Native Advertising. Are consumers being deceived? A new study suggests this is the case.

Photo Doug Kessler

Native advertising is a relatively new word to describe advertiser-sponsored content disguised as editorial content. It is expected that the total spending on native advertising will take a 52% share of the digital display market and reach €13.2 billion by 2020, which is an increase of 156% over year to date (WARC, 2016). Generally the use of the method is driven by publishers who are facing declining ad spend and an increase in the use of ad blockers. And the method seems to work well according to Yahoo CEO Marissa Meyer (2014).

Controversial method

The native advertising method is sometimes a contentious issue. Basically there are two arguments that play a role. Firstly, there is an ethical concern. Is it fair to trick consumers into reading or viewing sponsored content by using the same layout and typesetting or audiovisual format as the regular editorial content by journalists or producers? Secondly, is the argument that the traditional boundaries between editorial freedom and outside influence should be maintained at all cost since this guarantees the freedom of speech of journalists and their editors. John Oliver very eloquently explains this in his show.

Would disclosure help?

There are many questions one can raise regarding Native Advertising. One could take the point of view that as long as there is disclosure of the sponsoring by an advertiser, there are no ethical concerns as far as consumers are affected. However, this means that media consumers need to be aware of the sponsored content. A new study by Bartosz Wojdynski & Nathaniel Evans (2015) raises doubts about the latter.

What was studied?

The authors conducted two experiments. Aim of the first experiment (N=242, USA) was to examine whether different types of disclosure language influence the recognition of native ads as advertising. The alternative wordings were: “advertisement,” “sponsored content”, “brandvoice” and “presented by [sponsor]”. Moreover, the study investigated, based on the persuasion knowledge model (Friestad &Wright 1994), what consequences the disclosure language has on attitudes and purchase intentions towards the brands that were used in the native ads. Based on previous studies they expected that recognition of the native ads as advertising would have a negative effect towards both. A second eye-tracking experiment (N=60, USA) aimed to find out whether the position of the disclosure in the article (top/middle/bottom) made any difference in recognizing the advertising character of the content.

The different disclosure expressions investigated were included in a story on a news website. The subject of the story was about advances in battery technology and showed the fictional brand “LEOMotive” in study 1 and the brand “Dell” in study 2.

What was the outcome?

Only 7 % of respondents in study 1 recognized the native ad as advertising and 18.3% in study 2. Surprisingly, only the disclosure position in the middle of the story had a significant effect on advertising recognition. This was also confirmed in the eye-tracking study. The best scoring expressions to signal advertising were “advertisement” and “sponsored content.” The other expressions were more ambiguous. Recognizing the native ad as advertising only triggered lower evaluative scores of the news story, the brand, and other evaluative components in study 1, which is contrary to current theories.

What now?

It is clear from this study that regulators should reconsider the actions they take to regulate native advertising. Clear wording of the character of the ad and a middle position is recommended (Wojdynski & Evans, 2015). My take on native advertising is different, however. Disclosure may, apparently, not be enough. Native ads are not recognized as advertising and are a “new” kind of persuasion Trojan horse. They work because they are deceptive in nature.

It is hard to imagine that any sensible marketing manager would knowingly trick his customers into reading these kind of ‘hidden’ ads. Firstly, because this shows a clear disrespect for his/her customers and secondly because this might have a negative effect on trust in the brand once consumers discover they have been tricked. The projected spending of €13.2 billion by 2020 on native advertising paints a different picture however….

(With kind thanks to Verena Wottrich and Nadine Strauss for their comments on a draft version of this blog article)

References

Warc (2016). Native to take half of Digital Display. Via http://goo.gl/E1EhzZ

Wojdynski, B. W., & Evans, N. J. (2015). Going Native: Effects of Disclosure Position and Language on the Recognition and Evaluation of Online Native Advertising. Journal of Advertising, 1-12.

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