Stagwell research shows advertising next to news has no negative impact for brands

October 9, 2024

At it’s Future Of New Summit in London, Stagwell released new UK-based research that debunks the myth that advertising next to news content—whether it be politically charged, crime-related, or otherwise—negatively impacts a brand’s image. 

Mark Penn, Stagwell’s Chairman and CEO, shared the results of the comprehensive study involving 70,000 participants in the US and UK. He encouraged the audience to challenge the prevailing industry assumptions about Brand Safety and to support journalism by investing advertising budgets in quality news environments.

Why support news?

A self-professed news junkie, Penn described Stagwell’s mission as a defense, promotion and celebration of the news industry, explaining how newsrooms have often been first in line for budget cuts. Penn argued that the industry needs advertisers to reverse this trend and to challenge the growing tendency of major brands to avoid placing ads next to news content, even when the content is not harmful.

During his own career, Penn observed that some big brands were avoiding news altogether, despite the fact that news sites were performing well. ‘Brand Safety’ measures, such as outdated blocklists that block what are considered potentially harmful keywords, have created a damaging cycle where journalism is systematically demonetised in the name of protecting the brand. In a time when newsrooms cannot be maintained by subscriptions alone, high-quality journalism becomes unsustainable if advertisers shy away from news.

How are brands perceived next to news?

The core of Stagwell’s research focuses on how brands are perceived when their ads are placed adjacent to various types of news content. Conducted in partnership with HarrisX, the UK study surveyed 22,116 adults. The goal was to measure the impact of advertising on news sites and to examine whether appearing next to certain news stories had any statistically significant impact on key brand metrics like purchase intent and favorability.

The study tested six different ads across eight categories of news stories including politics, crime, business, entertainment and sports. Participants saw a combination of one type of ad and one type of news content before being asked a series of questions about their perception of the brand in terms of trustworthiness, customer care and purchase intent.

Consistent results across all types of news content

The study produced strikingly consistent results across all types of news content. Regardless of whether the news was about politics, crime or entertainment, the ads performed similarly. This contradicts a widespread belief among advertisers that associating with potentially “controversial” or negative news could harm a brand’s image.

For example, when looking at metrics such as purchase intent and brand favorability, there were no significant differences between ads placed next to “brand safe” content such as entertainment or sports stories versus those placed next to more serious or negative news, such as political or crime stories. The only notable exception was a slight positive boost for ads appearing next to business news, particularly amongst high earners, who responded more favourably to ads in that context.

Breaking the vicious cycle

The key takeaway from Stagwell’s research is the need to rethink the way advertisers approach news content. Over time, the concept of “brand safety” has expanded beyond its original intent—keeping ads away from truly harmful content like hate speech or explicit material. It now includes avoiding any news content that may be perceived as negative or controversial, which is misguided and detrimental to journalism.

Penn described it as a vicious cycle: quality journalism tackles hard-hitting issues, but brands avoid it, leading to a decline in advertising revenue for news outlets. This, in turn, forces journalists to resort to clickbait or lower-quality content in order to attract the dwindling pool of advertising dollars. This cycle also opens the door for misinformation to flourish, as quality journalism struggles to compete financially.

Supporting the virtuous cycle  

By supporting quality journalism through advertising, however, brands not only contribute to a better-informed public but also position themselves next to content that resonates with educated and affluent audiences—key demographics for many businesses. News consumers, the study found, tend to be more affluent, more educated, and have higher disposable incomes –  desirable traits in an audience for advertisers.

Stagwell wants to encourage a ‘virtuous cycle’, where brands reinvest in quality news, leading to better-funded journalism, more in-depth reporting, and a more informed public. This approach, according to the study, aligns well with the business interests of many brands by giving them access to engaged and educated audiences, while also fulfilling a social responsibility to support the free press.

For advertisers, the takeaway is clear: instead of avoiding news out of fear of reputational damage, they should be making decisions based on the quality of the audience and the relevance of the content. The research shows that ads placed next to news stories—whether good or bad—perform just as well, if not better, than ads placed next to non-news content. 

As newsrooms continue to face financial pressures, the role of advertisers becomes even more critical. Stagwell’s research highlights that it is time for brands to step up and support journalism—because the future of news depends on it.