Native advertising
Native advertising, also called sponsored content,[1][2] partner content,[3] and branded journalism,[3] is a type of paid[3][4] advertising that appears in the style and format of the content near the advertisement's placement.[5] It manifests as a post, image, video, article or editorial piece of content. In some cases it functions like an advertorial. The word native refers to this coherence of the content with the other media that appear on the platform.
"Sponsored content" redirects here. For other uses, see Sponsored Content.
These ads reduce a consumers' ad recognition by blending the ad into the native content of the platform, even if it is labeled as "sponsored" or "branded" content.[6] Readers may have difficulty immediately identifying them as advertisements due to their ambiguous nature, especially when deceptive labels such as "From around the web" are used.[1][7] Since early 2000s, the US FTC has required content that is paid for by advertisers and not created by the publisher as content to be labeled. There are different terms advertisers can use but in all cases the ad content must be clearly labeled as ad. According to the FTC: "The listings should be clearly labeled as such using terms conveying that the rank is paid for." [2]
Some studies have linked native advertising to ad-evoked effects, such as increased attention to an ad,[8] reduced ad avoidance,[8] increase purchase intention,[9] and favorable attitude toward a brand.[9] These types of integrated advertisements allow businesses to be associated with content that is already being consumed.[10]
Product placement (embedded marketing) is a precursor to native advertising. The former places the product within the content, whereas in native marketing, which is legally permissible in the US to the extent that there is sufficient disclosure,[11] the product and content are merged.
Advertising disclosure[edit]
As it is the nature of disguised advertising to blend with its surroundings, a clear disclosure is deemed necessary when employing native marketing strategy in order to protect the consumer from being deceived, and to assist audiences in distinguishing between sponsored and regular content. According to the Federal Trade Commission, means of disclosure include visual cues, labels, and other techniques.[20] The most common practices of these are recognizable by understated labels, such as “Advertisement”, “Ad”, “Promoted”, “Sponsored”, “Featured Partner”, or “Suggested Post” in subtitles, corners, or the bottoms of ads. A widespread tendency in such measures is to mention the brand name of the sponsor, as in “Promoted by [brand]”, “Sponsored by [brand]”, or “Presented by [brand]”.[21] These can vary drastically due to the publisher's choice of disclosure language (i.e., wording used to identify native advertising placement).[22]
In 2009, the Federal Trade Commission released their Endorsement Guideline specifically to increase consumer awareness of endorsements and testimonials in advertising given the rise in popularity of social media and blogging.[23]
The American Society of Magazine Editors (ASME) released updated guidelines in 2015 reaffirming the need of publishers to distinguish editorial and advertising content. The ASME approach recommends both labels to disclose commercial sponsorship and in-content visual evidence to help the user distinguish native advertising from editorial.[24]
A study published by University of California researchers found that even labeled native advertising deceived about a quarter of survey research subjects. In the study, 27% of respondents thought that journalists or editors wrote an advertorial for diet pills, despite the presence of the "Sponsored Content" label. Because the Federal Trade Commission can bring cases concerning practices that mislead a substantial minority of consumers, the authors conclude that many native advertising campaigns are probably deceptive under federal law. The authors also explain two theories of why native advertising is deceptive. First, the schema theory suggests that advertorials mislead by causing consumers not to trigger their innate skepticism to advertising. Second, advertorials also cause source-based misleadingness problems by imbuing advertising material with the authority normally assigned to editorial content.[25] Recognition percentages remain low even as native advertising has expanded in pervasiveness. An academic article published in 2017 has shown that only 17% of participants could identify native advertising and even if readers were primed, that number only increased to 27%. Moreover, when readers learned about covert advertising, their perceptions of the publications declined.[26]
Digital platforms[edit]
Native advertising platforms are classified into two categories, commonly referred to as "open" and "closed" platforms, but hybrid options are also utilized with some frequency.[27][28][29]
Closed platforms are formats created by brands for the purpose of promoting their own content intrinsically on their websites. Advertisements seen on these platforms will not be seen on others, as these ad types are generated for its sole use, and structured around exhibiting ad units within the confines of the website's specific agendas. Namely, advertisements distributed on closed platforms originate from the platform's brand itself. Popular examples include Promoted Tweets on Twitter, Sponsored Stories on Facebook, and TrueView Video Ads on YouTube.
Open platforms are defined by the promotion of the same piece of branded content across multiple platforms ubiquitously, but through some variation of native ad formats. Unlike closed platforms, the content itself lives outside any given website that it appears on, and is usually distributed across multiple sites by a third party company, meaning that the advertisements appearing on open platforms namely are placed there by an advertiser.[30] Two prominent platforms that use this open model are Taboola and Outbrain.
Hybrid platforms allow the content publishing platforms to install a private marketplace where advertisers have the option to bid on the inventory of ad space either through direct sales or programmatic auction through what is known as Real-Time Bidding (RTB). Therefore, advertisements distributed on hybrid platforms are placed there by the platform itself, the space having been sold to an open platform advertiser.