Wall Street Journal embraces native ads

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The Wall Street Journal announced the launch of a new content division today: WSJ. Custom Studios, which global head of advertising Trevor Fellows described in an announcement as "an innovative, intelligent and flexible suite of capabilities that will help market-leading brands develop even deeper relationships with their clients and our readers."

WSJ. Custom Studios will include a native advertising component called Narratives, the content of which will live on wsj.com but will be "clearly and compellingly delineated from news and editorial content," according to the announcement.

The move shows the Journal wading into waters that managing editor Gerard Baker had previously described as a "Faustian pact" between news outlets and brands.

“Our readers trust us, and the WSJ. Custom Studios team has created clear and thorough labeling guidelines around the advertiser’s content in order to protect that trust,” Baker said in a statement. “I am confident that our readers will appreciate what is sponsor-generated content and what is content from our global news staff.”

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In the face of diminished traditional ad revenues, a growing number of mainstream news outlets are adopting native advertising, which presents brand-created content in a storytelling format. The Journal's parent company, News Corp., said last month that advertising revenues during the most recent quarter declined in the "low- to -mid-single digits."

"The Journal's effort marks a dramatic shift for a news organization that practically obsesses over the way ads are labeled on its site," wrote Michael Sebastian of Ad Age, which first reported the news.

"News Corp has been clear about the opportunity native advertising/branded content provides all our news brands globally," senior vice president of strategy Raju Narisetti said in a Q&A posted by the company's public relations team. "[W]e have been transparently and aggressively pursuing such opportunities, working closely with both big brands and their creative/advertising agencies."

Narratives will lift off with a three-month partnership between WSJ. Custom Studios, Brocade, and the client’s San Francisco agency, Godfrey Q and Partners. The project will include twelve articles starting March 11 that focus on game-changing technology and data.