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Pay to Play: Uncovering Online Payola
A three-month study of the online technology publication industry uncovers pay-to-review tactics, viral marketing and a few beacons of light
During the 1960s a new term was born into the music industry: Payola. A combination of the words "pay" and "Victrola," payola represented an increasingly large problem in the music industry: record companies paid radio stations to play and promote new records.
The immorality of paying radio station disc jockeys to air music did not become apparent until investigations by Federal Trade and Federal Communication Commission. Several deejays from the era were eventually found guilty of commercial bribery charges and deliberate legislation was eventually proposed, and sanctioned, that specifically banned the practice of payola in the U.S., with stiff consequences.
Title 47 of the United States Code details specific federal legislation for radio, telegraphs, communication satellites, and cable TV, but it does not address similar payola schemes with regard to internet publications. There are no legal ramifications for online publications that accept profits in exchange for pay: online payola.
Jasper Schneider, owner of enthusiast hobby site Sudhian.com and a practicing attorney at Schneider Law Firm, reflected on his experience in dealing with advertisers and his legal background. "Without any uniform ethical standards or statutory law governing the online publications, online payola certainly exists.” He continues, “If it doesn’t exist expressly, it is often implied when dealing with certain advertisers.”
Over the past three months, DailyTech put together a series of faux companies, product portfolios and trademarks. In a combination of phone and email correspondences, our team of journalists set out to find illicit and unethical review behavior in the English-print, computer hardware review industry.
Specifically, these journalists looked for publications that were:
Manufacturers pressure publications from all sides when attempting to secure headlines and positive reviews. No money actually exchanged hands during this analysis, and the working relationships lasted less than a week.
- Willing to sell advertisements (receive funds) in exchange for publishing content.
- Willing to sell advertisements (receive funds) in exchange editor's choice awards.
- Willing to offer viral marketing in exchange for cash and resale hardware.
There are approximately 150 circulated English-print technology websites; our team specifically targeted the 35 largest publications. We determined the size of these publications via Alexa’s online index and publication-supplied web statistics. DailyTech was included among this list.
Of 35 online computer-related publications, 23 (66 percent) refused editorial influence in exchange for advertising. Of remaining 12, seven publications (20 percent, Fig. 1) agreed to editorial service in exchange for advertising or cash.
To the credit of all publications surveyed, no website would accept additional funds in exchange for award. However, it should be noted that our team discovered several instances of questionable ethics in a very short time span, without even supplying the publications product or payout.
The following response from an editor who also acts as the sales is an excerpt from a publication that represented the typical response of all border-line publications:
"The people who do sponsor the site, who advertise and keep good relationships with us, they will get priority on reviews. So if we get a motherboard in from you guys and one from company X, and you advertise and company X does not, we'll review your product first or more in-depth or at the launch time, which ever would get the most exposure. It doesn't really affect the content of the review exactly, but it definitely affects whether or not we'll spend the extra time with it."
14 of the 35 sites polled used independent sales teams: editorial staff is not responsible for advertising content at these publications (Fig. 1). All sites that used separate sales staff would not influence editorial content even when tempted with several thousands of dollars of advertising perks and free hardware.
Adam Eiberger, a non-editorial sales representative from The Tech Report, parlayed the most succinct argument. After an offering of several thousand dollars worth of advertising, in exchange for a news post and review, Eiberger responded:
"We have a real strong policy at The Tech Report of what we like to call separation of church and state, where essentially the editorial content is separate from the marketing and the advertising ... you are not going to be able to buy a review or an article.”
Four external sales teams represented 11 of the 35 sites polled. Each sales team refused our requests for additional content and illicit reviews.
Website age demonstrated significant impact for payola (Fig. 2). None of the five publications founded before 1998 would accept any form of compensation in exchange of content. Granted, it should also be noted that these older publications all used non-editorial sales representatives.
Geographical region showed little to no impact for online payola (Fig. 3). By volume, the highest number of online payola came from North America, though it should be noted that the majority of English-print publications are also found in this region.
European websites also had its own examples of online payola. The following is a conversation between DailyTech intern Gabriel Ikram, posing as a sales agent for a motherboard company, and an editorial contact for a publication:
Ikram: "We'd be willing to pay a little more for ads if you can get us some articles on ******"
Website size also showed some impact on payola trends (Fig. 4). When divided into fifths, payola only occurred in the middle three-fifths. The media size of these publications was approximately 5 million to 10 million page hits per month.
******: "Ok, I can help arrange that."
Ikram: "If we could spend a little more money [on ads] could you get us maybe a couple more articles?"
******: "Yeah, that's fine, that's fine."
The following is an email response from an editorial sales contact representing a another website:
"Also let me know about the $1,500-$3,000 per site as that money does go a long way for us! We'd be more than happy to give you 2 to 3 months of advertising and the review in exchange for that!"
It’s easy to see why payola can damage the industry as a whole, as well as enable a slippery slope of downward ethical spiral. During the investigation, three publications – all of which had already agreed to some level of online payola – were willing to pose as non-staff forum members and hype the upcoming product at the publication’s internet forums.
Once presented with the data for this article, Schnieder paused before responding. “I think if you look back even five years, you would have seen this type of thing be much more common than it is today.” He concludes, “Like most things, the marketplace will eventually weed out the businesses and websites who choose to operate in this manner.”