Lots of different sides to come at for this.

Consider your sponsored article, then consider something very similar, but not quite the same: An article on Anandtech comparing hard drives.

In a very real sense, the Anandtech article could be considered advertising. It’s presenting information on a topic that’s relevant to the readers, and may motivate them to buy one of the mentioned items. At the same time, though, it’s not paid advertising, because as soon as money starts changing hands with respect to reviews, the validity of said review is called into question.

Likewise when someone notes how happy they are with product X (such as the Namecheap thing you mention, ignoring any money for now), it’s presumed to be an honest recommendation (until astroturf campaigns are brought into the picture), and helpful to the status of that product. IE: word-of-mouth advertising.

Once you start paying to place your ads, though, things get all kinds of funky. If you’re spending money to place an ad, there’s a natural tendency to want to get your money’s worth for it. That is, get back at least as much money as you spent, else why did you bother in the first place? That then leads to maximum value for minimum investment: spend as little as possible to get as much ‘notice’ as possible. That naturally leads to the intrusive and annoying advertising we’ve become so accustomed to.

To avoid this, you need one of two things: Either present the ads only to those who actually want that specific information (which leads to today’s tracking culture), or care more about the impression of the ad itself than you do about the product being advertised (which may not be monetarily optimal, and thus may be shut down by corporate culture).

Someone made mention of the fact that local advertising doesn’t scale in a global market. That, I think, is part of the fundamental problem. Local advertising (in the oldest sense) carries with it a certain degree of ‘responsibility’. You have to answer personally to the guy you sold stuff to when you meet him at the grocery store, or whatever. To get it to scale, the people you’re selling to change from people to numbers on a spreadsheet, with no intrinsic value except the little dollar sign in the next column.

So I’d think that ‘good’ advertising would have to combine two factors:

1) Locality (for a given definition of ‘local’, which may not be geographic), with direct responsibility to and connection with the target audience.

2) Cost indifference. Create the best ad for the target locality, with the focus on the ad (and, by inference, company; see: brand loyalty), not the product.

You can see both of those factors in effect with both the sponsored article, and things like the Superbowl ads.

If you focus on efficiency and cost returns, and ignore the audience as anything except another set of eyeballs with a wallet, you end up with the litany of horrors that is advertising in today’s world. Likewise, locality is in direct conflict with spam, since spam pretty much by definition can’t be local. Advertising networks are at sort of a halfway point on locality, but discard direct connection or responsibility in favor of cost efficiency.

Various other aspects of ads can be brought up, and each one I can think of are either directly in line with or in direct conflict with one of the above two points, and which side of the fence they’re on pretty well defines whether I’d consider them ‘good’ or ‘bad’ advertising.

And finally we roll all the way back to the original issue of how to deal with this on the content producer’s side of things.

Since the content provider pretty much defines the locality, they must also then take direct responsibility for the ads that they serve. If the advertiser wants fine-tuned advertising, why aren’t they asking the advertiser to explicitly associate specific ads with articles that match that particular advertising (eg: hard drives and NAS servers with a hard drive review, not video card ads, or putting them with a video card review, etc)? Well, that’s more work, and demanding that work without compensating with higher pay isn’t going to fly. On the other hand, it’s also an extension of the idea of ‘locality’, and one that only the content provider can provide.

The responsibility also carries over into web security. If I know that an advertising network has served virus-laden ads in the past, I am never going to allow them to show ads on my system directly. If you (as a content provider) want me to see them, you need to vet them yourself to show to me, and bear responsibility if there’s a problem.

Likewise, direct sponsorship type articles can’t happen without a rather direct connection with the company doing the sponsoring, and the belief by the audience that the content is still actually content, and not the content provider simply selling out for a few bucks.

So: Locality; Responsibility; Cost Indifference.

Someone may be able to put that into something catchier, and put together a more comprehensive analysis of the idea. I’m aware that there are technical hurdles involved in offloading the ads from the advertising network, for the sake of web security (and in fact, offloading introduces a different security problem, so it’s bad either way), so the content provider should at least be able to perform an audit of exactly what’s being served. Likewise, dealing with the advertising network’s tracking policies. Maybe they could advertise (heh) a ‘premium’ ad network with more stringent requirements on the overall handling of the process. The content provider provides additional value by doing the targeting in place of the advertiser network, and is thereby paid more for that service.

So many more details that could be considered, but this is already hella long, so, meh.

Addendum: Now actually finished the podcast, and a few points intersect with some of what I wrote above.