Study Finds Consumers Remain Confused By Native Ads

In a new study conducted on native advertising, 54% of respondents said they'd felt deceived by native advertising in the past, and 44% weren’t able to correctly identify the sponsor of the native ad they read.

The study, “Fixing Native Ads: What Consumers Want From Publishers, Brands, Facebook, and the FTC,” was conducted by tech firm Contently, in partnership with the Tow-Knight Center for Entrepreneurial Journalism at The City University of New York  and Radius Global Market Research.

Among the other findings:

-- 23% of consumers were able to describe the samples of native ads they were shown as advertising. Respondents were more likely to identify native ads as editorial content (34%) or a hybrid between editorial content and advertising (43%).

--When a trusted publisher features native advertising for an untrusted brand, 43% of consumers lose trust in that publisher. Conversely, when a trusted publisher features native advertising for a trusted brand, 41% of consumers gain trust in that publisher.

--Among those interested in the native ad content they viewed, 59% said that it made them more likely to purchase.

--Consumers were most likely to interpret a native ad as an advertisement when they were first exposed to it on Facebook.

“Though a majority of respondents have felt misled by native ads, our findings indicate that they can be very effective when executed correctly,” stated Joe Lazauskas, director of editorial at Contently. “It’s our hope that quantitative and qualitative evidence will spur the industry to improve practices and subsequently increase consumers’ trust in both brands and publishers.”

The study’s findings also point to possible solutions that would improve native advertising for the Federal Trade Commission, publishers, social channels, brands, and consumers, including:

--Labeling: “Sponsored” was considered the least confusing label by 49% of consumers. “Advertising” (24%) was rated as the second-least confusing label.

--Layout: Both logos and brand names should be included when labeling native ads, a practice supported by 74% of respondents.

--Topic: As long as disclosure recommendations are adhered to, brands and publishers shouldn’t be afraid of being brand-centric. In fact, a New York Times native ad with Wendy’s was by far the most brand-centric of the ads tested. Yet it was the native ad consumers were most interested in (80%, tied with GE/Business Insider), and the one that had the biggest impact for the sponsoring brand (56% of respondents were more likely to purchase from Wendy’s).

--Distribution: Social media sites should adopt Facebook’s approach to native ads, given how transparently Facebook labels native ads.

The study’s findings suggest that as the use of native advertising and sponsored content grows, industry standards are needed.

The study, which surveyed 1,212 18- to 64-year-olds who regularly use the Internet, found that confusion and lack of labeling standards are common in the industry. On the flip side, the study found that when done well, native advertising can increase consumer trust and purchase intent.


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