Research shows readers lose trust with native advertising. Is the revenue worth it?

Recently HBO’s John Oliver described native advertising on his “Last Week Tonight” show. If you haven’t seen this, watch it now (video below). It may be the most important thing you do today.

Oliver provided a comic narrative about the long-standing separation of church and state — i.e. advertising and news — in the newspaper industry, and how that line is now blurred with native advertising.

He showed a clip of New York Times executive vice president of advertising, Meredith Levien, defending native advertising at a conference: “Let me start by vigorously refuting the notion that native advertising has to erode consumer trust or compromise the wall that exists between editorial and advertising. Good native advertising is just not meant to be trickery. It’s meant to be publishers sharing storytelling tools with marketers.”

But Oliver called native advertising out for what it really is: “Exactly, it’s not trickery. It’s sharing storytelling tools. And that’s not bullshit. It’s repurposed bovine waste.”

Everyone laughed when Oliver pulled out the bovine waste line. But instead of laughing, we in media really need to pause and consider the impact that native advertising has on our audience.

Native advertising, also called sponsored content, has been heralded as the saviour of the newspaper industry. The concept is to deliver advertising in a way that makes it appear like content.

Sure, it is usually marked “sponsored content,” but the reality is most consumers feel tricked when they start reading it.

A recent survey from Contently showed some striking revelations:

  • Two-thirds of readers have felt deceived upon realising an article or video was sponsored by a brand.

  • 54% of readers don’t trust sponsored content.

  • 59% of readers believe a news site loses credibility if it runs articles sponsored by a brand.

  • As education level increases, so does mistrust of sponsored content.

BuzzFeed and the Atlantic have made native advertising a huge part of their revenue plans.

According to the Pew State of the News Media 2014 report, “A Deeper Look at the Digital Advertising Landscape,” “BuzzFeed, The Atlantic, The Huffington Post, and Mashable were early adopters of these ads and have seen strong revenue gains. BuzzFeed’s Jonah Peretti announced profitability in September of 2013 based almost exclusively on native ads. The Atlantic saw digital revenue grow from less than 10% in 2006 to 60% in 2013, driven in part by native ads.”

According to BIA/Kelsey, U.S. native social advertising revenues are projected to grow to US$4.6 billion by 2017.

So, clearly native advertising is a big player in the race for revenue. But what is the long-term cost?

One of the pillars of newspaper-audience relationship is trust. Survey after survey has shown that one of the main reasons consumers read newspapers is that they trust the journalist.

But research shows that native advertising reduces trust. Without that trust relationship with our audience, what else do we have left?

There’s an old saying that, as crude as it may be, is somehow hauntingly appropriate. You can put lipstick and rouge on a pig, but … it’s still a pig.

We need to be careful not to think that disguising advertising as content isn’t noticed by our audience. We need to be careful not to sell our souls for short-term dollars.

About Elisabeth Clark

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