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Intel ad subsidies raising
eyebrows
By Michael Kanellos
January 16, 1998, 1:10 p.m. PT
A multimillion-dollar advertising program from Intel
(INTC) is heating up the debate on where
journalism ends and advertising begins on the Web.
At the center of the debate is the "Intel Inside
Optimized Content" program, a four-month-old
campaign that essentially provides additional
revenues to Web publishers that create special
pages touting the performance benefit of the
Pentium II processor.
The problem, critics say, is that it opens up news
organizations to conflicts of interest. To receive the
maximum amount of the program's funds, publishers
have to create a Web page with content that
promotes the Pentium II processor and feature a
front-page link to a Pentium II demonstration.
Some critics, including the American Society of
Magazine Editors, charge that the program begins
to blur the line between advertising and editorial
content because the pages in question are
integrated into the Web site itself and not typically
separated out as advertisements. The financial
relationship is also not disclosed on these sites.
CNET: The Computer Network, the publisher of
NEWS.COM, is not currently participating in the
program but will. Intel is an investor in the
company.
Chris Barr, CNET's editor in chief, said the
Pentium II pages will be more clearly differentiated
from news stories. "We will probably do it as an
'advertorial,'" he said, referring to a special
advertising section.
Supporters claim that the program does not differ
from any other type of advertising relationship.
"We chose our stories without regard to
advertisers," said Mark Bernstein, vice president
and general manger of CNN Interactive. "It's not
like it's the front-page story."
CNN and Ziff-Davis currently receive funds under
the program while computer publisher International
Data Group has declined participation, claiming
conflicts of interest.
Since beginning only a few years ago, the "Intel
Inside" program has spent about $3.4 billion in
promoting the ubiquitous logo and, of course, Intel's
microprocessors.
While Intel spends money directly on television
spots and other advertising, a substantial portion of
the Intel Inside money is spent through its partners.
Computer manufacturers such as Compaq receive
Intel Inside funds as reimbursement for running ads
touting their own computers as well as Intel
processors.
The practice is widespread in the industry and
explains why advertisements touting computers will
also feature slugs for Intel or Microsoft.
In September, Intel began to allocate
reimbursement funds for Web advertising. Intel said
it would reimburse computer advertisers up to 50
percent of its Web advertising costs on selected,
approved sites. "It has to be in good taste,"
explained Adam Grossberg, an Intel spokesman.
Intel said it would offer an additional 25 percent
reimbursement if ads were placed on a site that
featured the benefits of the Pentium II. These pages
must be approved by Intel, perform better with a
Pentium II, and bear a notice saying the pages run
better with the processor.
Critics raise concerns that these Pentium II pages
constitute forms of advertising but are not labeled
as such.
But CNN's Bernstein points out that other
technology companies provide similar funds.
Further, the pages subject to the program do not
affect news coverage. Earlier, MSNBC contained a
feature that would not allow readers to view certain
news stories in their full glory unless the reader was
using Internet Explorer. "We're not doing anything
like that," Bernstein said.
How advertisers feature these Pentium II enhanced
pages so far has varied. CNN has created a
three-dimensional globe that, when clicked, locates
political unrest around the world. Ziff-Davis's
Pentium II-powered pages act as a 3D site map
that complements the regular iteration. While both
companies include the explanation that the
particular pages will run better with the Pentium II,
the advertising relationship is not disclosed.
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