The short answer
Editorial is selected on merit by the publication; paid publication is a commercial placement and should be labelled as such.
Editorial coverage is chosen by the publication’s editors and carries their credibility. Paid placements — sponsored features, advertorials, brand spotlights — are bought and should be clearly marked so readers can tell the difference.
Both are legitimate, but they achieve different things. Editorial builds authority; paid placement buys reach and control of message. Confusing the two damages trust with readers and with clients.
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