2021 Media Supplier of the Year: NewsGuard

The advertising industry has always had problems with fraud, transparency, trust and brand-safety issues, but the explosion of digital media has created unintended consequences that go well beyond the implications for individual brands and their agencies, including how they impact society-at-large.

That’s because one way or another, brand advertising budgets underwrite much of the content that is seen by consumers, including the less-than-wholesome kind. You know — fake news, misinformation or hoax sites with ulterior motives ranging from social harm to just making a quick illicit buck.

Even worse, some of the ways that brands and agencies defend against their brands showing up in “unsafe” environments rely on automation — so-called keyword “blocklists” — that prevent their ad budgets from supporting responsible journalism, or news and information sites serving underrepresented segments of society.

But until last summer, no one understood just how big a problem this was.

That’s when NewsGuard teamed up with Comscore to put some dimensions around the amount of ad budgets being spent on sites publishing misinformation. The study found it is currently about $2.6 billion in annual ad spending.

This raises some big questions for the ad industry -- including how to avoid funding the harmful effects of misinformation, and how to redirect their budgets in support of fact-based journalism or publishing serving diversity audiences that were being blocked from it.

It’s not an easy problem to solve, and as it turns out, our 2021 Supplier of the Year, NewsGuard didn’t actually set out to do that, but it nonetheless pivoted in that direction when it understood the magnitude of the problem and who would best be served by fixing it.

“It’s a little embarrassing,” recalls Gordon Crovitz, a former publisher of The Wall Street Journal, who teamed up with serial media entrepreneur Steve Brill to co-found NewsGuard in 2018.

“When we started, our idea was that it was becoming impossible for consumers to get the difference between trustworthy sites and misinformation sites when they were coming through their Facebook feed, or looking at a search result. So our original focus was on news consumers,” he says.

But as Crovitz and Brill began raising money to start NewsGuard, an investment banker suggested they begin talking to the big agency holding companies as potential clients.

“We said, ‘What does that have to do with misinformation?’ And he said, ‘Well, they’re worried about brand safety.’ And then we said, ‘What’s brand safety?”

The pivot worked, because after explaining the concept to Maurice Levy, Publicis signed on as NewsGuard’s lead strategic investor, and soon the other big agency holding companies followed — because while many of them already were working with various forms of artificial intelligence and/or programmatic brand-safety technologies, they learned that NewsGuard’s approach of using professional journalists to vet and rate the trustworthiness of content sites simply worked better.

It also solved the corresponding problem of so-called “exclusion” lists — those automated keyword blocklists — that prevented advertisers from making buys on sites that generated certain words or phrases that, when taken out of the context of actual human beings, meant that advertisers were effectively boycotting some of the best news and information sites.

“There are some days when The Wall Street Journal and The New York Times have half their inventory deemed brand unsafe,” Crovitz notes, adding: “But for sites servicing the Black community, Hispanic, Asian LGBTQ+ communities, some days 80% of their inventory is deemed brand unsafe because of the keywords being used.”

By working with agencies to use its ratings as part of “inclusion” lists, NewsGuard has helped redirect ad budgets from nefarious publishers into ones that are truly serving their communities.

In fact, an analysis conducted by IPG Mediabrands — which along with Publicis and Omnicom has become one of NewsGuard’s biggest customers — showed that by utilizing NewsGuard’s inclusion lists it was able to decrease the CPMs it paid for news and information audiences, while more than doubling the click-through rates for their ads.

“It makes sense that if you stop advertising on crazy hoax sites you’re bound to have greater engagement and a lower CPM as a reflection of the pricing for even the highest-price news sites,” explains Crovitz.

The timing of the solution couldn’t be better for the ad industry, which has also come under scrutiny from consumers, advocacy groups and even regulators and lawmakers for helping to fund questionable information. 

A variety of studies from Edelman’s Trust Barometer to Ipsos MORI and others has shown that consumers are holding brands more accountable for the media they support with their advertising dollars.

And while big social platforms like Facebook, Instagram and YouTube take much of that heat, a study conducted by Advertiser Perceptions in September found that advertisers and agency executives now consider the overall harmful effects of a publisher’s site to be a bigger reason for cutting their ad spending than specific brand-safety issues.

And while some of the “fake news” debate might seem to be related to politically partisan issues, NewsGuard has documented that from an economic point of view, hoax sites related to things like misinformation about healthcare is an even bigger and more pervasive problem that is also likely harming society.

On average, about 40% of all the news and information sites assessed by NewsGuard get a “red rating” categorizing them as “untrustworthy,” but the most prevalent ones are related to health, not politics.

“Even before COVID we found that the highest category of red sites were related to health care, not to political propaganda,” recalls Brill. “It’s not that RT and Sputnik aren’t important, but health hoaxes were all over the place and this was before COVID. Post-COVID, it’s obviously accelerated.

“And that’s when we realized this wasn’t just a matter of people using it for propaganda, it was that misinformation is a business. And it’s a $2.6 billion business when it comes to advertising.”

NewsGuard continues to work with its agency partners and advertisers, as well as the entire daisy chain of ad-technology companies that power brand safety, and it has begun moving into social media and even browser software in an effort to also fulfill its original promise of helping news consumers understand the veracity of the information they are accessing.

It’s also moving beyond digital, announcing an exclusive deal with IPG Mediabrands to launch a product in time for the 2022 upfront media-buying season that will rate the trustworthiness of news networks and their programming.

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