The native advertising industry is on a roll. As the use of ad blockers increases and banners ads are kind of just there being ignored by people at best, this form of advertising is helping publishers make up some serious lost revenue. According to an article in Business Insider, native ad revenues in 2015 were approximately $8 billion and are expected to rise to $21 billion in 2018. Evidence shows, however, that audiences cannot tell the difference between these ads and real news.
Native advertising is a relatively new form of content marketing. According to a survey taken by a segment of the Content Marketing Institute’s audience, “Almost three out of four have used native advertising for content marketing for less than three years with one-third using it for less than a year.” The idea is for a brand’s content to as closely match the look and feel of the site that is hosting the content, plus be delivered in-stream so that there are no interruptions. While indeed there is some supposed valuable information being passed along by the brands, these ads are still paid content and can mislead readers into thinking they are real articles.
Proving this point, contently.com surveyed over 500 adults in order to gain insight on how ordinary readers interpret native advertising viewed on a publisher’s website. Here are a few key findings:
- On nearly every publication tested, consumers identified native advertising as an article, not an advertisement.
- 48% felt deceived upon realizing a piece of content was sponsored by a brand.
- 62% believes a news site loses credibility when it publishes native ads.
To address the problem of native ads too closely resembling content, late last year the Federal Trade Commission issued a guide on how to label and regulate this form of advertising. Disclosure that an article is a paid advertisement rather than publisher news is necessary in order to prevent deception. The more closely the advertisement resembles the look and feel of the site, the more visible the advertising label needs to be. To take the negative impact of native advertising even further, there are even suggestions like the one in Bloomberg View’s article about the subject, that the entire digital advertising model as we know it might collapse due to all the deception surrounding it. Despite predictions of explosive growth in the near future, there is real evidence that proves native advertising is on the decline. A report by Trusted Media Brands mentioned on luxurydaily.com reveals that 45% of marketers plan to use native ads this year, compared to 50% in 2015.
With all the problems surrounding native and the online advertising industry, are you surprised?