By Corinne Jurney

Historically committed to a spirit of entrepreneurial capitalism, Forbes Media is taking a page out of its own book–or more aptly now, from its own website. And it’s paying off in a big way.

Forbes Media published its first magazine 98 years ago, and was under the control of the Forbes family for nearly a century. The reign of the Forbes family ended with the sale of a majority stake in the company to a group of Asian investors.

A reported sum of $475 million, bought Hong Kong-based Integrated Whale Media Investments (IWM) majority ownership of the business media giant last July. Anchored by Integrated Asset Management, an investment firm that specializes in technology and telecommunications investments, the major investors are Tak Cheung Yam and Wayne Hsieh. The sale fortified Forbes’ brand in China, where it sells its other flagship magazine, Forbes Asia and has a Chinese language website. The Forbes family retained an estimated 20-percent stake in the media company during the sale.

New models

Forbes has largely been spared many of the revenue problems crippling the traditional media industry due to Chief Product Officer Lewis D’Vorkin’s innovative vision and leadership. D’Vorkin embodies the entrepreneurial spirit Forbes is known for lauding, by developing and implementing new business models for advertising, content-creation and labor. D’Vorkin pioneered a new advertising frontier and is credited with inventing the term “native advertising,” formerly known as content marketing.

Traditionally, a chief product officer is not the person charged with determining the direction of a media company, but D’Vorkin’s position at Forbes is an exception.

“As far as my title and role, I’m the only one that I’m aware of who has the kind of title and role in the world of traditional media,” said D’Vorkin. “It’s definitely unusual. What it does for our company, and has for last five years, is really stress the fact that journalism is placed in context of products.”

D’Vorkin said journalists have been hesitant to adopt the mindset that the product that a story is placed in is just as important as the story itself. But, the product is what advertisers spend money to be in, he said.

“Continuous new product development has changed the makeup of staff, the culture of the organization and has set us apart from our traditional competitors in business category,” said D’Vorkin.

The magazine industry fits the definition of perfect competition, said Penny Abernathy, Knight Chair in Journalism and Media Economics. She said the business and finance segment is very attractive, which means it could attract new entrants, which are totally digital.

“In that state, the only barrier to entry into a market is the loyalty of your customers,” she said.

As of September 2014, Forbes’ online operations made up 65 percent of total advertising revenue and digital revenue was growing at 20 percent.

Advertisers in the front seat

Through Forbes’ integrated advertising platform, BrandVoice, businesses have joined the content-creating party, both in print and online. Launched in 2010, BrandVoice allows businesses to publish content under the same format used by staff writers and contributors. This model makes the transition between reading editorial and sponsored content, nearly seamless and makes the ad experience less disruptive. In print, companies can purchase space next to contextually-relevant editorial content, positioned to appear as an extension of the article or story. On the website, advertisers receive their own home pages, where they can publish columns, articles and stories of interest to their target audiences.

Native advertising is D’Vorkin’s solution to the declining number of advertising dollars being spent in magazines. D’Vorkin defines the term in an April editorial as “advertisers telling stories related to what they do without slavishly resorting to sales speak.” The CPO has continually used his editorial space in print and on his digital home page to defend Forbes’ integration of native advertising and laud its value.

“Marketers have insights and understand their business and have things to say and want to connect with an audience,” said D’Vorkin.

Some of Forbes’ reporters and editors were skeptical when the company launched BrandVoice, but D’Vorkin said he assured them then that their jobs wouldn’t change and this has proven true.

“You’re going to report, make phone calls, write, investigate–you’re going to do what you’ve been doing. Online and in the magazine, we’ll have space for advertisers to kind of do the same and it will be clearly labeled that it’s by you or that it’s by marketers,” he said

D’Vorkin said BrandVoice has allowed Forbes to expand its staff, which is unusual in today’s media business. D’Vorkin oversees about 130 people in the editorial and product departments.

Winning with native

Cashing in as 30 percent of Forbes’ advertising revenue, BrandVoice has been a staggering success for the company’s bottom line. The platform has continued to evolve. It launched home pages for companies to publish on, last year. This year, it introduced Pulse, an interactive visual program advertisers can utilize to further engage audiences. Toyota, which also has a BrandVoice home page, is the first adopter of Pulse.

Other publications have taken notice of Forbes success and have followed suit. Both the Wall Street Journal and The Washington Post, recently hired former Forbes standouts to learn the D’Vorkin way. Forbes’ main competitors, Bloomberg Businessweek and Fortune, have also begun investing in native advertising. Business Insider Intelligence estimates spending on native ads this year will reach $7.9 billion and will grow to $21 billion by 2018.

Since overhauling Forbes’ advertising and content platforms, unique visitors to the site’s business channel increased 393 percent, from 2.9 million to 14.3 million, Dvorkin told a conference audience in 2014.

Online, more than 6,000 BrandVoice posts have been published. BrandVoice has garnered more traction in certain industries, including Business and Technology, where between 20 percent and 25 percent of the main landing pages are sponsored, respectively. Notable companies utilizing the homepage feature include SunGard Availability Services, CenturyLink and NetApp. The Lifestyle and Leadership sections each have only one sponsored home page.

“The way I see it, there are two levers, hot and cold, in a bathtub: content and advertising,” said Brad Thomas, editor of Forbes Real Estate Investor. “The most successful companies have the right combination coming out of the spigot. And I think Forbes has that.”

Pay to play

Pennsylvania-based SunGardAS is an information services company that utilizes Forbes’ BrandVoice and the home page feature.

Joe Clancy, digital marketing manager at SunGard, said BrandVoice gives his company the opportunity to focus on delivering a consistent message to a wide audience. The only drawback lies in having to sacrifice design and creativity, which advertisers have traditionally relied on.

“Forbes is incredibly powerful,” Clancy said in an e-mail. He said Forbes’ 5 million Twitter followers and the BrandVoice platform allows SunGard’s content to gain page rank traction with targeted keywords.

“For example, if we wanted to write a piece around Disaster Recovery Planning, once it was launched on Forbes BV it would immediately show up on Google’s News Tab (on page one),” said Clancy.

Clancy said SunGard’s strategy with native advertising is to tell readers what the company does without coming off as too ‘sales-centric.’ Clancy said SunGard also wants readers to know “that we are keenly aware of current events and issues that are largely unrelated to our business,” including lifestyle and general workplace commentary. He the company has not yet pinpointed a way to quantify its results with BrandVoice.

“We have witnessed a great deal of page views and exposure for our business,” said Clancy. “We are still struggling with how best to measure it from an ROI perspective, but there is no question the tool puts our brand out in front of more people every day.”

Surprises abound in print

D’Vorkin said his initial vision for BrandVoice was primarily digital, but demand for space in print has surged. Forbes has run 50 two-column BrandVoice stories in print, “all clearly labeled,” according to D’Vorkin in an April editorial.

Forbes’ February issue might have baffled readers, who opened the front cover to find yet another cover. The second cover was sponsored wholly by AT&T, which also sponsored a two-page story in the popular “Top 30 Under 30” issue. D’Vorkin said the company received no pushback from readers in response to the dual cover. The magazine’s list issues are particularly attractive to advertisers and are an area for growth, he said.

Blurred lines

With the increasing popularity of BrandVoice among advertisers, Forbes is faced with maintaining the journalistic prestige of its masthead.

Lucia Moses of DigiDay wrote that “by letting advertisers post content produced for them by other publishers, there’s the possibility that they’ll dilute their message to the Forbes readership. The ecumenical approach to native also points to just how blurry the lines between advertiser, publisher and ad content creator have become.”

Thomas, also a Forbes contributor, said he does not think publishing his content alongside native advertising diminishes his, or Forbes’ brand. He said Forbes’ content has consistently remained high-quality throughout the changes in the company.

“I keep looking for signs that the quality could diminish, but I think it starts at the top with Lewis,” said Thomas. “When you have someone at the top with the same aspirations for quality, it trickles down.”

Speaking for yourself

The social journalism platform boasts an army of more than 1,000 contributors who publish articles on the website, covering a vast array of topics. One-third of these authors are freelance journalists, but the remaining contributors are experts, entrepreneurs, business professionals, academics and authors. Allowing these people to publish under Forbes’ brand gives them credibility and space to demonstrate their knowledge.

Inevitably, conflicts of interest pervade this model. Similar to journalists promoting their intangible brands, these contributors often use Forbes’ platform to advertise tangible brands, including, financial services, books and trusts. Forbes’ niche newsletters are written by professionals, who share insights with readers, demonstrating their prowess in their respective industries and thus promoting their own funds or companies. The contributors are meticulously vetted, said Thomas, who went through a two-year process to be approved as a Forbes contributor.

Thomas, who writes Forbes’ biannual commercial real estate investment newsletter, is an investor in this sector and is planning to launch or co-invest in an ETF. He is also writing a book about Donald Trump’s empire. Thomas’ newsletter dispenses advice for investing in REIT and an investor looking to enter this market, would be likely to consider investing with a fund or trust Thomas is affiliated with. His role also gives him a channel through which to promote his book when it’s published.

Define the line

The American Society of Magazine Editors released new guidelines for native advertising in 2015:

ASME also recommends that native advertising on websites and in social media should be clearly labeled as advertising by the use of terms such as “Sponsor Content” or “Paid Post” and visually distinguished from editorial content and that collections of sponsored links should be clearly labeled as advertising and visually separated from editorial content.

On websites populated by multiple sources of content, including user-generated content, aggregated content and marketer-provided content, editors and publishers must take special care to distinguish between editorial content and advertising.

D’Vorkin’s outlined vision jibes with these guidelines and emphasizes that all native advertising in Forbes is indicated as such.

“The key is that it needs to be clearly labeled and very transparent to the audience that the content comes from an advertiser or marketer,” said D’Vorkin.

However, based on these guidelines, ASME might not look favorably upon Forbes’ decision to sell a sponsored second cover, labeled with an inconspicuous “BrandVoice by AT&T” banner. To understand this is sponsored content, readers have to be familiar with BrandVoice and what it means. This sponsorship might not be immediately clear to the average reader, who would require a more blatant “Sponsor Content” or “Paid Post” citation.

Readers must be vigilant in reading the magazine and website, scanning each byline for a sponsorship tag.

A 2012 study by Contently found that two-thirds of survey respondents said they felt deceived when they realized an article was sponsored.

Robby Wiggins, a senior in UNC’s Kenan-Flagler Business School regularly visits Forbes’ website and said he’s often unsure whose opinions he’s reading.

“I think allowing companies to publish on the site is a slippery slope and greatly risks confusing and alienating readers,“ said Wiggins. “When I read sponsored content, regardless of however much the sponsoring agency takes liberty with changing a certain angle, I immediately doubt the credibility of the source.”

Looking forward

Forbes continues to explore new frontiers of native advertising and anticipates interest among advertisers in the Pulse platform. D’Vorkin said he expects to see native advertising grow both at Forbes and in the larger media industry.

“Companies are increasingly starting their own corporate newsrooms to publish content,” said D’Vorkin. “The traditional newsroom as we know it, is showing up everywhere and we’re going to see more as years unfold.”

Thomas said he thinks Forbes has a sustainable model due to its balance of editorial and advertising, and the fact that its content has not diminished at the expense of increased native advertising.

“Forbes is a survivor,” said Thomas.

Corinne Jurney is a senior at the UNC-Chapel Hill School of Journalism and Mass Communication.