Dive Brief:
- A study of ads by MediaRadar found that 54% of native ads are labeled as "sponsored," while 12% have no label at all.
- The study found other terms are used to identify native ads: “promoted” (12%), “presented by” (6%), “provided by” (5%), and “brought to you by” (4%).
- Separate research conducted by Research Now for Contently found that 48% of U.S. internet users polled reported feeling "deceived" after realizing an article or video is sponsored content.
Dive Insight:
Native ads are an effective and growing format for marketers in a world rife with ad blocking. Native ads currently make up 56% of all display ad revenue, according to data from the Interactive Advertising Bureau (IAB), PwC and IHS, but BI Intelligence predicts that native advertising will account for 74% of all ad revenue by 2021.
However, concerns over the blurred lines between sponsored content and editorial content are arising at media companies, in regulatory hearings, and on social media.
Last December, Grady College published research that found less than 8% of the study’s participants could tell the difference between paid and editorial content — a troubling finding in a media environment where consumers are growing frustrated by a poor user experience.
The Federal Trade Commission made waves earlier this year by offering guidelines for native ad disclosures. The FTC guidelines specify that native advertising should be disclosed “in plain language that is as straightforward as possible.”
