Native Ads: Effective, But Are They Accepted By Consumers?

Marketers have enthusiastically embraced “native advertising,” and there’s an emerging body of evidence supporting the proposition that it’s more effective than traditional display. The latest addition to that corpus comes in the form of a report just published by the MMA.

Yet all is not rainbows and sunshine in native advertising land. There’s competing data showing a large percentage of consumers are ambivalent (if not hostile) toward native advertising.

First the positive news for the industry. The MMA report, which is basically a roundup of third-party studies on mobile native ad effectiveness, offers the following metrics in support of the format:

• Mobile native ads performed as much as 10X better compared to mobile display advertising at similar frequency
  
• Users gave mobile native ads 3X more attention than traditional banner ads
  
• Users spent 40 percent more time interacting with native ads than with standard ones
  
• Average brand recall with native ads was more than 2X the control group in one study

There’s quite a bit more of this sort of thing out there to argue native ads grab more consumer attention and drive better KPIs than conventional PC or mobile display advertising. Yet these results seem to be tainted by other research that shows many consumers are “concerned” about native ads and can sometimes feel “deceived” by them. And some consumers are not aware of native ads or sponsored content.

Source: CivicScience (2015)

In the specific context of news publications, 61 percent of survey respondents (chart above) agreed with the statement that sponsored content harmed the credibility of the publication in question. Echoing those results, a widely reported 2014 study (n=542 online respondents) by Contently found the following:

• Two-thirds of readers have felt deceived upon realizing that an article or video was sponsored by a brand
  
• 54 percent of readers don’t trust sponsored content

The survey goes on to assert that most consumers prefer traditional banner ads to sponsored content or native ads.

Source: Contently (2014)

There is more such consumer data showing a lack of trust, suspicion or objections to sponsored content. So how do we reconcile these two contradictory bodies of research?

The skeptic’s explanation is that native ads work precisely because they deceive consumers into believing they’re “content.” While that may be true in some cases, it’s not a complete explanation. There’s often a meaningful gap between consumer attitudes and behavior. In addition, how questions are framed in surveys can often dramatically affect results.

Looking at the data more closely, we see something of a generational divide in attitudes toward native ads. Younger users tend to be more receptive to them, while older users are more skeptical or hostile.

One way forward is to acknowledge that native ads are more appropriate in some contexts than in others. For example, native travel-related ads in a travel environment are going to be more welcome, provided the content behind the ads is helpful. Native ads in a “hard news” environment may not be appropriate at all.

The IAB and others argue for clear labeling and quality content as the two “remedies” to the consumer problems identified above. Indeed, quality (delivering actual, valuable content) is especially critical, while clear labeling is legally mandatory (per the FTC).

One of my favorite examples of a poorly executed native ad is one from a persistent automotive publisher-advertiser on Yahoo. It routinely uses headlines such as “Top 10 cars for under $20K.” But when one clicks through, what’s there is basically a lead-gen form; there’s little or no actual “content.” This kind of disconnect between the promise of the “article” and the actual experience creates a sense of bait-and-switch, even anger.

It’s up to the IAB, publishers and “the industry” as a whole to develop and enforce labeling and quality standards that ensure there’s no confusion and that consumer CTRs are intentional and rewarded with meaningful content or information.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.

(Some images used under license from Shutterstock.com.)