Photo credit: Shannon Kringer
Native advertising is booming. Spending on native ads will increase from $4.7 billion in 2013 to $7.9 billion this year, and will reach $21 billion in 2018, predicts a BI Intelligence. Sponsors have found that native ads, a form of sponsored content designed to blend in with the publisher’s editorial content, achieve superior readership, click-through rates and consumer engagement.
Native advertising is also controversial. The ads blur the boundary between advertising and journalism. Consumers may feel duped and become annoyed after learning that an article or video was a paid advertisement. The news outlet’s credibility may suffer.
Do Consumers Trust Sponsored Content?
In a survey by CivicScience, 48% of respondents said they are “very concerned” about preserving objective journalism and 76% said they were at least somewhat concerned. Those likely to be most concerned about preserving objective journalism tend to be over 45, have at least an associate’s degree, and follow politics closely. Compared to other issues, the issue ranks around the middle – not as serious an issue as public education but more important than climate change and the environment.
Most (61%) of adult consumers believe sponsored content hurts the credibility of the media outlet.
In the days of print news, a publisher’s subscriptions and classified and display advertising could finance a roomful of journalists. Online advertising has proven to be an inadequate replacement. In a struggle for financial viability, many publishers have embraced sponsored content advertising that dismantles the wall between objective news and advertising. Financially constrained publishers accept contributed content, often with little verification of content or vetting of the source.
Personalized Advertising
Some web publishers are now selectively showing native advertising content more likely to match the interests of selected readers based on their past behavior. That raises a privacy issue. Consumers must consent, explicitly or implicitly, for this service to work. According to the CivicScience survey, 55% of consumers said having their online behavior monitored bothers them “a lot.” Another 24% are bothered “a little.” Most (68%) are concerned about not knowing how information on their online behavior is being used.
The findings are similar to a Contently survey that reported 54% of readers don’t trust sponsored content, and that two-thirds have felt “deceived” when they learned that piece of content was a paid advertisement. Fifty-nine percent believed that news sites lose credibility when they run content for brands.
In order for the targeted advertising model to succeed, publishers and consumers must find common ground. Publishers must clearly disclose what content is sponsored by advertisers, explain their data collection and data sharing practices and offer opt-out mechanisms.
Consumers must be willing to allow websites to collect and share data on their online behavior and be open to ad targeting tactics.
Sponsors of native ads must assure that readers/viewers benefit from the content by emphasizing education and entertainment over self-promotion. Sponsors must also insure that publishers label the sponsored content appropriately and prominently.
Bottom Line: Advertisers and web publishers continue to embrace native advertising. Publishers gain increased revenue, and advertisers win consumers’ interest. However, new surveys show that many consumers don’t trust sponsored content and say websites lose credibility. Without clear disclosures, both publishers and advertisers risk a backlash from disillusioned consumers.
William J. Comcowich founded and served as CEO of CyberAlert LLC, the predecessor of Glean.info. He is currently serving as Interim CEO and member of the Board of Directors. Glean.info provides customized media monitoring, media measurement and analytics solutions across all types of traditional and social media.
