The internet freaked out this week when an advertisement done in the "Sponsored Content" style was discovered on The Atlantic's website.

I have to be completely honest that this made little sense to me. Ever since I can remember, I've read cheesy ads in my favorite magazines that say "sponsored content" at the top but are otherwise made to appear as part of the magazine. I fancy myself a discerning reader who is able to figure out that the sponsored content is making claims that are, shall we say, less than journalistic. Why should it matter whether the miracle being pitched is for face cream or a secretive religious group?

But I was in the minority. The most common sentiment Americans can muster -- outrage, obviously -- was mustered and the ad was pulled down within 12 hours (you can see the cached version here). The Washington Post's Erik Wemple had a good explanation of what happened, along with some key points, including:

Native ads are critical to The Atlantic’s livelihood. They are one element of digital advertising revenue, which in 2012 accounted for a striking 59 percent of the brand’s overall advertising revenue haul. Unclear just how much of the digital advertising revenue stems from sponsor content. We’re working on that.Though the Atlantic has done many such advertorial packages in the past, Raabe says that it hasn’t received complaints — at least that she’s aware of.This is the first such package that The Atlantic has done with Scientology.

The Atlantic issued a statement about the matter, which began:

We screwed up. It shouldn't have taken a wave of constructive criticism — but it has — to alert us that we've made a mistake, possibly several mistakes. We now realize that as we explored new forms of digital advertising, we failed to update the policies that must govern the decisions we make along the way.

The New York Times noted that other digital media outlets ran sponsor content, adding:

But no instance of sponsored content has come under as much criticism as this one. Gawker called the sponsored Web page “bizarre, blatant propaganda for Scientology.” Others raised questions about why all the comments on the page were supportive of the church, indicating that critical comments were being deleted. A spokeswoman for The Atlantic said that the comments were moderated by its marketing team, not by the editorial team that moderates comments on normal articles.

At the same time, others defended the arrangement as a smart business move. The church’s ad buy comes at a time when it is trying to blunt the impact of a new book about the secretive religion by Lawrence Wright, “Going Clear: Scientology, Hollywood and the Prison of Belief.” The book will be published on Thursday.

The Onion, the satirical newspaper, decided to run content from its partner, "The Taliban." Headline:

SPONSORED: The Taliban Is A Vibrant And Thriving Political Movement

What I didn't see much of, however, was an explanation of why it was so awful that The Atlantic takes money from groups such as The Church of Scientology. I'm more than willing to hear that argument, I just noticed that there was a lot of outrage, and not much argument. What would a policy look like that bans such content, I wonder?

Which is why I loved media critic Jack Shafer's take over at Reuters. He has no issue with taking money from various groups, including Scientology. He points out that the apology from The Atlantic focused on policies regarding advertorials. But he says that the church could have done a better job for itself with its propoganda. And he says that The Atlantic's advertising department should have worked with the church to do a better ad, telling them, "Look, I know you’re suffering a public-relations beating out there with the publication of Lawrence Wright’s expose, Going Clear. But the North Korean quality of this advertorial singing a song of praise to David Miscavige is unwise, and in your best interests I reject it. Let’s see if you can do better."

He says The Atlantic should have done a better job of identifying the content as sponsored, but it seems about as well identified as any other sponsored content I've read.

Elaborating on his "I'll take anybody's advertising dollars" policy, he writes:

Earlier, I stated that Scientology ad dollars can be collected in good conscience, a judgment I would extend to accepting ad dollars from North Korea, Exxon, nuclear power designers, tobacco companies, gun shows, and the North American Man/Boy Love Association. The principle is simple: Accepting an advertisement implies no endorsement of the advertiser. Taking Ford’s money doesn’t mean a publication can’t or won’t accept money from Chevy – or anti-car groups. Nor does taking Ford money mean an advertiser must take Chevy’s money. It’s the publisher’shouse, and he is free to paint it any color he chooses, even Scientology blue, as long as he makes it clear that the paint job is an advertisement.

I've had a few conversations along these lines -- what policies should govern the acceptance of ad dollars and donor dollars -- and I generally think that the most important thing is that advertising dollars have zero effect on your news production or editorials. Other than that, I think media outlets should set whatever policy they're comfortable with, that is easy to follow and conducive to the bottom line. Advertisements are just that -- advertisements -- and not endorsements from those who run them.

But what do you think? And if you disagree, do you think all religious or philosophical groups should be disallowed from advertising at certain media outlets or just some? And if it's just some, what's the criteria?

Shafer ends with another good point, which is that media outlets need to provide good neighbors for good advertisers. A cheesy ad can debase a very nice luxury-goods ad if run in close proximity, for instance.

What do you think? What are the big lessons learned from this week's most recent outrage-fest?