- Research from Grady College in Georgia published in the December Journal of Advertising found that consumers couldn’t tell the difference between native ads and editorial content.
- In one experiment that involved subjects reading a native ad followed by an actual news story, less than 8% were able to identify the native advertisement as a paid ad.
- At the end of 2015 the Federal Trade Commission (FTC) released new native ad guidelines that hinted at potential enforcement that caught the attention of the Interactive Advertising Bureau (IAB).
If the goal of native advertising is to trick readers rather than offer a more compelling advertising message, native ad creators are succeeding. According to research conducted by Grady College in Georgia and published in the December issue of the Journal of Advertising consumers can’t tell the difference between sponsored content and actual news articles.
A second experiment used eye tracking on the subjects to find out the most effective placement of sponsored content disclosures as required by the FTC. Disclosures in the middle of the page were seen by 90% of the subjects, top of the page by 40%, and 60% at the bottom of the page. But, even though subjects saw the disclosures, just a little over 18% identified the sponsored content as a paid ad.
The new FTC guidelines spell out how sponsored content should be labeled with an emphasis on "ad" and "sponsored advertising content" and letting advertisers know that "promoted" and "promoted stories" should not be used as both are potentially misleading and are at best ambiguous.
Given these new guidelines, which the IAB called "overly prescriptive," and that carried an implication that enforcement might be coming sooner than later, native advertisers would be wise to ramp up self-regulation before the FTC decides to take that step for them.