NEW YORK--(BUSINESS WIRE)--Contently, in partnership with the Tow-Knight Center for Entrepreneurial Journalism at The City University of New York (CUNY) and Radius Global Market Research, published a new study, “Fixing Native Ads: What Consumers Want From Publishers, Brands, Facebook, and the FTC.”
The study, which surveyed 1,212 demographically representative 18-64 year olds who regularly use the internet, found that confusion and lack of labeling standards are common in the industry. However, when done well, native advertising can increase consumer trust and purchase intent.
"As the news business explores new revenue opportunities to save itself, it is important that we stand back and examine ethical issues to assure that we do not lose the one asset that really determines the value of our enterprises: trust," said Jeff Jarvis, director of the Tow-Knight Center. "I am delighted to have worked with Contently on addressing these questions to assure that we serve the public well."
The qualitative study was informed by four separate focus group interviews with a trained moderator, with the purpose of understanding consumer terminology and behavior when it comes to native advertising.
- 54 percent of respondents had felt deceived by native advertising in the past, and 44 percent were not able to correctly identify the sponsor of the native ad they read.
- Just 23 percent of consumers described the example native ads they were shown as advertising. Respondents were more likely to identify native ads as editorial content (34 percent) or a hybrid between editorial content and advertising (43 percent).
- When a trusted publisher features native advertising for an untrusted brand, 43 percent of consumers lose trust in that publisher. Conversely, when a trusted publisher features native advertising for a trusted brand, 41 percent of consumers gain trust in that publisher.
- Among those interested in the native ad content they viewed, 59 percent 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,” said 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 FTC, publishers, social channels, brands, and consumers, including:
- Labeling: “Sponsored” was considered the least confusing label by 49 percent of consumers. “Advertising” (24 percent) 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 percent 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 percent, tied with GE/Business Insider), and the one that had the biggest impact for the sponsoring brand (56 percent 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.
As the native ad industry continues to grow, so too does the need for industry-wide standards that will protect brands, publishers, and consumers alike. Click here to download the full study.
Contently is a technology company that helps enterprise companies create results-driven content by providing them with smart technology, vetted creative talent, and proven expertise. Visit contently.com for more information. Visit contently.com/strategist for trends and insights on the content marketing industry.
About the Tow-Knight Center for Entrepreneurial Journalism
The Tow-Knight Center runs educational programs, conducts research and supports journalism startups to help foster sustainable business models for quality journalism. The organization's education programs train journalists in media entrepreneurship, while its research arm explores new business models for news.