Troubling truths about native advertising
Readership levels fall if people know it's advertiser-sponsored content
August 30, 2016
It’s little more than an advertorial for the digital age, advertising messages tricked out to appear as legitimate editorial.
Native ads have been all the rage for a few years now, as any new digital thing tends to be. Spending on the format is forecast to roughly double from 2015 to 2016, according to BI Intelligence.
But does native advertising really work?
There’s a reason why advertorials in print magazines largely died away. Readers are wary of advertiser-sponsored content. They don’t trust it, and many will not read it if they realize what it is.
That’s confirmed by a new study on native ads from Polar, a native ad developer, that suggests publishers may be avoiding clearly labeling native ads because it lowers readership levels to do so.
The study, focused on whether ads are complying with disclosure laws passed last year by the Federal Trade Commission, finds that fully a third of publishers do not follow the rules.
The FTC mandates all native content must be identified as sponsored advertising, by using designations such as promoted, partner, sponsored, advertising or presented.
Sponsored is the most popular designation.
Even so, just 55 percent of native ads say they are sponsored, and a mere 4.5 percent are identified explicitly as an advertisement.
Fully 33 percent lack any designation whatsoever.
The Polar report suggests that publishers may be leaving designations off in the hopes of generating bigger click-throughs and better engagement.
Some might argue that this proves native advertising can be effective. After all, if people click on a story when they don’t realize it’s sponsored, that shows it can be a draw.
But it’s hard to imagine much of a future for native ads if they’re most successful when they’re in disguise. At some point, advertisers will come to realize that advertising that relies on deception risks hurting the brand over time.
As it happens, there are more and more studies out questioning the overall effectiveness of native advertising.
If and when native ads do fall out of favor, the big question will be whether there is something else to take their place. If not, a lot of online publications could be a risk of seeing revenues tumble.
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