Real Ads, Fake News, Real Confusion

Today CUNY’s Tow-Knight Center for Entrepreneurial Journalism and Contently released a study of consumer confusion about the labeling of native advertising. Among the findings:

  • 54 percent of respondents have felt deceived by native advertising in the past.
  • 44 percent were not able to correctly identify the sponsor of the native ad they read, raising questions about the efficacy of the form, badly done.
  • 77 percent of consumers don’t identify native advertising (from the screenshots & mockups furnished as part of the survey) as advertising after viewing it. Let me underscore that: three-quarters of our own users can’t tell the difference between independent reporting meant to serve them and paid-for content meant to sell them.
  • When a trusted publisher features native advertising for an untrustworthy brand, 43 percent of consumers lose trust in that publisher.
  • Conversely, when a trusted publisher features native advertising for a trustworthy brand, 41 percent of consumers gain trust in that publisher. Now more than ever, you are the company you keep. In What Would Google Do, I argued that PR and ad agencies would need to fire clients that didn’t do right by their own customers. This finding would make me believe that publishers need to be selective about what and whom they advertise.
  • Consumers have a much easier time recognizing native advertising on Facebook than on publisher sites. Let me repeat that: 73% of users correctly identify native ads served on Facebook.
  • According to the users surveyed, “sponsored” turns out to be the clearest label for native advertising to consumers. I’m guessing that’s because of the point above: Facebook has made them accustomed to the convention. (I still also like calling advertising advertising.)

Coincidentally, our study comes out the day after Craig Silverman at BuzzFeed released a survey that found that up to 81 percent of readers believed fake-news headlines. (The good news in Silverman’s study is that most people don’t recall having seen the fake stories.)

Consumer confusion is also fed by the scourge of Outbrain, Taboola, and their ilk, which send our readers fake news, crap content, severe let-downs from clickbait headlines. Note the relationship to the finding above about the impact on publishers’ reputations of advertising undesirable brands.

We have a problem. This is not the time to be confusing the public about what is news and what is advertising. The news industry’s trust is at an all-time low. The need for authoritative, trustworthy news coverage is at an all-time high. What are we doing to ourselves and to the public we serve?

That is why we commissioned this study, working with Contently — which makes native advertising and thus is concerned with understanding how to do it right. So are we. It is clear that native ads, aka sponsored content, are an important source of revenue for publishers. They’re not going away. That is why we wanted to help the industry develop proper standards — and understand the damage that can be done if they don’t.