for now, is through mobile. Kennedy says the mobile app’s user base tends to be affluent, highly educated, and younger on the whole than the average news consumer. It’s been downloaded a total of 12.5 million times and receives around 3 million unique views a month; Bill Keller checks it every morning.

“For us, this is a sideline,” says Kennedy. “For the AP, our main business is selling content to other media outlets. We’re only in this for incremental revenue.”

Photo of a currency exchange advertisement in India by AP/Rafiq Maqbool.

POSTED     Nov. 18, 2013, 11 a.m.
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