NATIVE ADVERTISING - POWER, RESPONSIBILITY AND RISK
Chelsea Smallwood Bachelor of Business (Marketing)
Submitted in fulfilment of the requirements for the degree of Master of Business (Research)
Submitted to the School of Advertising, Marketing and Public Relations QUT Business School Queensland University of Technology
2018
Keywords
Native advertising, sponsored content, branded content, advertorials, marketing, advertising, power-responsibility equilibrium, ethics, responsibility.
Native Advertising - Power, Responsibility and Risk i
Abstract
Proclaimed as the way forward in digital advertising, native advertising is rapidly growing in popularity with billions of dollars projected to be spent on this approach in 2018 (Niekerk, 2017). Popular for its ability to seamlessly integrate brand messages into content consumers are looking for on platforms they are visiting, native advertising offers brands a way to cut through advertising clutter and connect with consumers in an engaging way (Wojdynski & Evans, 2016).
However, despite its popularity native advertising is attracting a lot of criticism for various reasons. Firstly, because it is difficult for consumers and regulators to identify that it is advertising content and therefore may be misleading and deceptive, and secondly, because it is difficult to regulate as there is no standard format.
Coined in 2011 during an industry discussion of how to monetise publisher content online, native advertising is considered to be a new term within digital advertising and a new area within academic research.
This study explores native advertising by first examining the literature from industry and academic discussion to understand how and why native advertising emerged as an advertising approach. Further, it investigates the perceived risks as well as ethical and regulatory challenges. From the literature review, an overarching research question was developed to guide this study, ‘What is native advertising and what are the ethical and regulatory considerations?’
Using the Delphi technique, this study examines native advertising from the perspective of the stakeholders (agencies, brands, publishers and academics) and how they view native advertising relative to similar advertising approaches such as advertorials, product placement, sponsored and branded content. Additionally, the stakeholders’ views about regulatory and ethical considerations and the risks associated with using native advertising are explored.
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Chapter Four presents the results from the research questions. Chapter Five discusses these results and examines the key themes from this study, which include: priorities, power, responsibility, value and priorities.
The key findings indicate that native advertising is viewed differently among the stakeholder groups depending on their priorities and motivations for using it. Publishers want to control the process from ideation to publication because of what it offers them in terms of advertising revenue and their readership through sought for quality content. Brands value the ability to cut through clutter and connect with consumers who are otherwise difficult to reach. Whereas, agencies value what native advertising offers as part of the broader picture in terms of value to the consumer and reaching a brand’s objectives.
In terms of regulation, the stakeholders identified various risks associated with native advertising such as the potential for consumers to feel misled or deceived or that they may become sceptical of other publisher content. Native advertising is considered extremely difficult to regulate due its use online across domestic and international markets as it does not fit specific format types and is difficult to standardise with labelling. Content creators are aware of these difficulties and are faced with decisions around transparency and labelling. The stakeholders demonstrated a strong sense of responsibility not only because of the associated risks but also because ethically they believe consumers should be able to distinguish advertising content from editorial content.
This study applies the Power-Responsibility Equilibrium (PRE) theory to understand the relationship between the stakeholders and the consumer. From the findings a model was created which furthers our understanding of power and responsibility in the context of native advertising, adding to it the inciting variable of risk. Various levels of risk were identified in this study and found to be a contributing factor towards rebalancing or disrupting the balance of power and responsibility.
This research is important for several reasons. Firstly, it adds to the body of literature in the area of native advertising, and secondly it contributes to the understanding of the stakeholders’ perceptions of native advertising, their reasons for using it, their
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ethical and regulatory considerations when adopting this strategy, and importantly their views on labelling and transparency. Further, this information offers valuable insight to regulators who are responsible for designing regulatory policy and who rely on stakeholders to exercise ethical responsibility.
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Table of Contents
Keywords ...... i Abstract ...... ii Table of Contents ...... v List of Figures ...... vii List of Tables ...... vii List of Abbreviations ...... vii Statement of Original Authorship ...... viii Acknowledgements ...... ix Chapter 1: Introduction ...... 1 1.1 BACKGROUND ...... 1 1.2 RESEARCH AIM and QUESTIONS ...... 3 1.3 JUSTIFICATION FOR RESEARCH ...... 3 1.4 METHODOLOGY ...... 6 1.5 THESIS OUTLINE ...... 7 Chapter 2: Literature Review ...... 9 2.1 INTRODUCTION ...... 9 2.2 ADVERTORIALS ...... 11 2.3 POWER-RESPONSIBILITY EQUILIBIRUM THEORY ...... 15 2.4 THE ADVERTISING ENVIRONMENT HAS CHANGED ...... 17 2.5 EMERGENCE OF NATIVE ADVERTISING ...... 22 2.6 CRITICISMS AND NEW CHALLENGES WITH NATIVE ADVERTISING ...... 28 2.7 THE FUTURE OF NATIVE ADVERTISING ...... 35 2.8 SUMMARY AND IMPLICATIONS ...... 36 Chapter 3: Research Design ...... 39 3.1 INTRODUCTION ...... 39 3.2 RESEARCH DESIGN ...... 39 3.3 THE DELPHI TECHNIQUE ...... 41 3.4 LIMITATIONS OF THE DELPHI METHOD ...... 44 3.5 DELPHI STUDY PARTICIPANTS ...... 45 3.6 DATA COLLECTION, TIMELINE AND INSTRUMENTS USED ...... 51 3.7 DATA QUALITY ...... 56 3.8 ETHICAL CONSIDERATIONS ...... 57 3.9 CONCLUSION ...... 58
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Chapter 4: Results ...... 59 INTRODUCTION ...... 59 4.1 RQ1: What are the elements that define native advertising and make it unique to other forms of advertising? ...... 60 4.2 RQ2: What are the anticipated risks for brands adopting a native advertising strategy?67 4.3 RQ3: How should native advertising be regulated and who should ethically be responsible for this? ...... 70 4.4 RQ4: What is the future for native advertising? ...... 77 4.5 SUMMARY OF KEY FINDINGS AND CONCLUSION ...... 81 Chapter 5: Discussion ...... 85 5.1 INTRODUCTION ...... 85 5.2 KEY THEMES FROM THE STUDY ...... 86 5.3 IMPLICATIONS FOR THEORY ...... 102 5.4 IMPLICATIONS FOR PRACTITIONERS ...... 104 5.5 LIMITATIONS OF THE STUDY ...... 106 5.6 OPPORTUNITIES FOR FUTURE RESEARCH ...... 106 5.7 CONCLUSION ...... 107 Bibliography ...... 110 Appendices ...... 129
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List of Figures
Figure 4.1. Native advertising and sponsored content share the same definition Figure 4.2. Native advertising is an umbrella term Figure 4.3. Native advertising is an example of sponsored content Figure 5.1. Model of Power, Risk, and Responsibility
List of Tables
Table 4.1 Defining elements of native advertising Table 4.2 Examples of native advertising Table 4.3 Consensus achieved for definitions of other terms Table 4.4 Risks associated with native advertising Table 4.5 Responsibility for regulation of native advertising Table 4.6 Importance in identifying native advertising as a paid advertisement Table 4.7. Responsibility for creating and approval of native advertising content Table 4.8. Responsibilities by group to create native advertising Table 4.9 Native advertising and ad blockers Table 4.10 The future of advertising Table 5.1. Stakeholder priorities and their perceptions of native advertising Table 5.2. Summary of risks when using native advertising
List of Abbreviations
PRE Power-Responsibility Equilibrium FTC Federal Trade Commission IAB Interactive Advertising Bureau
Native Advertising - Power, Responsibility and Risk vii Statement of Original Authorship
The work contained in this thesis has not been previously submitted to meet requirements for an award at this or any other higher education institution. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made.
Signature: QUT Verified Signature
Date: October 2018
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Acknowledgements
I would like to thank the following people who made completing this study possible.
Firstly, I would like to say a big thank you to the participants of this study who generously donated their time, talent and expertise towards this project. Without your dedication to participate this would not have been possible.
To my wonderful supervisors, Louise Kelly and Gayle Kerr, thank you! It has been a fantastic journey working with you on this project. Your insight, knowledge and constant encouragement has been invaluable along the way.
To my colleagues and close friends Greg, Scott, Bianca, and Michelle your support and encouragement has meant the world to me. Thank you for listening and providing guidance to me along the way. I am truly grateful.
To my sister Jade and parents, thank you for the countless hours of babysitting. I could not have achieved this without you. Thank you!
And lastly, to my husband Andrew and my gorgeous children Georgia and Flynn, thank you for putting up with me being constantly glued to the computer screen over the last few years as well as putting up with the countless trips to the library. Your patience, love, and support mean everything to me! Thank you x
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Native Advertising - Power, Responsibility and Risk x
Chapter 1: Introduction
This chapter provides an overview of this study that investigates native advertising to understand what it is and explore the ethical and regulatory considerations from the perspective of the stakeholders (agencies, brands, publishers and academics). This chapter outlines the background to the research and the research problem (1.1), the research aim and questions (1.2), and the benefits and justification for the research (1.3). Finally, an outline of the structure of the thesis is outlined in this chapter (1.4).
1.1 BACKGROUND
Connecting with consumers in recent years has proved challenging for advertisers. Consumers are constantly bombarded by thousands of advertising messages each day resulting in consumers becoming annoyed and choosing to ignore and often block advertising from their view (Simpson, 2017; Beak & Morimoto, 2012; Speck & Elliot, 1997).
Publishers have also struggled with dwindling revenue streams as consumers move away from print media to digital sources online. Further, the fragmentation of channels and the large quantity of platforms offering free information that consumers once paid for, has made it increasing difficult to convert consumers to subscription based services and attract advertising spend (Bakshi, 2014; Barthel, 2017; Fisher, 2018; Ponkivar, 2014).
In response to these challenges publishers started to offer an advertising product which is referred to as native advertising. Unlike traditional media that is obviously placed by an advertiser, native advertising steps outside of the obvious advertising formats utilising methods that are arguably more covert (Einstein, 2016; Wojdynski, 2016; Wojdynski & Evans, 2016).
Heralded, as the answer to publishers and marketer’s needs online, native advertising is rapidly being adopted across various platforms such as video, social media and
Chapter 1: Introduction 1
news sites. With an estimated global spend of US $59.35 billion dollars allocated towards this approach for 2018 native advertising is showing no signs of slowing down and is anticipated to continue to grow in popularity in the coming years (Niekerk, 2017; eMarketer, 2017).
However despite its popularity, it is also attracting a large degree of criticism. Arguments against native advertising suggest that it is likely to cause harm to consumers who are unaware that the content they are consuming is an ad (Vega, 2013; Ponkivar, 2014; Taylor, 2017; Wojdynski & Evans, 2016). Others suggest that it is misleading (Berry, 2014; Wasserman, 2013). It has created a divide among advertisers who believe that by over regulating this type of advertising will impede on the creativity and effectiveness of native advertising (Sahni and Nair, 2016). While various regulatory bodies around the world have introduced guidelines in an attempt to overcome these issues, recent reports in America suggest that only 40% of advertisers are choosing to follow these (MediaRadar Report cited in Forbes, 2017). This has raised many concerns around the ethical implications of this approach and how it should be regulated. Who should be responsible? And how they should be held accountable?
While academic researchers have started to examine native advertising in recent years much of the research to date has focused on understanding native advertising from the perspective of consumers. Specifically whether consumers are able to recognise native content (Wu, Huang, Li, Bortree, Yang, Xiao, Wang, 2016), the effects of disclosure and labelling on a consumers ability to recognise native advertising (Wojdynski & Evans, 2016), their attitudes and sharing of native advertising (Lee, Kim & Ham, 2016), and the effects of native advertising as a public relations tool (Sweetser, Joo, Golan, and Hochman, 2016). Little is known from the perspective of those involved with creating and researching native advertising. To date research in this space has focused primarily on understanding its popularity and reasons for adoption by publications (Conill, 2016).
This research aims to examine native advertising from the perspective of the stakeholders, specifically: agencies, brands, publishers, and academics, to understand their views on native advertising, how it should be defined and importantly their
Chapter 1: Introduction 2
view on ethical and regulatory considerations. While, academics are not responsible for content creation, they are valuable for this research as they can offer insight through their extensive knowledge and rich understanding of advertising. Further, they are often on the forefront of native advertising discussion.
1.2 RESEARCH AIM AND QUESTIONS
The purpose of this thesis is to explore native advertising from the perspective of the stakeholders to gain insight into their views of the ethical and regulatory considerations. To achieve this, the following overarching research question will be used to guide this study:
“What is native advertising and what are the ethical and regulatory considerations”
This overarching question will be explored through the following four research questions:
1. What are the elements that define native advertising and make it unique to other forms of advertising or publisher content? 2. What are the potential risks when adopting a native advertising strategy? 3. How should native advertising be regulated and who ethically should be responsible for this? 4. What is the future for native advertising?
1.3 JUSTIFICATION FOR RESEARCH
Understanding native advertising from the perspective of the stakeholders is an important area of research so that policy makers, content creators and educators are aware of the areas of importance to them, their priorities, and their attitudes towards regulation and who should be ethically responsible.
The importance of this research can be summarised into four key reasons:
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1. Native advertising is rapidly growing in popularity and shows no sign of slowing down due to financial opportunities for publishers and the benefits it offers brands.
Since its introduction in 2011, native advertising has increasing grown in popularity. Initially offered on websites such as Buzzfeed and Mashable, the advertising approach was quickly adopted by news sites such as New York Times, Forbes and The Wall Street Journal. Since then native advertising has extended to be offered by most news sites, and social media platforms such as Facebook and Twitter, fuelling its popularity for advertisers (Boland, 2018).
While recent reports show a drop in spend in programmatic advertising and print media, they show a dramatic increase in spend in native advertising (MediaRadar, 2017). Experts predict that approximately 74% of all advertising revenue will be generated from native advertising content by 2021 and that native advertising will continue increasingly be favoured by advertisers in the coming years (Boland, 2018; DeMers, 2018).
Given the degree of popularity and money being allocated towards this advertising approach it is crucial that we gain an understanding into what it is and how the stakeholders responsible for creating native advertising content view this approach.
2. There is confusion around the definition for native advertising
Native advertising has evolved at such a rapid rate, that a formal common definition and conceptualization of the approach has not yet been established (Matteo & Dal Zotto, 2015). There are conflicting definitions about what native advertising is and how it varies to similar terms. It is unclear if native advertising is an advertorial, sponsored content or another concept all together? At this stage it is also unclear how they fit together. Discussion within industry suggests confusion around the term (Fisher, 2018). Examination of academic literature also suggests a lack of consistency in terminology with the word often used interchangeably with like terms (Warzel, 2013; Matteo & Dal Zotto, 2015).
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3. Little is known academically about native advertising, specifically the stakeholder’s view of native advertising and its ethical considerations.
While terms such as advertorials and sponsored content which are considered similar to native advertising are well researched and understood, native advertising is considered to be a relatively new term and is still in the early stages of being explored. To date there is limited academic research that provides insight into the stakeholder’s view of the ethical and regulatory considerations when choosing to adopt a native advertising strategy.
Initial research into practitioner perspectives have explored native advertising, but have focused predominately on effectiveness, and the importance of context and how to increase performance of the native content (Harms, Bijmolt, & Hoekstra, 2017). It has also been examined to explore how to use native advertising as a public relations tool (Sweetser, Joo, Golan, & Hochman, 2016). This research intends to extend the current knowledge in this area and add to the understanding of native advertising from the perspective of the stakeholders.
Gaining an understanding into the views of the stakeholders – agencies, publishers, brands and academics may offer valuable insights into how decisions are made and highlight areas the other stakeholder groups may need to consider when engaging to develop native ad content. Further, it may provide insight into the different priorities and assist the stakeholders in their decision-making.
4. Because of the difficulties in regulating native advertising, it is important to gain insight into the ethical considerations of the stakeholders, how they believe it should best be regulated, and who ethically should be responsible.
Unlike traditional media that is clearly booked and paid for by an advertiser, native advertising steps outside of the obvious advertising formats utilising methods, which are deliberately more covert (Sahni & Nair, 2016). Extending over various platforms and ad types making it difficult to identify as an advertisement, because it does not
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fit a particular mould. While this can be seen a benefit for advertisers, it has added to the complexity of regulating native advertising.
The topic of regulation has created a divide amongst advertisers. Some have called for tighter regulation, worried that native advertisements are likely to cause harm or irritate consumers when they realise it is advertising (Bakshi, 2014). Whereas others believe that over regulating it will impede the creativity and the effectiveness of the advertisement (Sahni & Nair, 2016).
Adding to the complexity of regulation, unlike traditional advertising such as newspapers or television, digital media is not limited to physical borders (Katsirea, 2016; Matteo & Dal Zotto, 2015). Consumers can access content immediately from various markets nationally and internationally. Advertisers in Europe can run native ads concurrently across various platforms within America, Africa and Australia making extremely difficult to regulate.
Given the complexity of regulation for native advertising, regulators rely heavily on the stakeholders to exhibit a large degree of ethical responsibility. This study aims to contribute to understanding of how stakeholders view native advertising and their reasons for using it. What are their ethical considerations when adopting a native ad strategy? What are their views on labelling and transparency? Further this research aims to offer insight for regulators who are responsible for designing appropriate regulatory policy.
1.4 METHODOLOGY
To investigate the overarching research question ‘What is native advertising and what are the ethical and regulatory considerations’ the Delphi Technique was selected. This was considered the most appropriate for the following reasons:
• It allowed the ability to purposely select an expert panel based on experience and expertise on the topic of native advertising. It also enabled the collection of a broader richer opinion (Linstone & Turoff, 1975, 2011).
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• The Delphi technique enables anonymity of the participants and their responses. Anonymity ensures participants are not influenced by the responses of other participants on the panel and encourages independent thought (Dalkey & Helmer, 1963; Goodman, 1987; Hsu & Sandford, 2007; Keeney, Hasson, & McKenna, 2001). This was considered important because of the conflicting opinions in discussion about native advertising within industry. It was important that others did not influence opinions during the data collection process. • Data is collected through waves or iterations and provides a framework to gain consensus. Waves allow flexibility to explore the topic for as long as needed to collect rich insights (Hasson, Keeney, & McKenna, 2000). • The Delphi technique uses both qualitative and quantitative measures. The combination of qualitative and quantitative measures allows for the ability to delve deeper than a purely quantitative study and enables an objective analysis of the final rounds of data collected, free from biasing effects (Dalkey, 1969; Hsu & Sandford, 2007; Landeta, 2006). • Participants do not need to be physically present using the Delphi technique. This allowed the study to include participants from various time zones and countries around the world, and allowed for collection of data via phone and email (Guzys, Dickson-Swift, Kenny, & Threlkeld, 2015; Linstone & Turoff, 2011).
1.5 THESIS OUTLINE
Chapter One provides an introduction to the concept of native advertising, the purpose behind the research, and provided a general direction for this study.
Chapter Two explores the literature relating to advertising within the online environment, identified gaps in the literature and outlined proposed research questions. It also investigated native advertising’s emergence and importance, and how it may have impacted consumer empowerment. This chapter introduces the power-responsibility equilibrium theory which provides a framework to understand the relationship between the between the consumer and the stakeholders (agencies, brands, publishers and academics) and the use of native advertising.
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Chapter Three provides an outline of the methodological approach and justification for the Delphi technique. It outlines the process involved from data collection to analysis.
Chapter Four presents the results according to the four research questions.
Chapter Five provides an interpretation and discussion of the results in connection to the reviewed literature, and the theoretical model of the Power-Responsibility Equilibrium and risk. Implications for theory, regulators, and practitioners are presented, as well as recommendations for future research.
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Chapter 2: Literature Review
2.1 INTRODUCTION
Since marketing's inception advertisers have held both power and responsibility. The power to control the marketplace through satisfying product needs, dictating the terms and conditions of sale, and controlling the advertising message and marketing environment (Rust & Oliver, 1994; Rezabakhsh, Bornemann, Hansen & Schrader, 2006).
Equally, advertisers have carried the ethical responsibility to provide accurate and truthful information about their products to the marketplace to enable consumers to make well-informed, rational purchase decisions (Cunningham, 1999; Sandage, 1972). Providing accurate information has always been important, particularly when consumers have limited access to information; and are highly dependent on the reliability and truthfulness of the message from the advertisers.
Advertorials, typically associated with print media, were one of the first types of advertising that blurred the lines of responsibility. Advertorials looked like editorial content, but were actually advertising. Critics suggest that advertorials use deceptive techniques to trick readers into thinking the content was written by an unbiased source, the publisher, instead of an advertiser so that readers trust the content.
The advertorial became popular in the 80’s and early 90’s and extended into the online environment in the late 90’s in the form of online magazines (Ju-Pak et al., 1995; Stout, Wilcox, & Greer, 1989). More recently, publishers have started offering an advertising approach referred to as native advertising, which many suggest is an evolved version of an advertorial (Staplefoote, 2014; Coyne, 2014).
Native advertising has quickly become a preferred advertising method online overtaking display and banner ads in popularity with an estimated global spend of US $59.35 billion dollars being allocated towards this digital display method for 2018 (Niekerk, 2017). Native advertising is showing no signs of slowing down in
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popularity and is anticipated to continue to grow in favour over the coming years (eMarketer, 2017).
Hailed as the answer to publishers and marketers advertising needs online offering higher levels of engagement rate and new hope for lost print revenue streams for publishers, native advertising has rapidly been adopted across various social media platforms, content portals, news sites, video-sharing sites, and streaming services (eMarketer 2014; Lovell 2014, Sharethrough, 2017).
Despite the popularity of native advertising, there is still a lot of debate and confusion around its definition. There are conflicting opinions about whether it is an evolved version of an advertorial or whether it is a new approach altogether. There is also confusion about how it fits with similar terms such as branded and sponsored content (AdNews, 2015; Lazauskas, 2015; Native Advertising Institute, 2017).
While there is currently no universally agreed definition within scholarly literature or industry, a commonly used definition from the Interactive Advertising Bureau (IAB) suggests that native advertising is “paid ads that are so cohesive with the page content, assimilated into the design and consistent with the platform behavior that the viewer simply feels they belong” (IAB, 2015; eMarketer, 2014; p14; Lovell 2014).
The widespread use of native advertising has attracted considerable criticism due to its lack of visibility. Like advertorials, native content can be difficult to identify as an advertisement because it blends a commercial message into content produced by a publisher (Carlson, 2015; eMarketer, 2014). Arguments against native advertising suggest that advertisers are abusing consumer trust, because consumers are often unaware that the content they are consuming is an advertisement (Berry, 2014; Dumenco, 2014; Wasserman, 2013).
While the Federal Trade Commission (FTC) and various other industry bodies around the world have offered guidelines to encourage advertisers to clearly identify native content as an advertisement, it has proved difficult (McPherson, 2016; Katsirea, 2016; Knowles & Mudge, 2016). Part of the challenge stems from being able to identify the native ad content in the first place, and secondly the difficulty in
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trying to regulate advertising in the online environment, where content is not necessarily confined to local markets, and can extend internationally to consumers in other countries (Katsirea, 2016; Matteo & Dal Zotto, 2015).
While academic researchers have started to examine native advertising from the perspective of the consumer (Wu et al, 2016; Wojdynski & Evans, 2016; Sweetser, et. al. 2016) we are still yet to fully understand it from the broader perspective of the other stakeholders – specifically, publishers, agencies, brands and academics. This study aims to examine the opinions of stakeholders, and in particular their view on the elements that are unique to native advertising and how it is different to other terms.
Further, using the Power-Responsibility Equilibrium (PRE) theory, this research will examine the balance of power and responsibility between the stakeholders and the consumer. Specifically, it will investigate the stakeholder’s perception of their legal and ethical responsibility in connection to native advertising and the risks associated with using it.
To provide context for this study, the following section will examine relevant literature and industry discussion to establish how native advertising has emerged by first reviewing advertorials - an advertising approach similar to native advertising. Secondly, the changing advertising environment will be discussed and the new challenges that have arisen online for advertisers and publishers. Next, the emergence of native advertising as an important advertising tool will be explored and the various definitions from academic and industry sources and similar terms will be reviewed. And lastly, this chapter will present a discussion of the criticisms of native advertising, the potential risks, and ethical and regulatory difficulties.
2.2 ADVERTORIALS
The term advertorial is a combination of two terms - “advertisement” and “editorial” (Wang, Yu, Dong, 2015). By definition advertorials are paid-for, commercial messages that simulate the content of a publication in terms of design/structure, visual/verbal content, and the context in which it appears (Cameron, Ju-Pak, & Kim,
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1996; Ju-Pak, Kim, & Cameron, 1995). Often written to appear as editorial content, advertorials are essentially an advertisement with a large amount of information about a product or service intentionally designed to blend into the surrounding content so that consumers are unaware that the content they are consuming is an advertisement (Kim, Pasadeos and Barban, 2001). Advertorials are typically situated within the editorial section of the paper or magazine away from other advertisers or advertising sections (Rinallo & Basuroy, 2009).
Brown and Waltzer (2005) identified three types of advertorials. 1. An “Image” advertorial, which focuses on creating positive impressions or images of the sponsored advertiser. 2. “Advocacy” advertorials, which are designed to win support for controversial situations such as a political issue or political party, and 3, “Journalism” advertorials, which are used to attract attention to a particular subject.
Advertorials are considered far less obvious than traditional advertisements and are not as easily recognised by readers (Stout Wilcox and Greer; 1989; Kim, Pasadeos and Barban, 2001). This is part of their appeal to advertisers, because the advertorial format breaks from conventional forms of advertising that audiences have become accustomed to and are tuning out from, by offering something different and cutting through the advertising clutter (Ju-Pak et al., 1995). By blending into the surrounding editorial content, it is believed that the overall effectiveness of the advertising message is increased (Eckman and Lindof, 2003).
Studies into editorial content found that people were far more likely to read editorial content than advertising content (Elliot, 1984) often with the purpose of gaining information, to be entertained, or to explore a topic of interest (Attaran, Notarantonia & Quigley, 2015). Editorial content is also often perceived as more credible than advertising messages and more unbiased than an advertising message that typically only promotes positive aspects of a product (Batinic & Appel, 2013; E. Van Reijmersdal, Neijens, & Smit, 2005; E. A. Van Reijmersdal, Neijens, & Smit, 2010).
Advertisers benefit from consumers thinking that an advertorial is an editorial while still being in control of the advertising message (Eckman and Lindlof, 2003; Kim et al. (2001). Van Reijmersdal, Neijens & Smit (2005) found that audiences thought a
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blend of advertising and editorial content was more “amusing, informative, and less irritating” than traditional advertisements.
In terms of outcome success numerous studies suggest that consumers are more likely to elaborate on the content of the advertorial than traditional advertising messages, and therefore are more likely to remember the message (Lord & Putrevu, 1993, Wilkie & Farris, 1974). Further, readers were more likely to have favourable attitudes and an increased willingness to purchase the advertised products after reading an advertorial than a conventional advertisement, due to the decreased knowledge of the persuasive intent of the advertorial (Kim & Hancock, 2017; Attaran, Notarantonia & Quigley, 2015; Wang, Yu and Dong, 2016). Lennon and Kim suggest that a possible reason for this could be that relate to the higher amount of information delivered to readers in an editorial or advertorial (2000).
Critics of advertorials question the ethical nature of advertorials suggesting that because they blur the line between advertising and editorial content they can confuse and can mislead readers (Kim & Hancock, 2017). Advertorials push the boundaries of consumer trust and advertiser responsibility, because they are intentionally designed to look like something other than an advertisement.
Despite the controversy around advertorials and the concerns over their deceptiveness, the use of the advertorial format grew in popularity in the 80’s and 90’s and later in print media and television. In the late 90’s, advertorials moved into online environment predominately in the form of online magazines (Ju-Pak et al., 1995; Stout, Wilcox, & Greer, 1989).
2.2.1 How advertorials were regulated and who was responsible
In response to the ethical concerns about advertorial deception and confusion, the American Society of Magazines (ASM) introduced a set of voluntary guidelines in 1989. These were then later adjusted in 1997 to include advertorial use in Internet based magazines (Kim, Pasadeos, Barban, 2009).
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Similarly, the UK and Australia, introduced codes that were regulated through industry bodies such as the Advertising Standards Authority (ASA), and the Advertising Standards Board (ASB) and the Australian Press Council (APC). The codes, though not backed by legislation, strongly recommended that advertorials were clearly labelled and identifiable as an advertisement. Compliance was self- monitored internally by the publisher and was typically enforced through competitive and consumer group pressure within regional markets (Montibeler, 2014).
In addition to these guidelines, laws in Australia, USA and UK also offered protection to consumers against advertising that was considered misleading or deceptive. Though importantly, the absence of labelling in Australia does not necessarily suggest that an advertisement is intentionally deceptive or misleading (Conversation, 2014).
For print media, the use of explicit labelling such as using the word “advertisement” “advertising feature” or “special feature” at the top of each page in larger font than the body text of the editorial was recommended by the ASM and APC to visually separate advertorial content from the rest of the publication and to signal to the consumer the commercial intentions of the content (Australian Press Council, n.d.; Kim & Hancock, 2017).
However, despite the introduction of advertorial guidelines, advertisers did not always follow them. At the height of advertorial use in the late 90’s studies found that at least one third of advertisers chose to ignore the guidelines for various reasons, and further, only one fifth of those that did use labels followed the guidelines set by the ASM with several other variations used instead (Cameron & Ju- Pak, 2000; Cameron et al., 1996).
Despite the difficulty in enforcing advertiser adherence to the guidelines, regulation of advertorial content in the 90’s and early 2000’s was considered manageable as it was typically locally produced and confined within national boundaries and therefore was easier to identify. Also, publishers and media outlets were considered the last port of call before distribution and were considered responsible for ensuring all content followed the recommended guidelines (Pearson, 2000).
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2.3 POWER-RESPONSIBILITY EQUILIBIRUM THEORY
The Power-Responsibility Equilibrium (PRE) theory is useful here to examine the balance of power and the responsibility of the stakeholders in the advertising process.
Originating from studies in social science and psychology, the PRE framework was developed to understand the connection between social power and social responsibility (Emerson, 1962; Davis, Fredrick and Blomstrom, 1980). It has been applied to various relationships in the business environment, such as franchisor and franchisee (Vlosky, Wilson & Vlosky, 1997), the firm and customer (Lwin, Wirtz, & Williams, 2007), organisations and their staff (Shenkar & Ellis, 1995) and more recently consumer privacy and firms (Krishen, Raschke, Close, & Kachroo, 2017).
The PRE framework proposes that social power and social responsibility should work hand-in-hand, in equilibrium as per Figure 2.1 below (Davis et al, 1980). This theory suggests that the party with more power carries a greater societal responsibility and obligation to create an environment where the less powerful party feels confident that they can trust the other party (Laczniak & Murphy, 1993; Lwin et al., 2007).
This model has been used to understand the relationship of power and ethical responsibility and what can occur if there is abuse of this power, or if the equilibrium of this power shifts. This theory suggests that if the more powerful party chooses greater dominance and less responsibility over the other party, they are likely to lose in the long term as the other party pushes (typically through government forces such as regulation) back to lessen their power (Davis et al, 1980). This model demonstrates that power holders can predict whether their relationships will be damaged depending on their actions to abuse this power (Krishen et al., 2017; Lwin et al., 2007).
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Figure 2.1. Power-Responsibility Equilibrium Theory
2.3.1 Power-Responsibility Equilibrium Theory and Advertorials
Using this framework in the context of the relationship between stakeholders (agencies, brands and publishers) and the consumer, we can identify that traditionally the stakeholders have been the power holders. They held information about the product and the power to persuade the consumer. With this power, the stakeholders carried the ethical obligation and responsibility to provide truthful, accurate, and transparent information to the consumer. Murphy (2009) suggests that social responsibility implies that the power holder knows and is “conscious of the scope of their responsibilities and is able to act on them”.
The use of advertorials disrupts the balance in the equilibrium of power and responsibly tipping power even further away from the consumer in favour of the stakeholders. By being less obvious and intentionally blurring the lines of advertising and editorial content so that the reader is not always aware that the content they are consuming is an advertisement, demonstrates reduced ethical responsibility (Spence, Quinn & Dunn, 2011). This makes it more difficult for the consumer to make an educated and well-informed decision (Kim & Hancock, 2017) (See Figure 2.2).
To keep the balance of power, print advertorial guidelines (as detailed above through the ASM and APC) were introduced and regulated through industry bodies to protect consumers and enable them to be able to identify advertorial content as an advertisement (APC, 1996; Cameron, Ju-Pak, & Kim, 1996). By following these
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guidelines the stakeholders demonstrate ethical responsibility and rebalance the power-responsibility back into equilibrium. Further if one of the stakeholders such as the agency or brand did not demonstrate responsibility by including a label, the balance could be re-established through the publishers’ insistence that all advertorials were labelled.
Figure 2.2 Loss of equilibrium - unequal balance of power and responsibility
2.4 THE ADVERTISING ENVIRONMENT HAS CHANGED
The advertising environment has changed dramatically over the last decade, due primarily to the advancement of digital technology and the increased accessibility of mobiles, tablets and rich media content. Technology has changed how consumers connect, when they connect, and where they connect (Anderson, Steen, & Stavropoulos, 2017; Labrecque, vor dem Esche, Mathwick, Novak, & Hofacker, 2013; Schultz & Schultz, 1998).
With greater access on the go, the Internet has become a fundamental part of our daily lives for both work and pleasure, extending into every facet of our lives (Anderson et al., 2017). We now go online for everything from searching for information, for games and entertainment, to connect with others via social media, to read blogs and forums, to share information with peers, and for commercial transactions such as conducting business and shopping (Jothi, Neelamalar, & Prasad, 2011; Bright, 2012; Schultz & Peltier, 2013; Anderson et al., 2017; Wallace, 2014).
The Internet and social media have also changed how we communicate with each other, how we engage and interact with brands, and how we expect to be
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communicated with from brands. Traditionally communication from advertisers was one-way, now communication is two-way and multi-dimensional, enabling consumers to respond and connect more easily with brands (Berthon, Pitt, & Campbell, 2008).
Marketers used to control their own marketing communication; now consumers are influencing this delivery, often creating and distributing it themselves (Schivinski & Dabrowski, 2016). Consumers are now very much part of the process and are considered both consumers and creators of content using blogs, YouTube and other social media platforms to share content (McMillan & Childers, 2017) With this change, consumers now want to be engaged differently. They want advertising content that informs, entertains and educates (McShane & Sabadoz, 2015; Schivinski
& Dabrowski, 2016; Stafford, Stafford, & Schkade, 2004).
2.4.1 Consumer empowerment
With consumers constantly connected, it has shifted the power dynamic between producer and consumers. With immediate access to a wide range of information about products and competition, consumers are now considered to be “well-informed and armed with information” (Denegri‐Knott, 2006). This has empowered consumers in the marketplace who are now arguably more dominant in the relationship. The producer (advertiser) who previously controlled the product, the media environment, and the information available to consumer is now driven by what consumer’s want, when they want it, and how they want it, on their terms (Deloitte, 2014; Rust & Oliver, 1994; Schultz & Schultz, 1998).
Consumer empowerment is defined as ‘the ability to exert power and influence in the market’ (Adkins & Ozanne, 2005). It is also considered to be the ‘power to choose’ (Broniarczyk and Griffin, 2014; McShane & Sabadoz, 2015; Shankar et al., 2006). Although some early marketing theory suggests that consumers have always had power to demand goods and services and choose (Kotler et al., 2006), consumers now hold more power in the relationship than before, and as a result are empowered to demand more of brands.
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Denegri-Knott identified four key strategies that enable consumers to become
empowered in the online environment (Denegri‐Knott, 2006). These include:
1. Control over the relationship – in the context of advertising, consumers can choose to engage or ignore brands by following by or subscribing to channels and pages, and conversely disengaging by following, blocking or unsubscribing (Campbell & Marks, 2015). 2. Information - consumers can search and use information to improve their purchase decisions, review opinions, and use it to question advertisers. 3. Aggregation - consumers can group together through forums or web communities etc. with other like-minded individuals to discuss topics and discuss issues. 4. Participate - consumers can participate and choose to create content themselves. An opportunity that was not as easily available to them in the offline communication environment.
A fifth strategy of self-liberation was added more recently by Kerr, Mortimer, Dickenson and Waller (2012) suggest that consumers are empowered through self- liberation. Through the freedom of sharing their views with others online, consumers grow their social connection and social capital.
2.4.2 Advertising effectiveness online
While some of the earlier advertising methods used online such as display, banner and pop up ads are still considered popular and frequently used online, their overall effectiveness to cut through clutter and engage with consumers has come into question (Baek & Morimoto, 2012; Cho & as-, 2004; Speck & Elliott, 1997a, 1997b).
On average it is estimated that a consumer will be exposed to anywhere from 4,000- 10,000 advertising messages a day (Simpson, 2017). This is resulting in consumers feeling bombarded and irritated and avoiding advertisements they perceive as getting in the way of what they are trying to achieve online (Baek & Morimoto, 2012; Cho & as-, 2004; Kelly, Kerr, & Drennan, 2010).
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Studies into ad avoidance have found that consumers are more likely to avoid advertising if they feel that it is not relevant to them, if they are sceptical towards the advertising medium, or if they have negative expectations about their experience (Kelly et al., 2010).
To avoid advertising online consumers are increasingly filtering emails, using ‘do not track’ programs, and ad-blocking software (Endicott et all, 2006; Yoo, 2009; Borges, 2009; Johnson, 2013; PageFair, 2017) A report presented by PageFair in 2017 on the global usage of ad blockers revealed that approximately 615 million devices were using ad-blocking software and that number is expected to continue to grow. It is predicted that as ad blocker technology evolves that at least half of all advertising online will be blocked from the consumers view within the coming years (Budak, Goel, Rao, & Zervas, 2016).
Advertisers are well aware of the issues of advertising avoidance -because of scepticism, reader irritation, a lack of perceived advertising relevance, or previous negative experiences, and the increased use of ad blockers, and acknowledge that these are key reasons for the lack success when advertising online (Baek & Morimoto, 2012; Nielsen, 2012; Simpson, 2017; Kelly et al., 2010).
2.4.3 Changes in the publishing environment
Publishers have also faced their own set of challenges in recent years due to the proliferation of the Internet and the fragmentation of channels both on and offline. Once profitable publishers are now struggling with rapidly shrinking profit margins from a loss in newspaper and magazine subscriptions as consumers move away from traditionally printed publications to sourcing their information online (Bakshi, 2014; Barthel, 2017; Einav & Lipson, 2015; Mitchell & Rosentiel, 2012).
The task of converting consumers from print to subscription based services online has also proved challenging for online publishers as readers who once paid for printed content are now consuming free content through blogs, free news sites, social
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media platforms, discussion boards, and niche forums both from domestic and international sources (Anderson et al., 2017; Bakshi, 2014; Herrman, 2016; Ponkivar, 2014).
Publishers such as News Corporation owned by Rupert Murdoch recently announced massive losses in the UK and Australian due to dropping newspaper values, print sales and a loss in advertising revenue (Mason, August, 2017). Recent reports from the US also indicate that daily newspapers both digital and print are facing similar struggles with reports showing an 8% loss, for the 28th consecutive year (Barthel, 2017).
In terms of reader satisfaction, publishers have grappled in recent years with complaints from readers that media publications have a higher ratio of advertising to editorial content and are irritated at paying for advertising content when they can source similar content for free elsewhere (Rotfeld, 2006). Making it increasingly difficult for publishers to make advertiser revenue and keep readers happy.
The loss to publishers has been exacerbated further by the loss of revenue from advertisers who are choosing to spread their advertising spend across multiple platforms and markets (Bakshi, 2014; Herrman, 2016; Matteo & Dal Zotto, 2015). Earlier this year publishers in Australia announced a dramatic drop in spend from advertisers for 2018 with magazine advertising down 42.5%, newspapers down by 36.4%, and advertising down on digital platforms by 27.6% (Kelly, 2018).
The combination of securing advertiser spending, the losses from print revenue stream, the difficulty in converting consumers to subscription and the decline in consumer satisfaction has placed increasing pressure on publishers to look for new ways of monetization to stay afloat.
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2.5 EMERGENCE OF NATIVE ADVERTISING
As consumers have become savvier and more powerful in the online environment, they have also become more difficult to connect with. Consumers now want to be engaged differently. They do not want overt sales tactics, and are not interested in engaging with traditional forms of advertising content (Campbell & Marks, 2015). They are looking for content that offers more value, which informs or entertains (Harms, Bijmolt, & Hoekstra, 2017; Tutaj & van Reijmersdal, 2012).
Brands have come to recognise this and in response have moved towards utilising more content-focused advertising strategies (Lieb, 2011; WARC Report, 2014). They discovered they needed to be subtler in their approach by adapting their advertising message and approach to the platform they are advertising on. For example in social media, brands moved away from being more serious towards intentionally being more playful and conversational as a way to engage and not annoy consumers (Campbell & Marks, 2015).
In an attempt to find new ways to connect and engage readers, publishers were forced to explore new options for monetization (Sahni and Nair, 2006, Sonderman and Tran, 2013, eMarketer 2014). In 2011, publishers began to offer a new advertising product that blends commercial messages into content that consumer’s want. An approach publishers started referring to as native advertising (Matteo & Dal Zotto, 2015). Soon after its inception, native advertising gained significant traction across large publishers such as Huffington Post, Forbes, and Time Magazine.
Native advertising, like sponsored content and advertorials, uses a pull strategy that aims to attract consumers through content that provides value and information they are searching for (Ahrens, 2013; eMarketer, 2016; Native Advertising Institute, 2017; Fisher, 2017; WARC Report, 2014). By offering value readers are more likely to click on the link or engage with the content (eMarketer, 2016).
Pull strategies are intentionally subtle in their message delivery to create demand and encourage the customer to seek out the product (Kotler, Wong, Armstrong, 2005;
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Kotler & Armstrong, 2012). Importantly, this strategy is only successful if the content is interesting and of good quality (eMarketer, 2016).
In contrast, push strategies use more obvious tactics to present an advertising message directly to customers to create demand for a product (Eder, 1998). Examples include traditional forms including magazines, newspapers, and online as a display ad in a social media feed or a web banner (Eder, 1998; Leggio, 2013).
Push and pull methods offer different advantages depending on the advertising objectives. A key benefit of using pull messages is that it allows consumers to control the degree of information they receive and can be a determinant of whether consumers are open to the advertising message or reject it (Kelly, Kerr & Drennan, 2010; Schultz, 2008).
2.5.1 Why native advertising is popular
Native advertising has quickly become a popular advertising tool in recent years because of the opportunities it presents brands and publishers (Harms et al., 2017). To advertisers, native advertising is perceived to be the answer to advertising clutter and avoidance issues. Native advertising increases engagement through offering their audience content they want to read and are interested in, answering consumers needs online for information and entertainment (Wasserman, 2013; Ponkivar, 2014; Jorner, 2017). Some have even suggested that native advertising isn’t even advertising, but is simply content that consumers want (Vega, 2013).
Bahski (2014) offers his opinion for why he believes advertisers are rapidly adopting native advertising. First, because consumers believe the content was written by an independent source, the publisher, it is likely to be considered trustworthy and therefore consumers are more “likely to read, share, and believe content”.
Secondly, because native advertising offers a new way for advertisers to present advertising content in a way that is interesting, engaging and more likely to entertain consumers. Native advertisements are designed to be more appealing both in terms of
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content offered and look. Consumers have chosen to go to a particular website because of the way the content is delivered both functionally and aesthetically in that space. Cummins (2013) also confirms this idea suggesting that native advertisements have a greater focus on delivering contextually relevant advertising in content that adds to the consumer experience and doesn’t subtract from it.
And lastly Bahski (2013) believes that native advertising allows “advertisers to influence the topics and themes that are covered by a publication”. This last point suggests that brands and advertisers hold a level of power over the publisher. While publishers have always relied financially on revenue from advertisers, recent challenges experienced by publishers such as attracting paying subscribers, the fragmentation of channels, and increased competition, have exacerbated this dependence (Greenslade, 2016).
Native advertising potentially offers higher levels of engagement (Ponkivar, 2014). A recent study which surveyed almost 4,770 people using eye-tracking technology, revealed that on average consumers engaged with native advertising content 53% more than traditional banner advertisements online (Sharethrough, 2013). And because native ads are almost always written like an editorial or take a whole page instead of just a small ad along the side or top, they are more likely to guarantee the reader’s whole attention when they click onto the page (Bahski, 2014).
Because of the focus on content, native advertising also increases the likelihood of it being shared and passed onto peers. Sharethrough (2013) found that 32% of respondents said that they “would share [native ad content] with a friend or family member” versus only 19% who would be willing to share a display advertisement.
From the publisher’s perspective, native advertising offers new hope to attract advertisers and generate new revenue streams to claw back the massive losses from their print streams (eMarketer, 2014; Probst, Grosswiele, & Pfleger, 2013).
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2.5.2 What is native advertising?
Native advertising has evolved at such a rapid rate that a formal common definition and conceptualisation of the approach has not yet been established. However, there are various opinions and versions within industry and academic papers that offer insight into what it is (Matteo & Dal Zotto, 2015). The basic premise shared within industry is that native advertising, much like advertorials, is commercial messages designed to appear as though they are “native” or naturally part of the site they sit on (eMarketer, 2014). Content is created to be contextually relevant to the page and surrounding content. It is designed to not interrupt the reader’s experience, but instead add to it (Cummins cited in Ward, 2013; Matteo & Dal Zotto, 2015; Ponkivar, 2014). “This way advertising is perceived as non-pervasive and hence primarily identified as informative content rather than traditional advertising” (Matteo & Dal Zotto, 2015).
One of the most commonly quoted definitions within industry presented by the IAB in 2015 suggests that native advertising is “paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong”.
Table 2.1 below presents some of the recent definitions used within industry and academic papers to define native advertising.
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Table 2.1 Native advertising definitions in use
“Native advertising is the politically correct term for advertorial. Or rather it’s an upgrade, the digital version The Guardian (2013) of an old practice”
“Native [advertising] is “brand journalism” and getting SAP (Clark, via eMarketer, the people, the profiles and the personalities out there”. 2014)
“Native advertising is content that bears a similarity to the news, feature articles, product reviews, Federal Trade Commission entertainment, and other material that surrounds it (FTC) USA (2015) online”
"Paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the IAB USA (2015) platform behavior that the viewer simply feels that they Industry belong".
“Paid for content that is assimilated to appear like surrounding editorial content in the online environment. These principals also incorporate native advertising IAB Australia & AANA (2016) distribution methods in automated content aggregator and content matching tools”
“Native advertising in publications, otherwise known as “advertorial,” is paid content or advertising that is Forbes (2017) placed within part of a newspaper or magazine and intended to look like the other content around it”
“Textual, pictorial, and/or audio-visual material that supports the aims of an advertiser (and is paid for by the Couldry and Turow (2014) advertiser) while it mimics the format and editorial style of the publisher that carries it”.
“Native advertising is a term used to describe a spectrum of new online advertising forms that share a Campbell, Marks (2015) focus on minimizing disruption to a consumer’s online experience by appearing in stream”
“A tactic which blurs the lines between public relations, Sweetser, Ahn, Golan, advertising and marketing” Hochman (2016)
“An umbrella term used interchangeably with sponsored content, partner content and branded journalism”
Wojdynski and Evans (2016) “The practice by which a marketers borrows from the Academic Papers credibility of a content publisher by presented paid content with a format and location that matches the publishers original content” “Native advertising is a format of advertising that mimics the other non-sponsored content on the Sahni and Nair (2016) medium”
“Native advertising is an ad format that integrates brand Jiang, McKay, Richards, & messages into natural parts of the media environment in Snyder (2017) an attempt to make the content not look like an ad”
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Examination of the above Table 2.1 demonstrates a lack of consistency among industry and academic expert about what it is exactly; it does highlight several recurring dimensions. 1. That native advertising is a paid form of advertising, 2, that it is content focused, and 3, native advertisements are designed to fit the aesthetic of the site.
2.5.3 Native advertising and other terms
Examination of the above table raises many questions about whether native advertising is the same thing as sponsored content, branded content, or product placement? Is it really a new idea? Or is it just a fancy name for an old tactic? Some argue that native advertising is not a new idea, but is simply a “digital upgrade” of an old concept born from the merging of advertorial concepts and social media (Coyne, 2014; Campbell & Marks, 2015; Matteo & Dal Zotto, 2015; Staplefoote, 2014).
The difference, according to several experts, is that native advertising is thought to offer more value than advertorials to the reader through more relevant and highly tailored content (WARC Data, 2014; Sagness 2014; Sophocleous, 2014). Other suggestions include the idea that native advertisements are created with the intention that readers will share the content with their peers to generate a buzz and to increase reader engagement (Salmon 2013; WARC data 2014).
While advertorials are considered in many respects to be similar to native advertising, the degree to which they are “camouflaged” is also thought to be different. Native advertising is thought to be more seamless than standard advertorials (Brenzel, 2014) sponsored or branded content (Sagness, 2014) and is created specifically for one channel only both in terms of format and content and is not able to be altered and reused for use on another platform (Mitch, 2013).
In terms of who creates native advertising native advertisements are viewed as being produced by the publisher of the platform for a more seamless integration, whereas advertorials are typically thought of as created by the brand (Sophocleous, 2014).
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There are various opinions of what native is and how it is different to other terms in use however they are often inconsistent and tend to vary according to whether they are offered by journalists, agencies, brands or academics. Mitch (2013) suggests that publishers love native advertising because “they can make it mean whatever they want it to mean”.
The lack of a definition is causing confusion and is inhibiting native advertising’s progression as an approach (Campbell & Marks, 2015; eMarketer, 2014; Lovell 2014, Mitch, 2013). While there is agreement on the basic premise of what it is, its dimensions have yet to be formalised. A formal definition would propagate common language between practitioners and scholars; would add to the consistency of research, reporting, planning, and importantly regulation purpose (Borst, 2013; Campbell & Marks, 2015).
Although Altimeter, the Interactive Advertising Bureau (IAB) and more recently the Federal Trade Commission (FTC), have offered descriptions of what they believe native advertising to be, they fail to specify how native advertising fits with other forms of advertising and other publisher offerings.
This leads to the first important research question:
RQ1: What are the elements that define native advertising and make it unique to other forms of advertising or publisher content?
2.6 CRITICISMS AND NEW CHALLENGES WITH NATIVE ADVERTISING
Although native advertising is being heralded as the answer to a myriad of publisher and advertisers challenges, it is not without issue. Native advertising has received a lot of criticism for being intentionally deceptive and misleading and abusing consumer’s trust (Berry, 2014; Dumenco, 2014; Wasserman, 2013). Critics also warn that native advertising is likely to lead to a media credibility crisis if people lose trust
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in the publication sensing that editorial content is not independently written but instead written with bias (McNamara, 2014; Schauster, Ferrucci, & Neill, 2016).
2.6.1 Risk for Deception
Native advertising’s effectiveness lies in its ability to blend seamlessly into surrounding content making it difficult to be easily identified as an ad (Carlson, 2015). This is viewed as a “double edged sword”, with critics suggesting that it has the potential to cause “harm” to consumers who are unaware that the content they are consuming from the publisher is not the unbiased editorial content they assume, but is instead an advertisement (Vega, 2013; Ponkivar, 2014; Taylor, 2017; Wojdynski & Evans, 2016).
Balasubramanin (1994) suggests that when marketers use covert marketing strategies to conceal the advertising nature of the content, they may intentionally or unintentionally deceive a consumer into processing information differently than if consumers were aware.
Friedstad and Wrights (1994) Persuasion Knowledge Model (PKM) suggests that consumers consider the source when processing and decoding information from the sender. If consumers recognise the sender as a seller, they process information differently. A consumer’s persuasion knowledge is an important factor in helping consumers interpret information and avoid being “fooled” into buying something they don’t need (Taylor, 2017).
Appropriate disclosure may help the consumer identify that the content is an ad and help them to process, cope, and respond to persuasion attempts from advertisers (Friedsted and Wright, 1994).”
The Federal Trade Commission (FTC), a regulatory body in the USA, considers deception to be advertising material that “is likely to affect consumers’ choices or conduct regarding an advertised product or the advertising for the product, irrespective of the medium”(FTC, 2007; Sahni & Nair, 2016).
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Whether deception is intentional or not, studies have found that native advertisements are not always obvious to the consumer (Campbell & Marks, 2015). This has raised ethical questions around trust, and the potential for brands and publishers to abuse and potentially lose a consumer’s trust (Garfield, 2014).
Previous studies show evidence of backlash when consumers feel they have been tricked. Responses range from consumers developing less favourable attitudes towards the brand (Craig, et.al, 2012) or distrusting of subsequent advertising communication from the same brand (Darke & Ritchie, 2007) or worse, boycotting products (Martin & Smith, 2008).
2.6.2 Risk for Reduced Trust
Abusing consumer trust has been highlighted as a key concern when using native advertising (Lazauskas, 2015).
Trust is described as a multifaceted concept that includes dimensions of emotion, cognition and behaviour and is central to both personal and business relationships (Lewis & Weigert, 1985; McKnight & Chervany, 2000; Soh, Reid, & King, 2009). It is necessary in a relationship when there is a “perception of risk that depends on the actions of the other party” (Midha, 2012). For trust to occur there must be complete confidence that the other party has integrity and is reliable (Moorman, Deshpande, & Zaltman, 1993; Morgan & Hunt, 1994).
In advertising, trust exists only when a consumer has “confidence that advertising is a reliable source of product/service information and willingness to act on the basis of information conveyed by advertising” (Soh et al., 2009).
Trust has been found to improve a consumer’s ability to evaluate, process and respond to an advertisement (Soh et al., 2009) as well as influence a customer’s willingness and intention to engage and transact with a vendor online (Gefen, 2000) and increase a consumers intention to revisit websites and to recommend the site to others (Liu, Marchewka, Lu, & Yu, 2005; Midha, 2012).
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Conversely mistrust has been found to breed further mistrust and is likely to lead to the break down of commitment in relationship or complete loss of the relationship (McDonald, 1981). Trust is an area that advertisers struggle to gain, as consumers generally tend to distrust advertising (Ball, Manika, & Stout, 2016; Wang, 2006).
Native advertising has been criticised for threatening to destroy consumer trust for the brand and also for the publisher if they discover the content they are reading is not an unbiased piece, but is instead an advertisement (Hansen, 2017; Garfield, 2014, McNarama, 2014).
2.6.3 Risk to Credibility
Native advertising borrows the credibility of a publisher’s original content to deliver an advertising message. Native advertising is therefore likely to be better received by the reader because they believe it to be the opinion of the publisher (Wojdynski & Evans, 2016). Research has found that source credibility is strongly linked to positive attitudes and behaviours from consumers towards an advertising message (Choi & Rifon, 2002; Wu et al., 2016) supporting this idea and indicating why native advertising is likely to be considered effective.
A consumer evaluates the credibility of advertising by evaluating the truthfulness, bias and honesty of the advertising (Friestad & Wright, 1994; Soh et al., 2009). Previous studies have found that increased trust and source-based confusion usually leads consumers to trust the subject of the advertisement more than they would otherwise if they knew it was an advertisement (Bakshi, 2014).
Nelson & Park (2014) found that a consumer’s perceived credibility of a source reduces when they become aware of persuasion attempts by an advertiser through covert marketing strategies. And importantly, even in instances where there is appropriate disclosure a consumer’s perception of credibility lessens because of the lack of perceived ethics around covert marketing strategies.
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Wu et al (2016) suggests that there are two sources of source credibility that are important to consider when using native advertising, - the advertiser (corporate or marketer) and the media outlet - publisher of the content.
While damaging both the advertiser and publisher credibility is a likely possibility when consumers realize that the content they are reading is actually advertisement, Bahski (2014) suggests “because [publishers] existence is in danger, the current news media are willing to take these risks in order to stay afloat” (Bakshi, 2014).
The above has highlighted that trust, deception and credibility are just a few of the potential risks discussed within industry and academic literature that brands and publishers are likely to face if they adopt a native advertising strategy. Little is known however, about how the stakeholders view these risks and whether they view them as an issue. Are the risks identified above consistent with what the stakeholders believe are the biggest risks? Do they see them as a potential issue? And are there other areas of concern? This leads to the second research question.
RQ2: What are the potential risks when adopting a native advertising strategy?
2.6.4 Difficulty with regulation and ethical responsibility
Unlike traditional media that is noticeably placed by an advertiser, native advertising steps outside of the obvious advertising formats utilising methods, which are deliberately more covert (Sahni & Nair, 2016). Extending over various platforms and ad types making it difficult to identify as an advertisement, because it does not fit a particular mould. While this can be seen a benefit for advertisers, it has added to the complexity of regulating native advertising.
The topic of regulation has created a divide amongst advertisers. Some have called for tighter regulation worried that native advertisements are likely to cause harm or irritate consumers when they realise it is advertising (Bakshi, 2014) Whereas others believe that over regulating it will impede the creativity and the effectiveness of the advertisement (Sahni and Nair, 2016).
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Adding to the complexity of regulation, unlike traditional advertising such as newspapers or television, digital media is not limited to physical borders (Katsirea, 2016; Matteo & Dal Zotto, 2015) Consumers can access content immediately from various markets nationally and internationally. Advertisers in Europe can run native ads concurrently across various platforms within America, Africa and Australia making extremely difficult to regulate.
Katsirea (2016) suggests, while consumers have welcomed access to a wealth of content online, it has become a difficult problem for regulators who “are trying to accommodate for new technology and the new market realities within existing governance structures”. Self Regulatory Organizations, created in traditional media environments, are bound by national boundaries, and have limited control in the online advertising environment (Kerr, Mortimor Dickenson, Waller, 2012). This has raised important questions about how native advertising should be regulated and whether it is even possible to regulate through local regulatory bodies.
In 2016, the Federal Trade Commission (FTC) responded to criticisms about native advertising releasing a set of guidelines for American advertisers. Guidelines included suggestions for increasing transparency through the labelling of native ads such as “sponsored content” or “paid advertisement”. Since its release, other regions such as Australia and the UK, have proposed similar for labeling and transparency. It is important to note that these are recommendations, not regulation.
Acknowledging the difficulty in policing this type of advertising, the FTC strongly recommends that all advertisers be responsible for policing their own advertising, and that advertisers need to consider their target markets when doing so. For example, they should adjust their labelling/transparency so that they audiences is aware it is an ad, particularly if they are advertising to children, or those who are vulnerable (FTC, 2015, Knowles & Mudge, 2016).
However the Interactive Advertising Bureau (IAB) shared their doubts about some elements of the guidelines saying, “While guidance serves great benefit to industry, it must also be technically feasible, creatively relevant, and not stifle innovation,” Brad
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Weltman, IAB Vice President of public policy stated. (As quoted in McPherson, 2016, p.9).
Despite the introduction of guidelines in 2015, recent studies have found two out of five advertisers (37%) are choosing to ignore these guidelines opting instead to avoid labelling causing confusing and increasing the difficulty in being able to identify the content as an advertisement (MediaRadar Report in Forbes, 2017). Advertisers are aware of the challenges in regulating this type of advertising and as a result some are choosing to exploit the opportunity by pushing the boundaries of what is ethically acceptable.
2.6.5 Native advertising and consumer power
The lack of transparency and difficulty in regulating native advertising has again blurred the balance of power between consumers and advertisers, shifting the balance back in favour of the advertiser. Without transparency, consumers arguably do not have enough information to adequately make a judgement on the information they are consuming and are essentially at the mercy of the advertiser.
Unlike advertorials which were regulated by the publisher, through managing font size and consistent labelling standards across publications, native advertising presents further challenges about how to do this when formats and style types do not easily fit into a typical standard and are not always easily identifiable.
Commentators within industry have suggested that the covert nature of native advertising is likely to cause a consumer backlash as they buck against advertisers and media outlets likely resulting in a “crisis of credibility, and potentially an economic crisis” (McNamara, 2014). To avoid this crisis, McNamara (2014, para. 18) suggests that it is in the best interest of advertisers and publishers to “pay attention to self-regulation” and ethical standards.
The next question is, who should be responsible? Because there are many hands involved at various stages of booking, designing, creating and publishing native
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advertising, there may be less of a likeliness or desire to want to take on the ethical responsibility. The unwillingness to take ethical responsibility is often referred to as “passing the buck” (Drumwright & Murphy, 2004; Schauster et al., 2016).
The debate over regulating native advertising has raised several questions. In particular, if format regulation is not feasible, then what should regulation of native advertising look like? Who should be held ethically responsible, and how they should be held accountable? This leads us to the next research question:
RQ3: How should native advertising be regulated and who ethically should be responsible for this?
2.7 THE FUTURE OF NATIVE ADVERTISING
Opinions for the future of native advertising are predominately optimistic. Many industry experts suggest that it will only go from strength-to-strength evolving and adapting to different opportunities online. Experts predict that it is likely to continue to grow in popularity and is likely to generate as much as 74% of future advertising revenue in the coming years (DeMers; 2018; Gallagher, 2017; Jorner, 2017).
Some experts are quite specific in their predictions suggesting that we are likely to see more native advertising being utilised in the form of video, as more publishers with mobile feeds move towards offering native video opportunities (Keane as cited in Armstrong, 2017; Gallagher, 2017).
However, others disagree with the suggestion that native advertising’s future is bright instead suggesting that it is likely to be fraught with difficulty because of ad blockers. De Mers (2018) predicts that as the technology behind ad blockers continues to evolve, it is highly likely that ad blocks will start to pick up native ad content and remove them from the view of the consumer. If this is true, this is potentially even more of a threat given that ad blockers are rapidly being adopted by consumers and are even tipped to become a default feature in Google Chrome in the
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coming years (DeMers, 2018). If ad blockers threaten to remove content from view, does native advertising have a future?
Some experts also predict that despite the previous backlash to native advertising we are likely to see consumers become more accepting and comfortable with native advertising content. With views towards the blurring of lines of “church and state” becoming more acceptable and standard across publishing (Weiss, 2018). Further, Faisal Karmal, Director Digital Business at CNN International suggests that the blurring is not necessarily a negative thing, believing that going forward there is likely to be “no difference between editorial and native” and that this isn’t a problem as long as consumers are happy with the native content because it offers them a “true value exchange” (Cited by in Forbes by Armstrong, 2017).
The above views for the future of native advertising demonstrate a very broad spectrum of opinion ranging from the potential of rapid expansion to rapid extinction. Opinions suggest that the advancement in technology is likely both add to and take away from native advertising opportunities. How do the stakeholders view native advertising progressing as an approach? Do they agree that it is likely to continue in popularity or die off in the near future? This leads us to the final research question:
RQ4: What is the future for native advertising?
2.8 SUMMARY AND IMPLICATIONS
This chapter has reviewed the literature relating the native advertising. Advertorials an approach similar to native advertising was reviewed to understand how it was regulated. The theory of Power-Responsibility Equilibrium (PRE) was introduced to examine the relationship between the advertiser and the consumer and the considerations for ethical and regulatory considerations.
Next the challenges publishers are facing in the changing online environment such as losses to revenues streams, difficulty in attracting advertiser spend due to the
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fragmentation of channels were examined. Also the difficulties brands are facing in connecting with consumers due to advertising clutter and avoidance were examined. The emergence of native advertising as a new approach in response to the challenges faced by both advertisers and publishers was reviewed as well as the criticisms and challenges related to both defining and regulating it.
Through examination of the literature and industry discussion various gaps were identified which require further understanding. As a result, the following overarching research question was developed to guide this study:
“What is native advertising and what are the ethical and regulatory considerations”
This will be explored through the four research key questions highlighted throughout the literature review. Including:
RQ1: What are the elements that define native advertising and make it unique to other forms of advertising or publisher content?
RQ2: What are the potential risks for brands adopting a native advertising strategy?
RQ3: How should native advertising be regulated and who ethically should be responsible for this?
RQ4: What is the future for native advertising?
The following chapter will outline the research methodology selected to explore these research questions, and provide justification for its selection.
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Chapter 3: Research Design
3.1 INTRODUCTION
This chapter explains the research methodology adopted to explore the overarching research question, “What is native advertising and what are the ethical and regulatory considerations?”
Specifically, this chapter will:
• Outline the aims of this study • Provide an explanation of the Delphi technique selected as the data collection method for this research, and justification for its selection • Detail the participants and the selection process used • Present the data collection procedure • Discuss the data analysis techniques; and finally • Outline the ethical considerations and limitations of the Delphi technique
3.2 RESEARCH DESIGN
Native advertising has received consideration attention due to its capacity of blending advertising content within publisher content. As such, much of the academic research to date has focused on exploring native advertising in relation to deception and credibility (Sahni & Nair, 2016; Wu et al., 2016), how consumers process native advertising versus other forms of advertising (Jiang, McKay, Richards, & Snyder, 2017), how native advertising is changing communication (Wojdynski & Golan, 2016) and factors that impact native advertisings performance (Harms et al., 2017).
To date, limited research has yet been conducted to understand native advertising from the broader stakeholder perspective, specifically how publishers, agencies,
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academics and brands perceive native advertising relative to other terms in use, and importantly their view regarding ethical and regulatory considerations.
Given that native advertising is a relatively new term within digital advertising and an emerging area of research it was considered appropriate that an explorative research approach be taken to gain an in-depth insight into native advertising and its underlying elements. Exploratory research designs seek to understand a subject area or new phenomena where little or no previous knowledge exists (Polonsky & Waller, 2014; Schindler, 2006)
Through explorative investigation, researchers will gain a better understanding into the subject area, develop concepts, and importantly create operational definitions (Cooper and Schindler, 2008). Native advertising is an area that is not yet well understood (Campbell & Marks, 2015). Scoping out basic concepts and developing a general understanding of native advertising is an essential first step in setting the scene for future research in this area as it is still within the early stages of understanding it as a new term and application within advertising online.
To explore the research question “What is native advertising and what are the ethical and regulatory considerations” it was imperative that the research method was able to provide the following outcomes:
1. The ability to capture insights from expert stakeholders across various parts of the world in different time zones and markets. This is important because unlike traditional or mainstream media that is limited by geography, online advertising (such as native advertising) can be utilised by brands for domestic and international markets and across various customer bases (Yang, 2016). Decisions to use native advertising made in the USA or UK can impact brands in other regions.
2. The ability to explore and capture underlying assumptions and information held by participants anonymously without judgement from other participants (Hsu & Sandford, 2007). This was considered crucial to
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extract honest responses and the mix of views from others in the group. The literature revealed a lack of agreement and differences in opinion about what native advertising is, and the ethical and regulatory consideration. This research needs to have a robust discussion to identify the different ideas and ensure all voices are heard.
3. Provide a framework to gain consensus on a definition for native advertising and on the views and opinions regarding ethics and regulatory considerations. There are diverse opinions across the various stakeholders.
4. An opportunity for participants to offer further insights as the research progresses by allowing them to reflect and provide additional information, enabling richer data collection. A simple survey or a single round of interviews does not allow participants to consider other viewpoints or encourage deeper reflection (Okoli & Pawlowski, 2004).
5. Time and cost efficiency. To increase the chances of initial and ongoing participation the data collection method needed to be relatively straight forward, not be time consuming, and too expensive to administer. Given the high calibre of participants required for this study, it was likely that the participants would hold higher-level positions rendering them time poor and busy.
Taking into consideration the above criteria it was determined that the Delphi technique was the most suitable for this study. The following section will explain the Delphi technique and justification for its selection.
3.3 THE DELPHI TECHNIQUE
The Delphi technique is a data collection method that gathers information through the use of open-ended questions given to a panel of experts over a series of waves or iterations, interspersed with summarised information and feedback of opinions derived from earlier responses (Dalkey & Helmer, 1963; Delbecq, Van de Ven, & Gustafson, 1975; Linstone & Turoff, 2011).
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Developed by the RAND Corporation in the 1950’s, the Delphi method is a popular explorative qualitative and quantitative technique that uses a structured group facilitation process to achieve consensus from a group of experts (Dalkey & Helmer, 1963; Linstone & Turoff, 2011; Richards & Curran, 2002).
While the Delphi method was initially developed to identify financial and technological trends in the early 50’s, it has been applied in recent years within various disciplines such as information technology, sales, and marketing research to assist with planning, forecasting, and decision-making (Gupta & Clarke, 1996; Kelley, 2007; Kerr, 2009; Linstone & Turoff, 2011; Richards & Curran, 2002)
The Delphi method is used primarily in instances where the issue is potentially problematic or sensitive and offers a framework that allows participants to voice their opinion without direct criticism or worry about how their opinion will be received (Hsu & Sandford, 2007). This was valuable to this study, as the literature review has shown a strong mix of opinions. This research design enables all participants to voice their honest opinion without the influence of peers.
3.3.1 Justification for selection of the Delphi method There are several key characteristics and advantages that are unique to the Delphi method that deem it the most appropriate for this study.
• The use of an expert panel - In a Delphi study participants are not randomly selected, but instead are purposely selected for their expertise on the topic (Linstone & Turoff, 1975). Given the relative newness of the term native advertising it was anticipated that many people might not yet be sufficiently knowledgeable enough to answer the questions accurately. This technique enabled the researchers to handpick the most informed experts for the panel instead of using the general population to enable the collection of a broader industry opinion (Linstone & Turoff, 1975, 2011). • Provide a framework to gain consensus - The Delphi technique is useful for areas that are particularly contentious or where the goal is to obtain the
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most reliable consensus of opinion of a group of experts (Dalkey & Helmer, 1963; Kelley, 2007; Kerr, 2009; Murry Jr & Hammons, 1995; Okoli & Pawlowski, 2004). While in-depth interviews offer the opportunity to extract deep insights, they do not offer the option to gain consensus or feedback from other participants. The data collection method needed to allow the sharing of ideas and opinions to do so (Okoli & Pawlowski, 2004).
• The anonymity of participants and responses – anonymity ensures participants are not influenced by the responses of other participants on the panel. It allows them to express their honest and personal views that may not necessarily be consistent with others on the panel (Dalkey & Helmer, 1963; Goodman, 1987; Hsu & Sandford, 2007; Keeney et al., 2001). • Waves for analysis. There is no cap on how many waves should be used for collecting data. The researcher was able to determine this during the process of analysis and data collection in driving consensus. This unique design element provided the researchers flexibility to explore for as long as needed to collect the necessary data and richer insights (Hasson et al., 2000). This subsequent data collection waves enables the opportunity for deeper analysis into areas of native advertising that may not have been obvious before the study. An important consideration however, is the more rounds or waves that are used; the more difficult it becomes to retain a high response rate (Keeney et al., 2001). To counteract this and to ensure high participation, the participants needed to be invested in the research topic (Keeney et al., 2001). • Independent thought. The Delphi design reduces the effect of “noise” during the group data collection process. Noise is the communication that focuses on the group interests instead of the interests of solving the research questions (Dalkey & Rourke, 1972). Noise can manipulate and distort opinions and views of participants and reduce the manipulation or coercion to conform or adopt viewpoints (Dalkey & Helmer, 1963; Dalkey & Rourke, 1972; Hsu & Sandford, 2007). With the high calibre of participants it was likely that there would be dominant personalities within the expert panel whose opinions could influence the views of participants if other group research methods were used. The Delphi process enabled that all voices were
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heard as individuals without influence and interruption as all are given equal weight and importance (Goodman, 1987; Strauss & Zeigler, 1975). • It is a qualitative and quantitative measure. The initial wave was qualitative in nature. Requiring participants to provide detailed written opinions in response to questions as well as the opportunity to change their position on hearing other views. The second wave was quantitative in nature, requiring participants to rank their agreeance to statements with a number from 0 to 100. The combination of qualitative and quantitative measures allows the researcher to delve deeper than with a purely quantitative study, yet enables an objective analysis of the final rounds of data collected, free from biasing effects (Dalkey, 1969; Hsu & Sandford, 2007; Landeta, 2006). Additionally it not only measures consensus, but the strength of consensus (Heiko, 2012). • Participants do not need to be physically present for the research. Data can be collected easily via email or phone, and is not constrained by needing all participants to answer at the exact same time. Participants are able to take their time to reflect on questions within a given timeframe (typically within a week or two). With no need to be present for the research, the potential participant pool is able to extend to all countries and time zones (Guzys et al., 2015; Linstone & Turoff, 2011). This was particularly useful for this study as it allowed the ability to capture insights and opinions from leading experts from various regions across instead of being limited to only local experts.
3.4 LIMITATIONS OF THE DELPHI METHOD
While the Delphi technique offers many positives, it is not without shortcomings (Dalkey & Rourke, 1972; Gupta & Clarke, 1996; Linstone & Turoff, 2011). These limitations were recognised and taken into consideration when planning and executing this research. These include:
• Participation –Given the high calibre of participants required for this study it was likely they would be time poor and have demanding jobs, potentially increasing the chance for a high drop out rate (Ludwig, 1997). To overcome
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this, the data collection process was designed to be straightforward and simple. Experts were offered a variety of ways to respond such as through email or phone and were given ample time to respond. Further time was also given if required. • Repetitive waves – While this process can sometimes be viewed as laborious, the cyclical nature of the Delphi technique increases the accuracy and credibility of the findings (Hsu & Sandford, 2007). To help the experts see value in the repetitive process, the importance of using the Delphi method was explained before they agreed to participate. • Question design – To ensure depth of information was extracted from the participants, special consideration was given to how the questions were designed. Semi-structured open-ended questions were used to avoid yes or no answers, and encourage the participants to expand on their answers (Linstone & Turoff, 2011).
3.5 DELPHI STUDY PARTICIPANTS
The most important aspect of a Delphi study is choosing appropriate experts for the Delphi panel. Success is considered largely dependent on the quality of the expert panel because it determines the quality of the final results (Hsu & Sandford, 2007; Okoli & Pawlowski, 2004).
Given that native advertising is fairly specific area within digital advertising online, it was important that the participants selected were knowledgeable enough about native advertising to adequately answer the questions to the degree required. Panel selection is considered extremely important for a Delphi study and should be constructed to include those who are well informed and keenly interested in this area (Kerr, 2009; McKenna, 1994). As such, utilising a purposive sampling strategy was considered appropriate for this study.
A key consideration when using the Delphi is to ensure a heterogeneous sample is used to reflect whole spectrum of opinions (Keeney, Hasson, & McKenna, 2006). To ensure a variety of perspectives were considered for this study participants were
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selected from a variety of different roles, regions, and industries including academics, brands, agencies and publishers.
Experts from the following areas were deemed the most important to include in this research:
Academics: It was important to consider the global opinions of the leaders of research in the area of native advertising. This included a spread of researchers and professors who were currently teaching and researching native advertising.
Academics were selected if they were highly regarded in their field, heavily involved in advertising forums focused and interested in native or digital advertising, or had presented in conferences about online or native advertising. Additionally a selection of universities from around the world was considered to see whether views varied in different regions.
Agencies: A mix of full-service advertising agencies and smaller boutique digital agencies from around the world specialising in native advertising were recruited for the expert panel. All participants invited had solid experience in and were frequent active contributors to discussions on native advertising.
Publishers: Publishers were selected based on their regular interaction with and production of native advertising. Those who were frequent publishers of native advertising and who had extensive experience within the publishing industry were invited to participate.
Brands: A mix of smaller and larger brands that regularly use native advertising as part of their online digital strategy were invited to participate. It was important that the brand experts had extensive experience in their field particularly in the areas of
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digital advertising and traditional advertising methods. Brands with all budget sizes were encouraged to participate to ensure a spread of perspectives.
3.5.1 PANEL SIZE There are various opinions regarding the ideal number of participants for a Delphi study. Unlike a traditional survey that relies on sample sizes large enough to statistically represent a larger population, a Delphi study relies instead on expert opinion and consensus of opinion (Okoli & Pawlowski, 2004).
The literature varies in what number is considered an appropriate number of participants on the expert panel. While some literature suggests a sample anywhere between 10-18 is the ideal (Delbecq et al., 1975; Okoli & Pawlowski, 2004) others suggest as few as seven to 10 is appropriate to gain consensus (Linstone & Turoff, 1975). For this research, an invitation was extended to over 50 participants, with the aim to secure a minimum of 10 expert participants.
3.5.2 PARTICIPANT SELECTION PROCESS As outlined above, success is largely dependent on the quality of the expert panel. Given this importance, a rigorous selection process developed by Delbecq et al, known as the Knowledge Resources Nomination Worksheet (NRNW), was used to ensure experts met the criteria (Delbecq et al., 1975).
The selection process for this study included the following steps:
Step one - establishment of expert criteria This step involved establishing the relevant disciplines, skills, abilities, and required knowledge deemed most important for panel selection. For this research it was important that expert panel members met the following general criteria: • Had work experience of 10-plus years within the marketing and advertising industry.
• Were well versed in digital advertising and marketing and either conducted research in or around this area regularly.
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• Were regular users, creators and or producers of native advertising content for small and large-scale international and local brands.
• Were from a mix of large size internationally recognised brands, agencies, academics, and publishers.
• Were a mix of smaller boutique award winning native advertising specialist agencies.
• Were recognised as experts in their field by peers or within industry. • Were from various geographic regions – such as Europe, Asia Pacific, Americas. • Represented a mix of industry / academic / brand / agency / publisher views.
Step two - populate Using the above criteria a list of names was collated by searching advertising and marketing journals, industry publications, native advertising groups and forums within LinkedIn and other social media platforms, and researching brands that were active users of native advertising. A list of over 100 names was generated.
Step three - nominate This step involved using the snowball technique, asking experts to nominate names of other experts they deemed appropriate to participate in this study. This step was not utilised initially, but was used later after the first round of invitations were extended when it became difficult to connect with the preferred experts. This step proved useful to gain access to several high calibre participants.
Step four - rank experts Expert names were then ranked according to their ability, experience, region, and by preference. Careful consideration was given to ensure a good spread of participants across each group (academic, publisher, brand, agency). Gaining access to contact details proved challenging with many email addresses and contact phone numbers difficult to find. A lot of initial contact was made via LinkedIn groups and forums specifically created to discuss the topic of native advertising.
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Step five - invite experts The final step involved contacting experts via phone and email to formally invite them to participate in the research. The invitation included details about the purpose of the research, the importance of the research, and what their participation would involve.
The response rate to the initial invitation varied. Some experts were very excited by the prospect of the research and enthusiastically agreed it was an important area to study and either agreed or offered their apologies due to busy schedules or inability to be involved. Others did not respond, or were keen but unable to participate due to having signed non-disclosure agreements with their employers.
Of all the groups invited to participate, the agency experts expressed the most interest to participate and have their voices heard. All agreed it was an important area that needed more consideration and research.
3.5.3 FINAL PARTICIPANT PANEL
Despite the large amount of positive feedback and eagerness to be involved in the study a large majority of potential participants were unable to take part due to restrictions with non-disclosure agreements. Additionally, many were simply too busy to be involved in the study. Given the high-calibre of candidates required for this research, the initial process of securing an expert panel took longer than anticipated, and as such required some flexibility in terms of timing between waves. The final panel consisted of 14 native advertising experts from various backgrounds, roles, and regions. According to the literature a minimum of seven participants is considered an appropriate size for a Delphi panel, while others suggest a minimum of ten (Delbecq et al., 1975; Linstone & Turoff, 1975).
The mix of participants was considered crucial at this stage to ensure a variety of voices and opinions were accounted for in each wave, and to increase reliability and generalisability of data.
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To account for candidates withdrawing from the study and to ensure an adequate responses rate, invitations were extended to a higher number of potential participants than was deemed necessary. The initial was sent to 27 participants; the final panel consisted of 14 experts. As anticipated there was a degree of withdrawal at each wave of the process. The largest drop out occurred in Wave One. This will be explained in more detail in the following section.
The following table details the final expert panel:
Table 3.1. Final Expert Panel
FINAL EXPERT PANEL Title Group Region Years Experience Chief Brand, Marketing Strategy 20 + Global Agency Asia Pacific Digital Director Agency Europe 20 + Head of Digital Department Agency Europe 20 + Head of Digital Agency Agency Asia Pacific 10-20 Chief Executive Officer Agency USA 20+ Director Agency Agency Europe 20 + Content Director Agency Asia Pacific 10-20 Lecturer/ Professor Academic Asia Pacific 10-20 Lecturer/ Professor Academic Europe 10-20 Lecturer/ Professor Academic Asia Pacific 20 + Producer Digital Content Publisher Asia Pacific 10-20 Digital Integration Manager Publisher Asia Pacific 10-20 Regional Brand Manager Brand Asia Pacific 10-20 Digital Content Specialist Brand Asia Pacific 10-20
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3.6 DATA COLLECTION, TIMELINE AND INSTRUMENTS USED
The Delphi method collects data over a series of waves or iterations in order to facilitate the group process and consensus. The number of waves is determined by whether a consensus is achieved, though typically this occurs over two or three waves (Hasson et al., 2000; McKenna, 1994). Each wave varies slightly in the process in terms of questions asked and participant responsibilities.
After each wave, it is expected that the variance between responses will gradually decrease, as the group converges in thinking, resulting in a consensus (Rowe and Wright, 1999).
3.6.1 DATA COLLECTION PROCESS
The following diagram maps the basic steps for this study from the literature review through to the findings and discussion.
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Literature review (outlined in chapter 1)
Define the issues (outlined in chapter 1)
Determine best research approach
Develop questions (outlined below)
Research industry experts and recruit panel
Conduct wave 1 research
Collate and analyse data
Conduct wave 2 research
Data analysis and interpretation
Present findings and discussion
Chapter 3: Research Design 52
Wave One
The Delphi study officially commenced in September 2016 with Wave One sent to 27 experts who had agreed to participate.
In Wave One, the experts were sent a questionnaire (see Appendix A) by email and asked to provide detailed written responses to ten open-ended questions generated from the literature review.
Open-ended questions are considered the cornerstone of the Delphi study as they extract specific information about the area of research (Custer, Scarcella, & Stewart, 1999; Hsu & Sandford, 2007). Open-ended questions enable the researcher to draw richer responses that may not otherwise be able to be extracted with a simple rating scale or other method. In this study the questions were constructed to encourage the experts to elaborate and identify key areas relating to the study topic that they felt were important (Martino, 1983).
Participants were given two weeks to reflect and answer before submitting their responses via email. Wave One took longer than originally mostly due to participants requiring more time to respond due to work commitments.
Wave One saw a reduction in panel numbers from 27 to 14 participants for various reasons. Some dropped out due to their inability to answer the questions adequately, others were too time poor, and several were bound by non-disclosure agreements with their employer.
Once all the responses were received, the author’s names were removed, and answers were collated and analysed by question. The majority of responses were typically two - three sentences per question. Key statements were then extracted.
A copy of the collated responses was also sent to an independent researcher who also analysed and extracted key responses by question. Two researchers were used in the analysis process to increase reliability and credibility of the findings, and to reduce potential bias from the researcher. Inter-code reliability is an important step as it
Chapter 3: Research Design 53
helps to eliminate weak or overlapping coding and check for consistency with meanings (Burla et al., 2008).
The analysis of the two researchers was compared and contrasted. Minor discrepancies were identified and resolved at this stage. Final statements were then selected and organised by question headings to form the next round of questions for Wave Two. A total of 126 statements were extracted for use in the Wave Two questionnaire.
See appendix A for Wave One questionnaire
See appendix B for Wave One responses
See appendix C for Wave Two questionnaire
Wave Two
In this wave, participants were contacted via email and asked to review the statements extracted from Wave One. This stage was important as it encouraged and facilitated the “narrowing down” of opinions. The panel was given the anonymous transcripts of all experts and are forced to review their earlier answers and reflect further about other opinions and ideas (Brown, 1968; Sackman, 1974; Dickinson- Delporte & Kerr, 2014). Personal views were then either confirmed on review, or shifted and changed as the collective anonymous responses of others were considered.
Narrowing down occurred at this stage through the process of participants rating their “agreeance” to the statements extracted in Wave One.
There are various measures available to rank agreeance to determine consensus in a Delphi study. Rating scales of anywhere from 3-9 points are often used, as well as the method of asking participants to provide a percentage of their agreeance to the statement (Miller, 2006; Ulschak, 1983; Linstone & Turoff, 1975; Mullen 2003; Okaoli & Pawlowski, 2004).
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This study used the current Delphi decision rule outlined by Kelley, which asks participants to rate their agreeance to statements from 0-100 rule (Kelley, 2007; Kerr, 2009). Participants were asked to rate their level of agreeance to each statement with a score of 0-100. 0 representing – “strongly disagree” through to 100 representing “strongly agree”.
While there is no set rule for a Delphi study about what percentage is considered reaching consensus, the literature offers various recommendations. Green et al (1999), suggest that 80% or higher is deemed a consensus amongst most respondents, in contrast Loughlin and Moore (1979) suggest that only 51% or greater is required for consensus. Kelley (2007) meets in the middle suggesting that 70% is an appropriate percentage. This study followed Kelley’s recommendation that consensus is achieved if the groups average response is 70% or greater (Kelley, 2007; Kerr, 2009).
Participants were given two weeks for Wave Two to reflect on their answers before submitting their responses via email.
Responses took a total of five weeks to collect before collation of final results. This wave proved much slower than the first wave. A further two participants dropped out due to work commitments. This was expected given the calibre of participants are typically time poor. Despite multiple efforts to contact them and provide a way for the experts to respond it proved too difficult on their part.
As in step Wave One, the next step involved collating responses according to group (agency, publisher, brand, academic). The use of an independent researcher was again utilised at this stage to review the findings and ensure data accuracy, increase validity and reliability of the data collected (Shenton, 2004).
Scores were calculated for frequency, mean, mode, and extreme outliers. This is a common method for analysing scores of Delphi studies to identify areas of consensus and to identify opinions that are extreme, or might potentially skew the results. (Hasson, Keeney & McKenna, 2000; Murray & Jarman, 1987).
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Each group was then analysed against other group members, groups against other groups, by region, and as a whole. Patterns of agreement and disagreement between groups and key themes were identified. It was then determined that the appropriate level of consensus had been achieved between the expert panel and a third wave would not be required for this study. A third wave is only required if there is still a high level of disagreement and no clear consensus (Linstone & Turoff, 1975).
3.7 DATA QUALITY
This section explores the data quality for this study. These points were considered and addressed prior to and throughout this study.
• Reliability – To increase reliability of the data this study used multiple waves to collect data. This encouraged the participants to reconsider their own opinions and the opinions of others thereby increasing in the accuracy and reliability of results (Rowe & Wright, 1999).
• Construct validity – Questions were validated as participants were asked to confirm their interpretation of the topic during the process of questioning (Okoli & Pawlowski, 2004).
• Representativeness of the sample –The aim of this study was to capture insight into the broader stakeholder view and gain consensus from experts from various regions around the world. Delphi studies are primarily not used to represent a particular population, but instead are utilised to express an expert opinion in answering a difficult question or drilling down to deeper issues (Okoli & Pawlowski, 2004).
• Attrition – Participant drop out is a possibility when conducting repetitive waves of research. However, given the lower number of participants required on a Delphi expert panel, it allowed us to pinpoint and follow up with those participants who needed more time or had an issue with the process (Okoli & Pawlowski, 2004).
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• Data richness - The combination of multiple waves of data collection and participant anonymity added to the richness, quality and creativeness of the data extracted from this study (Linstone & Turoff, 1975).
• Bias - Bias is possible if the researcher does not take the steps to appropriately construct the questions and ensure careful analysis of the data (Hallowell & Gambatese, 2009). The following steps were taken to avoid bias in this study,
• An independent researcher was utilised at Wave One and Wave Two to review, analyse, and compare findings.
• A combination of qualitative and quantitative data was collected. This reduced the subjectivity and added to the objectivity of the findings (Okoli & Pawlowski, 2004).
3.8 ETHICAL CONSIDERATIONS
The following ethical issues were considered before, during and after this study:
• Participant anonymity is vitally important to ensure rich data is collected and to protect individuals.
• Responses of participants remain confidential
• Written consent was received by all participants before the commencement of this study
• To ensure no vested interests, participants were not paid to participate but instead were volunteers
• Participation did not cause harm
• An ethical clearance application was made and approved by QUT before commencement of this study. QUT Ethic’s approval # 1600000205.
• Participants were provided ethical clearance details and emergency contact phone numbers in case of any issues.
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3.9 CONCLUSION
This chapter outlined the methodology used for the research and provided justification for its selection. The participants, data collection and analysis procedures were outlined and discussed. Ethical and the data collection limitations were outlined in detail.
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Chapter 4: Results
INTRODUCTION
This chapter will present the analysis and interpretation of the data collected from the expert panel over the two waves of the Delphi study to answer the overarching question:
“What is native advertising and what are the ethical and regulatory considerations”
This was explored through the following four research questions:
1. What are the elements that define native advertising and make it unique to other forms of advertising and publisher content? 2. What are the potential risks for brands adopting a native advertising strategy? 3. How should native advertising be regulated and who ethically should be responsible for this? 4. What is the future for native advertising?
This chapter will present the results according to the four key research questions.
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4.1 RQ1: WHAT ARE THE ELEMENTS THAT DEFINE NATIVE ADVERTISING AND MAKE IT UNIQUE TO OTHER FORMS OF ADVERTISING?
In the attempt to stimulate discussion and identify the elements that are unique to native advertising and clarify how similar and different it is from other terms in use, the panel was asked to consider a commonly used definition for native advertising put forward by the Interactive Advertising Bureau (IAB):
“Paid ads that are so cohesive with the page content, assimilated into the design and consistent with the platform behaviour that the viewer simply feels that they belong”.
Specifically, the expert panel was asked in Wave One to provide feedback and suggestions for key elements that they believed were missing from the above definition for native advertising.
The experts identified problematic aspects of this definition including the idea of belonging, the hard sell and intrusiveness, as well as the need for clear identification of native advertising.
Several experts had issue with the idea that consumers would feel that the advertisement “belongs”. One expert offered: “I don’t agree necessarily that the viewer thinks the advert “belongs”. That statement could be interpreted as patronising the user. Lots of users will be very aware that the native advert is exactly that – an advert despite it being very consistent with the content/design of the page”. However, it was thought to be important that, “the user shouldn’t feel the content is intrusive”. In fact, one respondent suggested that native advertising had “an element of storytelling without the hard sell”.
Others felt it was important to add that advertisements should be “clearly signposted” and this was something missing from the offered definition.
In total 13 qualitative statements with suggestions of identifying elements for native advertising were presented to the expert panel in Wave Two. Of these statements, only one statement reached consensus as outlined in Table 4.1 below.
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“Ads should be tagged so that the viewers are aware that content is paid for but still in line with the aesthetic of the site” (80.9% consensus).
This statement was supported across each group (publishers 100% agreeance, agency 80% agreeance, academics 76.6% agreeance and brands 70% agreeance). By agreeing to this statement, the expert panel in effect agreed to and identified three unique elements of native advertising.
These are: 1. Native advertising is paid content; 2. Native advertisements is clearly labelled as an advertisement; 3. Native advertisements should fit the aesthetic of the site.
Table 4.1 Defining elements of native advertising
Question 1. What aspects of the above definition do you AGREE with? What Overall % Average By Group % aspects do you NOT agree with? What key elements would you ADD? STATEMENTS THAT ACHIEVED Consensus Publishers Agencies Brands Academics CONSENSUS Ads should be tagged so that viewers are aware the content is paid for but still in 80.9 100 80 70 77 line with the aesthetic of the site
Another statement that achieved consensus in another question further supports this statement and provides insight into the connection between native advertising and sponsored content.
“Native advertising should be sponsored content that is sitting on a site, that looks and feels like the sites primary offering - whether that’s news, vids, music, photos etc.- but is clearly tagged up to let readers/consumers know that the content is supported commercially”.
This statement further strengthens the notion that native advertising should be “tagged” or labelled, is paid, and blends with the aesthetics of the site.
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Examples of native advertising
To further clarify what native advertising is, the expert panel was asked to identify types of advertisements they consider to be native advertisements and types that they think are incorrectly referred to as native advertisements.
Wave One generated 22 possible examples of what native advertising is, and 12 examples of what they believe native advertising is not. A summary of these are detailed in Table 4.2 table below with the rate of consensus for each. Further details can be found in Appendix 1.
Table 4.2 Examples of native advertising
Question 3: What are some examples of native advertising? For example is an article on a news site native advertising? What Overall % Average % By Group about paid search ads, video, tweets and other ads that appear on social network sites? No STATEMENTS Consensus Consensus Publishers Agencies Brands Academics Sponsored content 74.5 55 85 65 80 Sponsored content that is sitting on a site, that looks and feels like the sites primary offering - Whether that’s news, vids, music, photos etc.- clearly tagged up to let readers/consumers know that the content is supported commercially. 73.3 100 60 80 70 Branded content 70.9 55 75 65 80 Product placement 68.1 45 92.5 30 76.6 Online advertorials 61 25 72.75 60 70 Ad’s that are literally placed in stream 53 25 57.25 50 70 Advertorials 51.9 10 70.25 65 46.6 Promoted tweets 48 30 60 30 56.6 Videos 44.7 65 25.5 55 50 Music 44 50 31.25 55 50 Sponsored posts 44 30 57.5 30 46.6 In feed ads 37.2 30 52.5 30 26.6
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Analysis of the two questions indicate that native advertising does not appear to be restricted to any specific advertising type, but instead is identifiable by whether it includes the elements unique to native advertising as outlined in the previous section: is labelled, is paid/supported commercially, and blends with the aesthetics of the site.
This finding was determined by examining the responses that reached consensus versus those that did not. Those types of messages that did not achieve consensus such as “music,” “photo”, “tweet “ “news” “in feed ads” etc. did not include a description beyond the advertisement type.
The statements that achieved consensus did not focus on a type of advertisement, but instead on the type of content or the nature of the advertisement.
• “Branded content” (70.9% consensus) • “Sponsored content” (74.5% consensus)
A comment offered in Wave One that did not achieve consensus in Wave Two provides further insight into why many of the examples may not have achieved consensus. It suggests that native advertising has more to do with content and not the location or placement of the ad.
“For example, if there was an article on a news site and that article was about the number of home burglaries in the area and how those had increased and then some safety solutions (i.e. the brand motivated content), then yes, it is native. It looks like a piece of news, contains burglary statistics etc.”
This point reiterates the important element of aesthetics and blending contextually with the site where the advertisement resides.
An analysis of the differences in opinion between expert groups revealed that the only examples of native advertising that the publishers supported were two publisher-centric statements. An example, “Anything written or controlled by an editorial team which would be written or published without advertising alignment”.
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This statement achieved 100% agreement by the publisher group but only 48% agency agreement, and 35% brand agreement).
The publisher group was also strongly opposed to the suggestion that an advertorial is an example of native advertising rating only 10% agreeance to this statement. In contrast, agencies (70%) and brands (65%) tended to agree with this suggestion.
Confusion with other terms
In an attempt to distinguish native advertising from other terms such as sponsored content, branded content, and advertorials, the experts were asked to define these terms and rate their agreeance to these definitions. They were also asked to provide suggestions for how native advertising is different to these terms.
Qualitative responses from Wave One revealed a diverse mix of opinions. Some suggested that native advertising; sponsored content and branded content is, “the same thing”. Whereas, others felt that “Content marketing is a catch all term”. One expert suggested, “I like to view it on a scale, starting with advertorial, sponsored content, branded content, native advertising, where the whole point of native is to make it as relevant as possible for both the audience and the brand”.
In Wave Two the experts reached consensus on how to define sponsored content, advertorials, and branded content, but were unable to reach consensus on how native advertising is different to these terms (as outlined in Table 4.3).
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Table 4.3 Consensus achieved for definitions of other terms
Question 2: Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and Overall % Average By Group % advertorials. How is native advertising similar and different to these terms? STATEMENTS Consensus Publishers Agencies Brands Academics Sponsored content Content on a publishers website, not the 78 90 65 85 83.3 brand website Advertorials Looks more like an advert, in that it tries to persuade. It is more obvious and it has an 73 80 78.7 70 63.3 advertising message Branded Content Is more subtle and relies on the strength of the host content/brand along with an 75 60 89.7 85 60 assumption that the association will lead to a positive view of the paying client
Appendix D provides an overview of the statements that did not achieve consensus
Sponsored content achieved consensus when suggested that it was “content on a publishers website, but not a brand website” (78% consensus). Advertorials were considered to “look more like an advert [than the other terms], in that it tries to persuade. It is more obvious and is has an advertising message” (73% consensus). And Branded content was considered to be a “subtle form of advertising that relies on the strength of the host content/brand along with an assumption that the association will lead to a positive view of the paying client” (75% consensus).
Overall there were quite a few statements that did not reach consensus that offered suggestions on how to define each of the terms and how native advertising was different. The lack of agreed statements demonstrates the confusion and differences of opinions around the existing terms and what they are specifically.
Further there was also confusion about whether native advertising was the same as sponsored content, an example of sponsored content, or whether sponsored content was an example of native advertising. The expert panel provided contradictory responses. The below figures (4.1. 4.2. and 4.3) demonstrate the differences in opinion.
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Native Advertising = Sponsored Content
Figure 4.1. Native advertising and sponsored content share the same definition
Native Advertising
Advertorial Sponsored Content Branded Content
Figure 4.2. Native advertising is an umbrella term
Sponsored Content
Advertorial Native Advertising Branded Content
Figure 4.3. Native advertising is an example of sponsored content
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Summary of Key findings RQ1:
• The most widely agreed definition by the IAB did not achieve consensus because of the concept of ads “belonging” and the notion that consumers would “feel” an ad belongs to a website. It was also missing the important element of “tagging”. • The expert groups identified three key elements that are unique to native advertising: 1. It is paid advertising, 2. Is clearly labelled as an advertisement, and 3, should fit the aesthetic of the site/platform in which it resides. • Experts struggled to clearly distinguish other terms and as well as how native advertising was different from these terms. They were confused about whether they were the same thing, or if native advertising was an umbrella term, or whether native advertising was an example of sponsored content. • Various ad types were explored to determine what types of advertisements are considered to be examples of native ads. Interestingly, native advertising is not limited to one type, but instead is only considered a native advert when it encompasses the elements listed above. Native advertising is focused on content and blending contextually and should not be an obvious advertisement, but should be “tagged” or labelled.
4.2 RQ2: WHAT ARE THE ANTICIPATED RISKS FOR BRANDS ADOPTING A NATIVE ADVERTISING STRATEGY?
In Wave One the experts were asked to outline the risks associated with using native advertising. The experts identified 12 potential risks in Wave One. The key areas of concern were misleading consumers, disrupting the value of the publishing environment, and annoying consumers.
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Analysis of the results from Wave Two highlighted a strong concern across all expert groups that native advertising’s greatest risks include misleading consumers (87% consensus) followed closely by the potential “backlash if you [the brand] appears to be too covert” (79%). Additionally, concern was expressed that “readers may feel deceived by the brand” (75%) and “turn the audience off” (74%). See Table 4.4.
Table 4.4 Risks associated with native advertising
Question 8: What do you think are the risks associated with using Overall % Average By Group % native advertising? STATEMENTS THAT ACHIEVED Publishers Agencies Brands Academics CONSENSUS Misleading consumers 87 65 92.5 85 100 Backlash if you appear too covert 77.5 60 82.5 80 90 Reader feels deceived by the brand 75 50 87.5 75 75 Risk turning off their audiences 74.5 75 86.25 50 75 Biggest risk is that the content 70.5 75 81.25 50 60 sucks STATEMENTS THAT DID NOT
ACHIEVE CONSENSUS Consumers being mis-sold 68.5 50 76.25 55 85 Because there is no current "standard" when it comes to native advertising, consumers will be offered a variety of different 65 75 65 45 75 versions and thus become more sceptical as to what they are being served The consumer could be mistaken into thinking the product/service is 64 55 77.5 60 50 endorsed by the publisher Annoying consumers with less 62 50 92.5 65 10 relevance than needed SEO because Google can consider it a paid link resulting in manual 61.11 50 87.5 75 75 penalty Disrupting the value of the 54.5 50 51.25 70 50 publishing environment Risks for brands/advertisers is the ability to track, generate right 49.5 45 61.25 50 30 reach, delivery on KPI's and ROI's
One expert offered, “If people figure out they've been duped, they are upset. Not only at the advertisers, and the media, but all advertising and media in general”
The risk of creating content that “sucks” (70.55% consensus) rated quite high as a key concern for agencies (81%) and the publishers (75%) who are responsible for developing and creating the content for the brand. Interestingly, brands didn’t feel
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this was an issue (50%). Is that because they are in control of the brand message? Academics (60%) also didn’t appear concerned by it. One expert explained that “creating content that sucks”...“can easily happen with native advertising if it is not given enough attention” by those responsible for creating the content.
While many of the risks highlighted in Wave One did not achieve consensus, such as annoying consumers, consumers being mis-sold, and consumers mistaking the product/service as endorsed by the publisher, they did achieve high scores (between 62-69% agreeance) which demonstrates that they are an important consideration across the expert groups. These are detailed in the Table 4.4.
The area deemed the lowest risk was the ability for advertisers and brands to track or generate the right reach or delivery on KPI’s (49%).
An analysis of the expert groups revealed that each group has different concerns. Interestingly the risk of disrupting the value of the publishing environment (55% agreeance) was more of a concern to the brands (70% consensus) than it was to the publishers (50% agreeance). Brands are also not concerned about turning off audiences (50% agreeance) but are concerned with misleading audiences (85% agreeance).
Conversely, publishers are moderately worried about misleading consumers (65% agreeance), and less about deceiving readers (50% agreeance), and disrupting the value of the publishing environment (51.25% agreeance), but they are worried about the risk of turning off audiences (75% consensus) and that consumers will become sceptical of other content that isn’t native advertising because there is no native advertising standard (75% consensus).
Interestingly, all of the expert groups except for the publishers, identified that there was a high risk with “SEO, because Google can consider a paid link resulting in manual penalty” (academics 75%, brands 75%, agencies 87.5% agreeance). Because the publishers only viewed this as a moderate risk (50% agreeance) this statement did not reach consensus at only 61.1% agreeance across all groups.
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Another statement that also did not reach consensus was the idea of consumers being mis-sold. Agencies (76.25% agreeance) and academics (85% agreeance) considered this to be a risk when using native advertising, whereas publishers and brands were not concerned.
Summary of Key findings RQ2:
• The greatest risks when using native advertising include: Misleading consumers, turning off audiences, producing poor content and deceiving readers • While may risks did not achieve consensus they did achieve fairly high scores which indicates that there are quite a few considerations when using native advertising • Publishers, brands and agencies are concerned about different areas of risk. Publishers worry about turning off consumers and consumers becoming sceptical, whereas brands and agencies are most worried about misleading audiences and readers feeling deceived by the brand. • Interestingly brands were more worried about the risk of disrupting the publishing environment than publishers.
4.3 RQ3: HOW SHOULD NATIVE ADVERTISING BE REGULATED AND WHO SHOULD ETHICALLY BE RESPONSIBLE FOR THIS?
Regulation and responsibility
The experts were asked to nominate who they consider should be responsible for the regulation of native advertising to ensure that it doesn’t offend or is misleading. Specifically, the experts were asked to nominate whether they believe the brand, publisher, or agency is responsible for regulation. They were also asked if a separate regulatory organisation should be responsible for regulating native advertising. Results are outlined in Table 4.5.
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Table 4.5 Responsibility for regulation of native advertising
STATEMENTS Overall % Average By Group %
Question 6: Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? Consensus Publishers Agencies Brands Academics The brand? The self-regulatory organisation that regulates traditional advertising Publishers, producers, agencies and clients should all self regulate if they 89 100 85 75 100 produce or distribute it.
Publisher 81 100 62.5 80 100
Question 7: How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non- advertising content? Important that the reader does not feel 87 100 80 80 95 deceived or mislead
Extremely important, transparency is key 80.5 100 73.5 80 75
One expert commented, “Self Reg. Organisations, and Professional bodies (e.g. TCC, MFA and IAB) and Govt. should educate the advertising industry and media industry about regulatory information. In addition, the media also have responsibility to review information from professional bodies and self-regulatory organisations and Govt.”
In fact most respondents felt a sense of responsibility, one media expert offered, “All media professionals have an overriding responsibility to ensure commercial messages are legal, decent, honest and truthful regardless of the medium or tactic used.”
Overall, consensus was reached in Wave Two in favour of shared responsibility in the self-regulation process. The statement, “publishers, producers, agencies and
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clients should all self regulate if they produce or distribute it” achieved consensus of 89% across all groups.
Interestingly, the experts also agreed that although all groups are responsible, the final responsibility of regulating native advertising content should lie with the publishers (81% consensus). “The publisher is ultimately the owner of all of the content they create, so they should be self-regulating it”.
This statement was strongly supported by publishers, (100% agreeance), brands (80% agreeance) and academics (100% agreeance) but was not as strongly supported by agencies (62.5% agreeance) who were more in favour of equal responsibility across all three groups (85% agreeance).
Transparency is important
To further explore the regulatory and ethical considerations related to native advertising, the stakeholders were questioned about their views on the importance of identifying native advertising as paid content. The statements that achieved consensus on transparency are detailed in Table 4.6.
Wave One exposed various opinions. One expert provided insight into the view for not distinguishing native advertising content from non-paid content. Suggesting, “I'm in favour of allowing people to advertise products to their audience without indicating that they are being paid to do so. The Internet has done away with any argument that we should maybe control things in this way. Just like it has done with copyright in a lot of cases and individual privacy etc. If somebody has been smart enough to gather an audience that somebody else is willing to pay to be in front of, good luck to them”.
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Table 4.6 Importance in identifying native advertising as a paid advertisement
Question 7: How important is it for publishers/brands/agencies to differentiate for consumers that native Overall % Average By Group % advertising is paid advertising from non- advertising content? STATEMENTS Consensus Publishers Agencies Brands Academics Important that the reader does not feel 87 100 80 80 95 deceived or mislead
Extremely important, transparency is key 80.5 100 73.5 80 75
This study revealed that the majority of experts were in favour of labeling as a means of differentiating Native Advertising. Consensus was achieved across all expert groups agreeing that it is “important that the reader does not feel deceived or mislead” (87% consensus). And again, it is “extremely important, transparency is key” (80.5% consensus).
One expert offered, “I feel it is important. We need to treat consumers with respect. We need to identify the source of the information, otherwise we are misleading”.
Another echoed this view; “It is absolutely essential that we have a situation where consumers always know an ad is an ad. Then it is no longer a native ad, and instead is merely a well placed ad”.
And another, “Ethically, consumers should be able to differentiate paid vs. non-ad content”
These views support previous findings that the experts believe native advertisements should be labeled and clearly distinguished as paid content. It is also strongly linked to the risks about misleading and the potential to turn off consumers identified in the previous section.
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Process for creating and approval of native advertising To better understand regulation considerations for native advertising, the experts were asked to discuss their views on who should be responsible for the creation, writing and approval processes for native advertising content. The statements that received consensus are outlined in the Table 4.7.
Table 4.7. Responsibility for creating and approval of native advertising content
Question 5: Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is Overall % Average By Group % there an approval process to make sure the content meets the requirements of native advertising? STATEMENTS Consensus Publishers Agencies Brand Academics Agencies should ensure that the campaign matches their own ethics and 87.5 90 96.2 55 100 represents good value to their client Publishers have an overriding legal obligation for the ads they cover and to 80.9 79 74.5 85 100 ensure the content is relevant to their audience Approval process is the responsibility of all three – the brand, agency and 78 90 77.5 45 100 publisher There should be a collaboration between 72 65 90 65 50 all parties involved The publisher of the content, with 71 85 62.5 95 50 guidance from the agency and brand The publisher should have the ultimate control of the production of the content 54 90 42.5 70 25 from ideation to publishing
This study has identified that the creation of native advertising content is a highly cooperative process between brands, agencies and publishers. The statement “There should be a collaboration between all parties involved” achieved 72% consensus. This was achieved primarily because of the agency group’s strong agreeance to this statement (90%) versus brands (65%) publishers (65%) and academics (50%) moderate agreeance to the statement.
While this statement does not offer insight into how the work is divided between the groups, it does highlight that all parties consider that various parties are required for the production of the content in some form.
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The exact process of how native advertising content is created was not identified in this study; however, the experts indicated that internal processes exist to facilitate the process. One expert detailed that in his experience, the “Brand provides very clearly brand architecture, guidelines, and objectives. Agencies are to create, write publish to input on how to best fit the content to their platform, and launch”
While the responsibilities each group share some similarities there are slight differences between each. Table 4.8 displays a break down of responsibility by group. Responsibilities were extracted from the statements that received consensus in Table 4.7.
Table 4.8. Responsibilities by group to create native advertising
Group Responsibilities
Publisher • Primarily responsible (in essence leading) other groups in creating and writing content with guidance from agency and brand • Final approval of creative, design and written elements • Collaborate with agency and brand to create and write content • Publish content on their site • Carry the overriding legal obligation for the advertisements they cover • Ensure the content is relevant to their audience • Regulate content to ensure it is not misleading Brand • Collaborate with agency and publisher to create and write content • Approval of creative, design and written elements • Brand architecture, guidelines, objectives • Regulate content to ensure it is not misleading Agency • Approval of creative, design and written elements • Regulate content to ensure it is not misleading • Ensure the campaign matches the agencies own ethics and represents good value for the client • Collaborate with publisher and brand to create and write content
Importantly while this study has identified that the process of creation and approval is the responsibility of all three, overall the experts agree that the publisher carries the bulk of the responsibility both in driving the creation process and the overall
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legal obligation. “Publishers have an overriding legal obligation for the ads they cover and to ensure the content is relevant to their audience” (80.9% consensus).
One publisher offered his views in Wave One, “The publisher should have the ultimate control of the production of the content, from ideation to publishing. Creative elements from a brand or an agency can be discussed and incorporated when genuine and relevant to the content and the user experience. At [publisher] we only publish content produced out of the partner studio team for native content. Our clients are allowed two rounds of approvals to ensure we meet client objectives.
And another, “Ultimately the editor or owner of the publishing platform should be responsible for what is published. If an agency wanted to submit copy, this would be considered and potentially edited by the editor. Nobody would give an ad agency carte blanche to publish an "article" directly onto a respected site. Equally, nobody can stop them from adding native advertising as article/blog comments where possible and done cleverly this can elicit results”
Interestingly, while the publisher was nominated by all stakeholder groups as the party most responsible legally there was no consensus reached when the stakeholders were asked if the publisher should have ultimate control over the process from ideation to publication of the process of native advertising (54% consensus). This statement was rejected by agencies (42.5% agreeance) and academics (25%)
Summary of Key findings RQ3:
• While all groups agree that each is responsible there is a belief that publishers hold the primary power and the final responsibility for approval of the native advertising content.
• The creation of native advertising is considered to be a collaborative process between the agency, brand and publisher. It is viewed as a shared responsibility and is not owned by any one party. There is strong disagreeance to the idea that it is owned by the publisher despite literature suggesting that it was created in response to diminishing print revenue streams, but there was agreeance that the publisher should have the final responsibility.
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• Transparency was a key concern amongst the expert groups to ensure readers do not feel deceived. The importance of “tagging” or labelling native advertisements was discussed repeatedly.
4.4 RQ4: WHAT IS THE FUTURE FOR NATIVE ADVERTISING?
Native advertising is used to counter savvy customers and add value, not because of ad blockers
To determine how native advertising is likely to evolve in the future, it was first important to establish the reasons behind why native advertising is used. Experts were asked to comment on whether they believed native advertising is used to counter advertising avoidance online, and if brands are using native advertising as a strategy against ad blockers. The statements that achieved consensus are detailed in Table 4.9.
With regard to advertising avoidance, findings indicate that, yes, native advertising is often used to connect to consumers and break through advertising clutter. The following statement “A key objective of using native advertising is to use the best platform to best reach consumers and be able to differentiate in a very cluttered market, so not so much considered about ad blocking”, reached 77% consensus across the expert groups.
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Table 4.9 Native advertising and ad blockers
Question 10: Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native Overall % Average By Group % advertising over other forms of online advertising as a strategy to counter ad blocking? STATEMENTS Consensus Publishers Agencies Brands Academics Native advertising is being used mainly because they know it’s the best way to reach their consumer - by adding value, 77% 95% 82% 55% 73% and making your communication a value exchange Key objective of using native advertising is to use the best platform to best reach consumers and be able to differentiate in 77% 95% 89% 50% 66% a very cluttered market, so not so much considered about ad blocking. I don’t think it is a conscious decision to counter ad blocking, rather I think its advertisers responding to consumers being more savvy and demanding more 75% 95% 74% 85% 56% intelligent forms of advertising rather than just a plain old display ad which they can ignore. I don't think the main motive [for using native advertising] is a way to deal with 70% 75% 92% 70% 40% ad blocking
However with regard to ad blockers, findings indicate that using native advertising is not a main motive for using native advertising (70% consensus). It extends beyond this to engagement and adding value. One expert commented, “Initially I think this is why there is a considerable interest in native advertising but it’s also the engagement with relevant audiences”
And another “Yes they’re doing it to avoid ad blocking, but moreover they’re doing it because they know it’s the best way to reach their consumer – by adding value, and making your communication a value exchange”
Many of the respondents comments echoed the same sentiment that while native advertising is sometimes used to counter ad blocking, it doesn’t appear to be the primary reason for using native advertising as a strategy. Interestingly however,
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academics disagree with this statement (40% agreeance).
Overall, consensus was achieved for the following statement: “I don’t think it is a conscious decision to counter ad blocking, rather I think its advertisers responding to consumers being more savvy and demanding more intelligent forms of advertising rather than just a plain old display ad which they can ignore” (75% consensus).
Native advertising is often utilised because “it’s the best way to reach their consumer - by adding value, and making your communication a value exchange” (77% consensus). This statement achieved a strong consensus across all groups except for brands who only offered 55% agreeance to this statement.
Further, this study identified that a “key objective of using native advertising is to use the best platform to best reach consumers and be able to differentiate in a very cluttered market, so not so much considered about ad blocking” (77% consensus). Again, this statement was strongly supported by all groups except brands who only offered 50% agreeance to this statement.
The future of native advertising
Findings indicate that overall most experts believe native advertising is an important and ongoing area of growth within digital advertising.
In terms of how it is likely to evolve in the future, experts predict that as technology develops we will continue to see better, more accurate targeting and optimisation through data (75% consensus), and that the way to drop cookies on readers that go from the content to the ads will be developed (74% consensus). The statements that achieved consensus are detailed in Table 4.10.
How native advertising is used is also predicted to evolve further, with experts suggesting that how brands share stories will likely change (87.9% consensus) moving towards becoming more dynamic, particularly on social media (69.9%). Additionally, we are likely to see a new hierarchy of format types/cost structures evolve (79.4% consensus).
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Table 4.10 The future of advertising
Question 9: How do you see native advertising continuing to evolve? Overall % Average By Group % (Format, platforms, its use etc.) STATEMENTS Consensus Publishers Agencies Brands Academics As technology evolves, how we present content and stories about brands will 87% 90 89.75 70 100 alter. As native advertising becomes more and more common, there will need to be a hierarchy of format types/cost structures 79% 90% 76% 65% 100% with the key to this being in the way in which the content in amplified. Better targeted and optimized through 75% 65% 65% 80% 100% data and responses The ability to drop a cookie on readers 74% 95% 60% 80% 80% that go to the content from the ad Using owned channels more predominantly rather than content 70% 85% 76% 40% 75% referral platforms or paid for audiences.
More dynamic content on social 69% 65% 79% 40% 85%
Interestingly, there is a belief (70.5% consensus) among agencies, academics and publishers that brands will “move towards using owned channels more predominately instead of content referral platforms or paid for audiences”. Brands however, disagree with this statement (40% agreeance). If this statement is true, this raises questions about what this means for the future of native advertising. Does this eliminate the need and use of native advertising in the future? Or would native advertising as a concept evolve?
Summary of Key findings RQ4:
• The key objectives for using native advertising are to counter savvy consumers who are demanding more intelligent forms of advertising from brands, and not because of ad blockers as predicted in the literature.
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• Native advertising is also used because it is the best way to reach customers, and add value in the communication exchange between the reader and brand.
• Native advertising is about using the best platform to best reach consumers and differentiate the ad message in a very cluttered market.
• Native advertising is predicted to have a strong future. It is predicted that technology will alter how brand stories and content are shared and presented in the future.
• It is predicted that native advertising will become more targeted and optimized through data and responses as technology evolves.
4.5 SUMMARY OF KEY FINDINGS AND CONCLUSION
This chapter has presented the results from leading experts around the world to further understand what native advertising is and identify the ethical and regulatory considerations from the broader stakeholder perspective. In summary this study found:
Understanding native advertising • The experts did not agree with the most widely agreed definition for native advertising presented by the IAB. Highlighting their disapproval of the word “belonging” and idea that consumers “feel” something towards a native advertisement. • There is high degree of confusion amongst the experts as to how to distinguish native advertising from other terms such as sponsored content, advertorials and branded content. However they did identify and agree to three elements that are unique to native advertising. These include: It is paid advertising, It identifies as an advertisement, and the advertisement is consistent with the aesthetic of platform where it resides. • Various ad types were explored to determine what types of advertisements are considered to be examples of native ads. Interestingly, native advertising is not limited to one type, but instead is only considered a native advert when
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it encompasses all three elements listed above. Native advertising is focused on content and blending contextually and should not be an obvious advertisement.
Risks and ethical considerations
• The experts identified several potential risks that should be considered when using native advertising. These include the potential to: mislead consumers, turning off audiences, producing poor content and deceiving readers. • This study identified that there are different risk considerations between the different groups. In particular brands and agencies tend to be concerned more about consumer-centric risks such as misleading audiences and deceiving readers, where as publishers tended to be worried about the turning off their audience and the possibility of producing “bad” content.
Regulation
• There was strong support across all groups for native advertising to be self- regulated. There is a belief that publishers, producers, agencies and clients are all responsible if they produce or distribute native advertising.
• While all groups agree that each is responsible self-regulating there is a belief that publishers hold primary and the final responsibility for approval and self- regulation of native advertising content.
• The creation of native advertising is considered to be a collaborative process between the agency, brand and publisher. It is viewed as a shared responsibility and is not owned by any one party. There is strong disagreeance to the idea that it is owned by the publisher despite literature suggesting that it was created in response to diminishing print revenue streams.
• Transparency was a key concern amongst the expert groups to ensure readers do not feel deceived. The importance of “tagging” or labelling native advertisements was discussed repeatedly.
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Reasons for using native advertising
• The key objectives for using native advertising are to counter savvy consumers who are demanding more intelligent forms of advertising from brands, and not because of ad blockers as predicted in the literature.
• Native advertising is also used because it is the best way to reach customers, and add value in the communication exchange between the reader and brand.
• Native advertising is about using the best platform to best reach consumers and differentiate the ad message in a very cluttered market.
Future for native advertising
• The experts predict that native advertising has a strong future and will continue to evolve in format type and offering. It is likely to become more dynamic. It is also predicted that technology will alter how brand stories and content can be shared and presented in the future.
• It is predicted that native advertising will become more targeted and optimized through data and responses
The next chapter will present a discussion on the key findings and discuss the implications of these findings for practitioners and theory and offer suggestions for future research.
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Chapter 5: Discussion
5.1 INTRODUCTION
Native advertising has quickly become an important part of the digital suite of advertising tools within the online market place. Globally it is estimated that approximately $59.35 billion dollars will be invested towards this approach in 2018 in the hope that it will offer a higher level of engagement with their target market (PWC report cited in Niekerk, 2017).
Yet limited research has investigated native advertising from the perspective of the different stakeholder groups. The purpose of this study was to unpack and explore it further, looking first to understand what it is and how it is both similar and different to other terms currently in use. And secondly to investigate the stakeholder’s view of the ethical and regulatory responsibilities during the process of creating and publishing native advertising content using theories relating to power and responsibility, consumer empowerment. And finally, their views on the risks such as credibility, trust and deception associated with native advertising.
Chapter One presented an introduction to the concept of native advertising, the purpose behind the research, and provided a general direction for this study.
Chapter Two explored current and relevant literature relating to advertising within the online environment, identified gaps in the literature and outlined proposed research questions. It also investigated native advertising’s emergence and importance, and how it may have impacted consumer empowerment. Theories related theories relating to consumer empowerment and the power-responsibility equilibrium theory were introduced to explore native advertising and similar approaches such as advertorials.
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Chapter Three provided an outline of the methodological approach and justification for the Delphi technique.
Chapter Four presented the results according to the four research questions.
This final chapter seeks to interpret, evaluate and discuss the results in connection to the reviewed literature, and the theoretical model of the Power-Responsibility Equilibrium and risk. Implications for theory, regulators and practitioners will also be presented.
5.2 KEY THEMES FROM THE STUDY
The overarching research question that has guided this study is:
“What is native advertising and what are the ethical and regulatory considerations”
In the previous results chapter the four key research questions were used to organise results. These four questions were:
1. What are the elements that define native advertising and make it unique to other forms of advertising or publisher content? 2. What are the potential risks when adopting a native advertising strategy? 3. How should native advertising be regulated and who ethically should be responsible for this? 4. What is the future for native advertising?
The subsequent analysis of the research results led to the emergence of several key themes. These themes include:
1. Different stakeholders, different priorities, 2. Power, 3. Responsibility, 4. Risk.
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5.3. DISCUSSION
5.3.1. DIFFERENT STAKEHOLDERS, DIFFERENT PRIORITIES
Although consensus was not achieved for a definition for native advertising, this study identified three key elements that the stakeholders consider to be unique to native advertising. These include:
1. Native advertising should be clearly labelled as an advertisement 2. Native advertising is paid content 3. Native advertising should fit the aesthetic of the site.
While some of these elements are arguably not unique to native advertising, importantly knowing these elements helps narrow and identifies a starting point for further research into a definition. These elements also help to distinguish native advertising from other similar approaches.
In investigating how native advertising might be defined, it became clear that reaching consensus on other statements was not going to be achieved. This study identified that each of the different stakeholders- advertisers, brands, publishers, and academics, view native advertising differently. Each has different priorities and desired outcomes for the implementation of native advertising and as such see native advertising from different perspectives. The differences in priorities might explain why so many different definitions exist with industry and literature and why there has been confusion and difficulty in reaching consensus for a specific definition for native advertising.
Vroom’s (1964) Expectancy Theory suggests “individuals, acting through self- interest adopt courses of action perceived as maximising the probability of desirable outcomes for themselves” (Isaac, Zerbe, & Pitt, 2001). Applied to this research, we can identify that it is likely that some stakeholder groups may have a vested interest in ensuring native advertising is defined, or perceived in a particular way to satisfy their needs, whereas others may not be as motivated or need to define it because it
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does not impact their desired outcomes. This study identified that publishers priorities were focused on generating revenue, brands priorities were focused on finding ways to connect with consumers, agencies priorities focused on creating strategic value, and academics were focused on critiquing and informing industry practitioners, and policy makers.
Publishers – Priority to generate revenue
This research suggests that publisher’s priorities for using native advertising are primarily finance driven. They view native advertising as way to generate revenue from brands. Native advertising is a service they can offer, as they own the platform and have access to the audience. Publishers also view native advertising as way to produce new content for their readers in the hope of establishing and increasing readership, which is extremely important to them (Probst et al., 2013).
When publishers were asked how they viewed advertorials, product placement, and sponsored posts in relation to native advertising, publishers strongly advocated that native advertising was different to other modes of advertising. Suggesting that advertorials “Look more like an advert, in that it tries to persuade. It is more obvious and it has an advertising message” another commenting that they view “sponsored content, branded content and advertorials are far more flexible and accommodating in terms of brand mentions with the copy of the content – native advertising should not do this unless there is a relevant and genuine link from the content to the brand URL”
It is in a publisher’s best interest to present native advertising as a new concept, rather than agree that it is an advertorial that has been around for years. Further, because advertorials have been typically positioned in print or even on television, perhaps online publishers are not as familiar with advertorials as other stakeholders. By positioning native advertising as a new advertising product, publishers are more likely to generate interest and offer new hope for brands and agencies in their attempt to connect with consumers.
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Brands – Priority to Connect
Brands priorities are focused largely on finding ways to increase consumer engagement, generate brand awareness and drive sales (Harms et al., 2017). This study identified that brands primarily use native advertising to connect with savvy consumers and counter ad blockers. They understand that their consumers are searching for different, more intelligent forms of advertising rather than the types of advertising they have become accustomed to, and as such brands know they have to utilise different methods to connect with them (Fisher, n.d.; Eliasson, 2017).
The Uses and Gratifications Theory (UGT) offers a framework to understand why people seek out specific media to satisfy needs, applied to this study, consumers visit specific sites to seek gratification in the form of content that is either entertaining or informative (Harms et al., 2017; Severin & Tankard, 2001; Tutaj & van Reijmersdal, 2012). Brands are aware of this and have a strong understanding of what their consumers are interested in, where they interact, and the type of content they consume. They also know that consumers visit specific sites because of the type of content offered and the value they can receive from that site. Brands understand that they by adding their content into the mix through native advertising they can become part of and control some of the conversation with consumers.
As such, brands view native advertising as a vehicle to connect with their consumers in a more intelligent way on platforms they are visiting.
Agencies – Priority of Strategic Value
Agency’s priorities are focused on representing their clients (the brand’s) interests through developing and implementing successful campaigns to meet their clients sales and marketing objectives (Bergen, Dutta, & Walker Jr, 1992; Hackley & Hackley, 2017).
This study found that agency motivations for using native advertising are to cut through advertising clutter, to counter ad blockers, to connect with savvy customers, and more importantly, as a way to add value. Agencies tend to view native
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advertising as more than just an advertising vehicle; they view it strategically as part of a bigger picture to deliver value in the communication exchange with consumers.
According to marketing literature, value is considered to be an attribute or characteristic of a product or service that either exceeds a customers expectations or enhances the consumers experience or improves their lifestyle (Walters & Lancaster, 1999). Providing value has also been found be a critical element when businesses attempt to establish and maintain relationships with customers (Ravald & Grönroos, 1996). In the context of native advertising, value is provided to the consumer through the delivery of quality content that extends beyond a basic advertising need and offers the consumer additional information or entertainment that the consumer is looking for.
In terms of how they define native advertising, agencies don’t view it as a new idea, but instead as an evolution or combination of several advertising approaches – product placement, advertorials (online and print), branded and sponsored content. How native advertising is defined doesn’t appear to serve any interests for the agency and therefore they aren’t as concerned with ensuring that it is clearly separated from other approaches, unlike publishers. However they do acknowledge that native advertising is not exactly the same as the other approaches and has some differences.
Academics - Priority to Critique and Inform
Academics priorities differ from the other stakeholder groups in relation to native advertising as they are removed from the need for financial outcomes. Their priority is to understand native advertising, critique, analyse and inform industry and policy makers.
How academics view native advertising is consistent with the agencies view. They don’t see native advertising as a new idea, but rather as an evolution and combination of existing ideas. They have a strong understanding of the different types of advertising approaches and how each operates. They also have no need to define native advertising as a distinctly new approach as publishers do.
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Summary
This research provides valuable insight for regulators and industry operators as it has identified that each stakeholder has different priorities and desired outcomes for utilising native advertising which impacts their perception of native advertising. Specifically, this research provides reason as to why there has been confusion and difficulty in discussing and defining native advertising. Native advertising is important to the stakeholders for different reasons and as such is utilised for different reasons. Importantly, the findings highlight the importance for stakeholders working together to clearly articulate how they view native advertising and their expectations for using it when working together.
In summary, the priorities and perceptions of native advertising for each stakeholder group are: • Publishers view native advertising as a way to generate revenue from advertisers on their platform. Native advertising is a product they offer. It is important that native advertising is positioned as a new product offering and not an old approach that has been around for years. Native advertising offers publishers new hope to claw back revenue in a struggling industry. • Brands view native advertising as a way to cut through clutter and connect with their consumers in a space that is highly fragmented. Their priority is to create favourable attitudes towards the brand and generate sales. • Agencies priorities are fixated on meeting the brands objectives and are answerable to the brand. Agencies view native as way to add value in the communication exchange with the customer. It is often utilised as part of an overall campaign strategy to connect with consumers. • Academics have very different priorities from the other stakeholders, as they are not connected to consumers. Their priority is to understand and critique native advertising and to inform regulators and industry operators.
Table 5.1 below summarises the priorities of the stakeholders identified in this research and how it impacts their perception of native advertising.
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Table 5.1. Stakeholder priorities and their perceptions of native advertising
Stakeholder Priorities Perceptions of native advertising
Publishers • To attract advertisers for their • An opportunity to generate platform and generate revenue advertising revenue and from them therefore positioned as a new • Attract and maintain readers / advertising approach online subscribers Brands • To find an approach that offers • A new advertising approach them the ability to connect with online which offers them hope customers to connect with customers in a • To find a way around ad difficult market blockers • Cut through ad clutter • Increase customer engagement • Generate sales Agencies • To generate strategic value • A combination of various types • Generate money for the agency of advertising and an evolution • Establish a reputation for their of the advertorial. How it is creative strategies and defined doesn’t add any value campaigns to them. • Keep brands happy • Meet brands objectives Academics • Critique and inform industry and • A combination of various types policy makers. of advertising and an evolution • Research of an advertorial • Consistent with the agencies’ view
5.2.1 POWER
Throughout this research, the concept of power has been discussed in relation to stakeholder responsibility. Simply put, the application of the Power-Responsibility Equilibrium (PRE) suggests that those with more power have more responsibility (Davis, Fredrick and Blomstrom, 1980). Power is defined as “the potential ability to influence behaviour, to change the course of events, to overcome resistance, and to convince people to do things they would not do otherwise” (Pfeffer, 1992, p. 29).
The ethical responsibility of native advertising is considered to be a shared responsibility between agencies, brands, and publishers. All are considered to be
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power holders to varying degrees, through the information they provide, by offering their approval on ideas and content, to publishing the content.
While the exact degree of power and responsibility varies according to each task, most of the stakeholders agree that it is fairly equally distributed.
From the perspective of the publishers, however, there is a different view. This research suggests there is an obvious wrestle of power from their side to control the process from ideation, creating and publishing, through to how it should be defined and regulated. Publishers consistently exerted strong opinions, positioning themselves as the leader in the process.
There are several reasons why the publishers feel a sense of control over native advertising. These include:
1. Native advertising is a product offering on their platform directed to their audience. 2. Native advertising offers publishers the opportunity to generate revenue from advertisers using their platform. 3. Publishers can choose to accept or reject content from advertisers. They have control over the delivery and execution of content. 4. A publisher is held responsible for content published on their platform. In 2015 the FTC in America announced that it would start to hold the publishers accountable for native advertising content that is considered misleading or deceptive on their platforms. The involvement of the publisher in the creation of the content now means that content is considered to be the responsibility of the publishers and the advertiser (Sluis, 2015).
5.2.2 RESPONSIBILITY
This research has investigated the concept of responsibility in connection to power has been investigated. Broadly responsibility is defined as the “moral obligation to
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act” (Murphy, 2009). In business the concept of responsibility extends beyond just meeting basic legal requirements to include ethical considerations of consumers. Further, it assumes that stakeholders should be held accountable for the foreseeable consequences of their decisions (Caudill & Murphy, 2000; Murphy, 2009). Being ethically focused extends beyond self-regulation and is often incorporated into organisational values and corporate social responsibility (Murphy, 2009).
This study identified that all stakeholder groups feel a strong sense of responsibility both legally and ethically when using native advertising, and demonstrated a strong understanding for why this was important. While specific internal procedures or policies relating to ethics were not the focus of this research, the stakeholder groups repeatedly discussed their focus and commitment towards being transparency with consumers.
The Importance of Transparency
Being transparent with consumers and identifying native advertising as an advertisement was identified as one of the key areas of importance for the stakeholder groups in this study. The experts repeatedly stressed the necessity for native advertisements to clearly feature a label such as “advertisement”, “paid” or “sponsored” so that readers are aware that the content they are consuming is paid advertising.
Transparency was considered important two key reasons; firstly, because the stakeholders believed that ethically consumers should be able to identify the commercial intent of the information as advertising, and secondly, because they believed that labelling reduces the potential risk of misleading or deceiving consumers.
As identified in this study, because native advertising extends across various platforms and format types, there is issue around standardising labelling and disclosure. Currently publishers can choose to use a variety of labels and placements to disclose their content such as “Sponsored”, “Brand Voice”, “Presented by”, “From our advertisers”, “Supported by”, etc. The lack of consistently in labelling can create
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confusion for consumers about what the content is and what the label means (Contently, 2015; Hill, 2016; Wojdynski & Evans, 2016).
In addition to this, there is a question around whether labelling is effective or not. Recent research suggests that a label may not be enough to protect consumers from feeling misled or deceived. Ad disclosure is sometimes not enough to for readers to recognise that the content is an advertisement (Wu et al., 2016). Recent research found that only 17 out of 272, or less than 8% of participants in the study were able to recognise that native advertising was an ad even with a label (Wojdynski & Evans, 2016). However, there is some evidence to support that other factors such as using brand elements throughout the advertisement may help to increase advertisement recognition (Jiang et al., 2017).
Responsibility and regulation
Native advertising is challenging to regulate for several reasons. Firstly, it is difficult to recognise native ad content (Wojdynski & Evans, 2016), secondly, native advertising can extend across national and international markets (Katsirea, 2016; Matteo & Dal Zotto, 2015), and finally, as confirmed in this study, because there is no set format style. As such native advertising can extend into any form such as video, tweets, pictures, or as editorial content across various platforms making it extremely difficult to identify and standardise for regulation (Katsirea, 2016; Matteo & Dal Zotto, 2015).
In Australia, and similarly in various parts of the world, stakeholders using native advertising are bound by and must comply with consumer laws relating to being deceptive and misleading. Stakeholders are responsible for publishing information that is accurate and not misleading.
Additionally, stakeholders are held accountable by self-regulatory bodies within industry and by consumers groups. In Australia, self-regulation organisations (SRO) are funded through levies that are paid through media buying agencies (Adstandards.com.au, 2018). Self-regulatory bodies make decisions on whether advertising is offensive or misleading, based on a code of ethics. Advertisers are not
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bound by these regulatory guidelines and can choose to ignore them at the risk of some penalty or removal by the media on which the advertising is placed (IAB, 2016).
When the stakeholder groups were questioned about the difficulty in regulating native advertising and their views on how it should be controlled, all expressed a strong sense of stakeholder responsibility. This research found that each group (agencies, brands and publishers) are involved in the process from creation to distribution of content should be responsible for their contribution to minimise risk and to ensure high ethical standards.
However, while each believed they were individually responsible, there was a strong belief that the publishers should hold the most responsibility ethically in ensuring content is correctly labelled and identifiable to consumers. The stakeholder’s likely hold this view, as the publishers are the last stage in the content creation process, and are responsible for the communication exchange with the consumer.
The research identified a strong preference for self-monitoring and less favour towards outside parties adding further restrictions around native advertising is likely due to the perception that tighter regulation will stifle creativity and flexibility. Even though there is support for the idea of labelling native advertisement, it was felt that tighter regulation would make the content more obvious as an advertisement and destroy the inherent nature of native advertising which is to blend seamlessly into the surrounding content (Sahni & Nair, 2016).
5.2.3 RISK
This study has identified various risks associated with adopting a native advertising strategy. Risk is considered to be the potential to lose or gain something of value such as financial wealth. It is also considered to be the intentional interaction with uncertainty (Cline, 2004; Kahneman & Tversky, 2013). The types and degree of risk (high and low) were found to vary amongst the stakeholders according to their priorities and desired outcomes for using native advertising.
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Risks for publishers This study found that publishers tend to be more concerned about the risks associated with losing their audiences through content that doesn’t meet consumers needs for entertainment or information, than they are concerned about the possibility of misleading or deceiving their audience. This is a startling finding given that publishers are considered by the stakeholder groups to hold the most responsibility ethically and legally for native advertising content.
Publishers may face an ethical dilemma if they have to choose between misleading the consumers or providing entertaining content.
This finding may also explain why 40% of publishers in a recent study were found to not be following transparency guidelines set by the FTC (MediaRadar Report in Forbes, 2017). Perhaps the risk of losing audiences was considered more damaging than the risk of customers feeling deceived? Or perhaps they view them as only guidelines, and not regulation? More research into this area would be valuable to understand why the guidelines are not being fully followed.
Bahski (2014) offers insight suggesting that because the existence of publishers is fragile, it is highly likely that they will be willing to take greater risks to stay afloat. As highlighted in the literature, publisher revenue is down, paid readership has become increasingly difficult to obtain as consumers move from printed magazines and newspapers to online sources, also the increased fragmentation of channels means that consumers are now able to tap into niche sources to fulfil their content needs (Anderson et al., 2017; Bakshi, 2014; Herrman, 2016; Ponkivar, 2014). In the mid 80’s in Australia publishers like The Age and The Sydney Morning Herald were earning $100 million a year on average, now they are “struggling to stay afloat” (Funnell, 2016).
Studies into risk taking suggest that people or organisations are more likely to be risk seeking when they are below their desired level (Kahneman, 1979; West & Sargeant & Miciak, 1999) such as being behind where the company wants to be financially, or behind in their objectives. At this point in time, given the difficulties publisher are
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facing with revenue streams, perhaps the risk of misleading or deceiving readers is lower on the spectrum of importance versus the potential to attract advertising spend from brands?
Another risk that publishers are concerned about is the possibility that their audiences might become skeptical of other publisher content that isn’t native ad content. Research into skeptism and advertising suggests that skeptism often leads to less trust in the source, that consumers will start to rely less on the information from that source, and that generally consumers will give it less attention (Obermiller, Spangenberg, & MacLachlan, 2005). Thus it is likely that if consumers become skeptical of the native advertising content, they may also be skeptical of the publishers content.
Choosing to ignore these risks could potentially damage a publisher’s presence in the market. Recent research found that along with innovation and adoption of new technology, ethical decision making and a strong sense of social responsibility is considered to be of upmost importance to consumers if a publisher wants to ensure long-term viability in the marketplace and maintain audiences (Pavlik, 2013).
Risks for agencies Agencies identified the greatest number of potential risks associated with native advertising. As shown in Table 4.2, these risks included misleading consumers, readers feeling deceived by the brand, turning off audiences, below par quality content, consumers feeling missold etc. Importantly, none of the risks directly impact the agency, but instead are risks that are likely to impact the publisher and the brand. However, given that agencies are often the link between both parties, it is likely that they are concerned about the risk to both.
The risks that agencies are most concerned about are the possibility of “misleading customers” and “annoying consumers with less relevance than needed”. Specifically, agencies are worried the content they create will not be rich enough to satisfy the consumers needs for information they are seeking, and instead will result as just being annoying or irrelevant.
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The greatest risks to agencies are financial risks, connected to their relationship with the brand and the effectiveness of the campaigns they develop. The responsibility of the decision to utilise native advertising as a campaign strategy is often through an agency recommendation, so success is strongly linked to their efforts. Further any negative associations or backlash from using a native advertising strategy may threaten an agency’s credibility and potentially future relationships when working with brands.
Risks for brands Of all the risks identified, brands are most concerned about the potential that consumers will feel they have been misled or deceived through consuming native advertising content. As identified in the literature, research has found that consumers who feel deceived can respond in various ways including losing respect or trust for the brand, doubting future communication from the brand (Darke & Ritchie, 2007) a loss in sales, or even boycotting the brand (Martin & Smith, 2008).
The responses regarding the potential for consumers to feel deceived or tricked are quite strong for a brand, raising the question about why a brand would be willing to take the risk in the first place? Perhaps brands feel that the potential financial reward outweighs the risk to potentially lose consumers?
Risk theories suggest that for individuals or businesses to take risks there are two variables involved – how risky the situation is considered (risk perception), and the tendency for the business or individual to take the risk (risk propensity) (Sitkin & Weingart, 1995). In this context, perhaps brands see the risk of consumers feeling deceived or misled as lower because the brand is involved in the process of designing the content and therefore has more control over ensuring they aren’t deceived through labelling, or perhaps the option of not using native advertising and not connecting with the audience is a greater risk than using native advertising?
The literature suggests that brands have struggled in recent years to connect with consumers because of ad blockers and advertising clutter (Endicott et all, 2006; Yoo, 2009; Borges 2009; Johnson, 2013; Budak, Goel, Rao, & Zervas, 2016). Native advertising offers brands the chance to cut through this and engage with audiences in
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a value adding way. Perhaps brands view these risks as lower because they feel they are able to mitigate these risks by being transparent through labelling.
Summary of Risks As outlined above each stakeholder group (agencies, brands and publishers) are concerned about different risks and have differing risk outcomes when choosing to adopt a native advertising strategy. Table 5.2. below outlines these risks and details who is most at risk, the potential effects, the actions to minimise risk, and who should be responsible to minimise the risk to both the consumer and stakeholder.
Table 5.2. Summary of risks when using native advertising
Risks and Responsibilities Associated with Native Advertising
Risk Who is at Potential Action to Who is Outcome Risk Effect Reduce Risk Responsible Consumer Customer Clear labelling Publishers to Maintain potentially ensure labelling customer unable to Clear language and native content relationship evaluate to avoid the is able to be information potential of recognised as Customer able adequately misleading advertising and is to adequately consumers into different from interrupt Misleading thinking the publisher content information Consumers content is Brands Loss of trust unbiased Brands and Agencies should Loss of Increase use of also be customers brand elements responsible for checking that the final product is acceptable. Consumers Irritated / upset Clear labelling Publishers to Maintain ensure labelling customer Increased Clear language and native content relationship Scepticism to avoid the is able to be Deception towards brand potential of recognised as Customer able communication misleading advertising to adequately in future consumers into content and is interrupt (Darke & thinking the different from non information Ritchie, 2007). content is advertising Brands Potential to unbiased content damage relationships, Increase use of Brands and new and brand elements Agencies should existing also be responsible for Loss of trust checking that the towards brand, final product is and future acceptable.
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communication (Darke & Ritchie, 2007).
Less favourable attitudes towards brand (Craig, et.al, 2012)
Boycotting product (Martin & Smith, 2008) Agencies Damaged relationships with other stakeholders and consumers Turning Publishers Loss of Good content Publishers to off readership that is clearly ensure content audiences labelled as an meets needs and advertisement wants and is clearly recognisable as an advertisement Bad Publishers Loss of Create content Publishers, Engagement Content readership that is more agencies and with content Agencies Potential to engaging and brands all lose brand as a targeted to meet responsible to Potential for client customer needs ensure content sharing of and wants meets readers content with needs and wants peers and is engaging Consumers Publishers Readers not Clear Publishers to Consumers becoming trusting distinction ensure native will more content between paid advertisements understand the sceptical produced by and non-paid are clearly difference of future publisher content on recognised as paid between content of platform – content through advertising site Potential loss whether that is labelling and and publisher of readership labelling, potentially other content and announcing it identifiable maintain trust on video, etc. design elements with the reader Clear language
Lack of Create content Agencies and Higher effectiveness that is more Brands engagement Annoying Brands in connecting engaging and consumers with customers targeted to meet with customer needs irrelevance Loss of dollars and wants spent on advertising
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Agencies Potential strain between brand and agency for failed campaign
SEO - Brands Impact Ensure Publishers, Avoid Google communication appropriate brands, and penalties from may from brand links are agencies to ensure Google consider Agencies included so technical links are native Brand website Google is aware correct and not advertising may drop in content includes misleading for a paid link Google paid advertising Google resulting rankings and is not in penalty promoted as an editorial piece by Google.
5.3 IMPLICATIONS FOR THEORY
Through application of the Power-Responsibility Equilibrium (PRE) theory, this research has examined the relationship of power and responsibility from the perspective of the stakeholders in the native advertising process and highlighted their ethical and regulatory concerns. Overall, the findings indicate that the stakeholders demonstrate a strong commitment towards acting ethically and expect that all power holders should be responsible towards the consumer through transparency and labelling and in their contribution towards creation and publishing of the content.
This study has identified that there are various levels of power in creating and publishing native advertising content. Publishers hold a higher degree of power in the creative process and in the communication exchange with consumers, because they own the platform and are responsible for publishing content. Brands hold power over the type of content, the brand message, and approval to publish, whereas agencies hold the least amount of power and are held accountable by the brand.
The following figure 5.1 visualises the findings of this study. It depicts the relationship between power and responsibility and how they interrelate to influence the balance or disruption of the equilibrium.
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This diagram adds the inciting variable of risk as a determinant of whether the equilibrium will be disrupted or restored. The risks identified in this study include ethical and business risks such as include misleading consumers, deception, through to creating content that is annoying or irrelevant. The perceived risks are different for each stakeholder and vary from low to high-level risks.
Responsibility is depicted here as high or low responsibility. Depending on the degree of power and the height of the risk, the equilibrium is either disrupted or restored, when the power holder demonstrates a high or low level of responsibility, by taking action.
If the power holder determines that the risk is low and demonstrates a low level of responsibility, the balance of the equilibrium is disrupted. In contrast, if the power holder determines that the risk is high, and they demonstrate high levels of responsibility, the balance of the equilibrium is restored.
The degree of responsibility enacted is likely influenced by the stakeholder’s level of power, and the perceived risk.
Figure 5.1. Model of Power, Risk, and Responsibility.
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5.4 IMPLICATIONS FOR PRACTITIONERS
In addition to the theoretical contributions, the findings of this study have identified various practical implications for both regulators and content creators.
Implications for Policy Makers
This research provides valuable insight for regulators into how each of the stakeholder groups view native advertising and their different priorities for using it, and why there has been difficulty and confusion in defining native advertising to date. The inability to reach consensus based on the different stakeholder priorities provides reason for a higher level of authority to be involved to dispel confusion and bring clarity to the approach. It is highly unlikely that the stakeholders will otherwise be able to reach an agreement for how it should be defined or enacted.
In terms of regulation, this study contributes to the need for industry bodies to review native advertising practices and how to best regulate this approach. While this study has highlighted that stakeholders demonstrate a strong commitment and enthusiasm to act responsibly and be transparent with consumers, their primary strategy for doing so is through labelling.
As discussed, labelling is not always an effective method for signalling to consumers that content is advertising (Wojdynski & Evans, 2016). This is important for policy makers to understand and highlights the need for further consideration into how native advertisements should be identifiable to consumers beyond those outlined in the current guidelines.
Further, as leaders such as the European Union introduce more robust regulation such as the General Data Protection Regulation, the need to review how native advertising and its impact on consumer protection becomes more imperative. To brands and publishers, the risks also become higher. On one hand, some experts predict that the new data laws will provide more opportunity for quality native
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advertising as consumers can opt in if they see value in the content, or conversely they will choose to ignore it (Arnold, 2018; Mali, 2018). Either way, transparency and the ability to recognise the content as advertising will be key to avoiding fines and significant penalties if the stakeholders are found in breach (eugdpr.org, 2018).
This is a difficult task given that the nature of native advertising and its effectiveness lies in its ability to blend seamlessly into content, without disrupting the viewers experience on a platform.
Implications for content creators
This study has highlighted important considerations for stakeholders involved in the process of developing native advertising content. Given that stakeholders have different perceptions of and priorities for using native, it is important that all parties involved are clear in expressing these when working with clients or other stakeholders. Clear understanding of the ethical expectations and clarification around what their role entails, should be discussed to ensure consistency in direction and the delivery of a high level of ethical standard.
Further, it is important that those adopting native advertising strategies understand the types of risks associated with using native advertising. These risks are not the same across publishers, brands and agencies, but vary according to the priorities and motivations for using native advertising. Publishers risk the loss of readership, consumer backlash, credibility, and loss of advertising revenue. Brands face a potential loss in sales or trust if consumers feel deceived or mislead.
Because of the inherent nature and seamless design of native advertising into surrounding content, regulation is difficult; all stakeholders need be vigilant in their involvement to ensure that their decisions are ethical and socially responsible.
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5.5 LIMITATIONS OF THE STUDY
Due to the small sample size, the findings of this study may not be generalisable to a larger population.
However, the experts who did participate were of a high calibre and had extensive experience and knowledge in the area of digital marketing and advertising. Participants had a minimum of 10-20 years experience. The findings represent opinions from experts from various backgrounds and from different areas of the world.
Given the nature of digital advertising and the rapid pace at which it progresses, some of the findings or the opinions of the experts may have changed since the time of data collection and therefore may no longer reflect their current view.
Despite these limitations, the findings from this research provide valuable insight into how native advertising is viewed from the perspective of key stakeholders and acts as a good starting point for further research.
5.6 OPPORTUNITIES FOR FUTURE RESEARCH
Given that native advertising is a relatively new term (introduced in 2011), there are still many areas yet to be explored and understood within this approach. This study has provided a good starting point for future research and has highlighted several areas that researchers could explore. These include:
1. This study has presented a model that has added the variable of risk into the context of how stakeholders use their power to exhibit responsibility. Further research could explore this connection to confirm and clarify this model and gain a deeper insight into the risks and their influence.
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2. Through exploring the ethical and regulatory considerations in this research, some of the participants discussed that they had internal policies and procedures to ensure that they exercised ethical responsibility towards the consumer in their native content delivery. Further research could explore the types of internal processes and checks used by content creators when generating content, and importantly, to explore their effectiveness.
3. Further research is needed to explore better ways to signal to consumers that content is native advertising without stifling the creative flexibility and effectiveness of the content.
4. As identified in the literature review and results, ad blockers were identified as a potential threat. Future research could investigate how labelling and ad blockers impact native advertising and examine if native advertising is a viable option in the future if ad blockers begin to pick up native advertisements?
5. As discussed above, this study identified three elements that the stakeholders believe are unique to native advertising. These three elements are similar to advertorials. Further research could explore where the differences or similarities are in these three elements. Perhaps there is a difference in the degree of subtly in delivery of the brand message? Or the suggested increase in value in content? Or perhaps the main differences lie in the design and application of labelling? There is room for this to be explored further explored and clarified.
5.7 CONCLUSION
In summary this thesis has provided initial research into understanding native advertising from the perspective of the stakeholders involved in the creation of native advertising content.
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Specifically, this study identified four key areas of importance:
1. How native advertising is perceived and how it should be defined varies according to the different priorities of the stakeholder. This is driving the confusion when discussing native advertising’s definition within industry and academic literature. 2. The concept of power was discussed within this study. Each stakeholder carries different levels of power and therefore their level of responsibility changes in connection to this power. This study highlighted the power struggle from publishers to own the process of native advertising. Native advertising is important to publishers for several key reasons – because it offers them an opportunity to generate revenue, because brands are accessing their readership, and because native advertising offers content for their readers. 3. The findings revealed that all stakeholders feel a strong sense of responsibility and are ethically focused in their creation of native advertising content. Each group felt that transparency was important because it demonstrates ethical responsibility, and because transparency is thought to mitigate risk. 4. There are various risks and levels of risks associated with native advertising. These risks vary across the stakeholder groups and not shared equally. Each is exposed to different risks for different reasons. Risk was found to be connected to both power and responsibility in the context of native advertising.
To summarize this discussion, a model was offered demonstrating how the different levels of risk, the level of power influence the balance of power and responsibility.
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Appendices
APPENDIX A – WAVE ONE QUESTIONNAIRE
NATIVE ADVERTISING - WAVE ONE QUESTIONNAIRE 1 A definition used for native advertising is:
“Paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong”(IAB, 2013).
What aspects of the above definition do you agree with? What aspects do you not agree with? What key elements would you add?
2 Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms?
3 What are some examples of native advertising? For example is an article on a news site native advertising? What about paid search ads, video, tweets and other ads that appear on social network sites?
4 What should NOT be considered native advertising?
5 Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is there an approval process to make sure the content meets the requirements of native advertising?
6 Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? The brand? The self-regulatory organisation that regulates traditional advertising?
7 How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non-ad content?
8 What do you think are the risks associated with native advertising?
9 How will native advertising continue to evolve? (Format, platforms, its use etc.)
10 Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? Do you think ad blockers will become sophisticated enough to pick up on native advertising?
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APPENDIX B - WAVE ONE RESPONSES
Wave One Responses Question 1: What aspects of the above definition do you agree with? What aspects do you not agree with? What key elements would you add? Agree that its paid, assimilated, platform relevant and so on. However, where the challenge lies is the concept that the consumer feels they belong because there is a fine line between misleading and not misleading the consumer. I would probably say that the ad are environmentally and contextually relevant versus setting a dimension around who Participant 1 they feel. I am not sure about 'consistent with the platform behaviour'. Too vague. What is meant with an ad that is consistent with the platform behaviour? No idea.
Also problematic is 'the viewer simply feels that they belong': a) viewers differ, some may think, other don't; b) what is belong? I believe that ads belong to a newspaper but I would not call them native advertising. And: personally I do not believe that native ads Participant 2 belong to FB, although I am aware of the fact that they often appear... It's rare that a paid ad cannot be recognised, no matter how cohesive. Therefore I don't believe that users attribute a sense of belonging to the ads unless they are completely Participant 3 masked as editorial content. I don’t agree necessarily that the viewer thinks the advert “belongs”. That statement could be interpreted as patronising the user. Lots of users will be very aware that the native advert is exactly that – an advert despite it being very consistent with the content/design of the page. I would add something along the lines of “the user does not Participant 4 feel that the advertising is intrusive”. I agree with the definition. I might add that there is an element of storytelling without Participant 5 the hard sell.
I agree that native advertising should look and feel like the site they are on and look “native” to the site. I wouldn’t disagree with any part. I do feel that native ads should be tagged up so that readers/customers are aware the Participant 6 content is paid for but still in line with the aesthetic of the site. I think this definition limits native advertising to editorial content, whereas branded content that leans and leverages from that media platform can take so many formats and appear on many different channels in a multitude of guises. The definition also assumes that the viewer ‘feels’ something, whereas in the majority of best in class examples of branded content – the viewer is only responding to the content (laughing, crying, Participant 7 sharing) not feeling whether it ‘belongs’ or not. I agree with the statement. However a key element in successful advertising is disruption. To be effective and generate ROI the message must stand out from rather Participant 8 than belong to the platform. I agree with this definition. My one concern with native is that the industry definition includes a lot of disparate buckets in which nearly all advertising can be described as Participant 9 native from text links in the footer to custom sponsored content. I agree with most of it. The trouble is the phrase "that they belong" that sounds like a euphemism for the viewer thinking of them as actual content rather than a paid ad. By that definition, car ads in a print auto magazine would be "native" but we just call it an Participant 10 "ad" with a good media placement. The definition of native advertising that we have developed internally and use is: quality content, inspired by a brand, delivered in-stream. We do often add to this that it needs to be "clearly signposted" as the aim is not to fool the audience, but to add to their experience by giving them quality content that they may not have had if it wasn't funded Participant 11 by an advertiser. I agree to a certain extent that Paid Ads can sometimes be cohesive with page content, however, the above definition is an ideal and perfect definition that doesn’t happen in reality. In most cases, paid ads are placed on platforms to best reach Target Audiences in terms of the viewership and lifestyle preferences. For example, an FMCG brand promoting beverage to teens will place their ads on key websites most visited by teens (i.e music), and simply adapt existing ads to fit into the paid ad format (not assimilated Participant 12 into the design), and not consistent with the platform behavior.
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I agree with the IAB definition. I think native advertising environments allow advertisers to align themselves with native editorial content. It should not be seen to be misleading or persuasive behaviour by publishers to have advertisers align with their Participant 13 editorial. I think it is good practice for the native ad to be "so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong" but really native advertising is when the ad is not third Participant 14 party served but rather coded into the website.
Question 2: Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms? It's all the same thing. We have just got better at it over the years and started calling it Participant 1 different things. For me they are the same; the term native ads is used for social media (while sponsored Participant 2 of branded content is more general and advertorials are in print media). Sponsored content is attributed to the sponsor and in order to deliver value, by definition, needs to be clearly indicated.
Branded content is more subtle and relies on the strength of the host content/brand along with an assumption that the association will lead to a positive view of the paying client. Benefits tend to be accrued over a longer period of time.
Participant 3 Advertorials are more likely to ignored unless they are camouflaged. Participant 4 I think “Native Advertising” is a generic term that covers all of the above. Sponsored content is content created by the publisher but then the brand pays money for the rights to be affiliated with that content. Branded content is content created by the brand for the publisher. Advertorial looks more like an adverts, in that, it tries to persuade – it is more obvious that it has an advertising message. Having said that, is there a need to determine the differences. They are all used incorrectly and the above is just how I partition them. I don’t really think there is any Participant 5 factual answer to your question. From HuffPost perspective, we stand very firm on what native means to us. The content is brand inspired but written in a HuffPost tone of voice. Our perspective is that sponsored content, branded content and advertorials are far more flexible and accommodating in terms of brand mentions with the copy of the content – native advertising should not do this unless there is a relevant and genuine link from the content to the brand URL. Native Advertising should be content that provides the readers with relevant content in an environment that they are already familiar with – the content makes implicit links to the brand while the integration message, presented by text and the logo lock up are the Participant 6 explicit links to the brand and make the association clear. As per above; native advertising and advertorials are narrow by editorial. I think content Participant 7 marketing is a better catch all term. At a top level there are two forms of content in all media: editorial and advertising. Sponsored content, to me, implies a top level branding message not a content rich specific native campaign. Advertorials implies a written advertisement whereas native advertising is less editorial in nature. Branded content implies the tone of the creative Participant 8 within an advertisement. Sponsored content is one type of native advertising which is native to the platform per Participant 9 the definition above. Sponsored content, branded content, and advertorials don’t intend to mislead people Participant 10 into thinking they are not ads. Native ads are happy to confuse people I like to view it on a scale, starting with advertorial > sponsored content > branded content > native advertising, where the whole point of native is to make it as relevant as possible for both the audience AND the brand. Advertorial is generally good for the Participant 11 audience and not the brand, and native is the quest to be just as good for both. They are similar, just different in terms of output look and feel and the amount of Participant 12 branding to be seen by consumers. Native content is written by an existing editorial team as publisher content, it does not take client objectives into account and would be published with or without advertiser Participant 13 alignment. Branded, sponsored and advertorial content is content commissioned by an
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advertiser to align to their campaign objectives.
Native advertising is not content but an ad unit that commonly contains a picture, title, text and a call to action, and links to an external website. Branded and sponsored Participant 14 content typically deals with content on the publisher's website, not the brand website.
Question 3: What are some examples of native advertising? For example is an article on a news site native advertising? What about paid search ads, video, tweets and other ads that appear on social network sites? The definer that it is advertising is that it is paid, paid is advertising. How you pay, like Participant 1 sponsorships or paying a publisher to create an article is advertising to me. Participant 2 again: native advertising is advertising on social media. Given the extent that Google have gone to in order to make their paid ads appear like organic website listings, you could say that they are native advertising. An article on a news site or in print is only native advertising if it seeks to promote a product or service in a hidden way, which is generally against the editorial policy of any publications that have a reasonable readership. Blogs are different. They make their own policy. So if a blogger receives a payment to promote a product, then it's his job to do that in the most Participant 3 effective way and native advertising is key. Advertorials are a great example of native advertising but also so is a very strategically placed paid ad banner. Dynamic content with social feeds is perhaps the most widely used form currently and its no surprise that if an advertiser wants a high level of Participant 4 engagement then this is the way to drive the message. I think here you are focused on location, but I think it has more to do with content. For example, if there was an article on a news site and that article was about the number of home burglaries in the area and how those had increased and then some safety solutions (ie the brand motivated content), then yes, it is native. It looks like a piece of news, contains burglary statistics etc.
No, I don’t consider paid search adverts native only because I don’t see them as integrated, and seamless with a search page. I suppose that if someone was on a cruise search and a paid advert popped up BUT the content of that advert was about ’10 tips before going on a cruise’, and the reader could not distinguish this as a piece of paid content then it could be considered. To date, I have not seen that – a piece of content that assimilates into the page. It doesn’t blend.
Social Networking sites have done a better job of blending. They can have more storytelling in them. So, you become involved in the content, forgetting it is native. You can be going through your newsfeed and there is an article that is really interesting, but Participant 5 it is sponsored content. Native advertising should be sponsored content that is sitting on a site, that looks and feels like the sites primary offering - whether that’s news, vids, music, photos etc- but is clearly tagged up to let readers/consumers know that the content is supported Participant 6 commercially. Its so broad, and can range from digital partnerships (ie. This one with GE and The Guardian) http://powering-people-city.theguardian.com/ to this which was a Channel 9 Participant 7 TV that told the story of Qantas: https://www.youtube.com/watch?v=F0Ena1FhSKQ These: http://www.copyblogger.com/examples-of-native-ads/. Print advertorials online advertorials, Video advertorials, Sponsored content, branded content, product Participant 8 placement, in feed ads, sponsored posts, promoted tweets, Google text ads Yes, if it’s paid for by a sponsor (aka sponsored content). All items listed above would count as native according to the IAB definition. Obvious, paid search ads and tweets are currently mostly text, direct response ads intended to mostly drive clicks to a site. More like classic direct response advertising paid based on performance. Elegant sponsored content like the kind being done by the New York Times, Washington Post and other premium brands is the antithesis of these text links as it drives hearts and Participant 9 minds true to the goals of classic brand advertising. If it is identified as an ad, then I don’t think they are native. Just an ad pretending to be Participant 10 content, that’s native.
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There is some confusion around this. When I and most other people in the media refer to Native Advertising, what we really mean is Native Content ie. content that is created for a brand that feels like other types of content that the media produces. The other side of "native advertising" is literally "ads" that are placed "in-stream" - ie. Facebook Sponsored Posts or Twitter Promoted Posts. Whilst these are technically called "native advertising" they are bascially just ads that have cleverly positioned to appear in the same place as content, but this is generally not what the industry is talking about when it Participant 11 talks about native advertising. Agree that the examples provided are some examples of native advertising. Participant 12 Additionally, there is paid ad display. Native advertising is anything written/controlled by an editorial team which would be written or published without advertiser alignment. If paid search ads, video, tweets etc would have been posted without advertiser alignment I would also consider these Participant 13 native. Native advertising is often not third party served or managed by an exchange. Rather it Participant 14 is managed by the publisher and often coded into the website.
Question 4: Which types of ads do you think are incorrectly referred to as native advertising? Ads like Facebook that are targeted and not content context relevant. E.g. Dollar shave club isn’t relevant to my news feed, but is targeted as I buy razors. That’s not native its Participant 1 display! Participant 2 I would restrict the term to paid ads in social media that aims to hide being an ad. All "ads" are by definition NOT native advertising. I'm unaware of any that are classed specifically as native advertising. Although I guess that a disguised advertorial could Participant 3 quality. Display adverts or any advert that is placed within an obvious advert placement of a Participant 4 web page. Sorry, not sure on this one. I am not immersed in this field and I am not widely read to Participant 5 be able to comment. Advertorials where the content is obviously brand related and brought to you by that Participant 6 same brand. I think using the word ‘ads’ is not the right way of looking at it. Native advertising is where you put the user and the content first, looking to fulfil an audience need or desire Participant 7 with content. Ads are where you push a message to someone not expecting a reaction. Participant 8 Most paid search ads aren’t native. They are clearly labelled as ads. None, it’s why I’m not a fan of the term “Native advertising”! http://www.adweek.com/news/advertising-branding/jason-kint-refocusing-digital- Participant 9 content-next-161104 Participant 10 I can’t think of good examples here. Facebook Sponsored Posts or Twitter Promoted Posts, Yahoo in-steam ads, Outbrain, Taboola. These are not really native advertising, they are just ads that are positioned Participant 11 where content normally is. If based on your definition of what native advertising is, then most ads are incorrectly referred to as native advertising (based on my answer on Question 1), unless Advertisers have the time, budget to tailor and customized content for each media buy specifically Participant 12 (which in reality doesn’t happen as it’s usually adaptation). Participant 13 Anything commissioned by a client Third party served display ads or dynamic ads that either statically or dynamically have Participant 14 the same design elements as the website.
Question 5: Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is there an approval process to make sure the content meets the requirements of native advertising? All of the above. And there should be approval processes of some construct even if not Participant 1 the final content. Participant 2 I don't understand this question. For me it is not important who creates the ad.
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Ultimately the editor or owner of the publishing platform should be responsible for what is published. If an agency wanted to submit copy, this would be considered and potentially edited by the editor. Nobody would give an ad agency carte blanche to publish an "article" directly onto a respected site. Equally, nobody can stop them from adding native advertising as article/blog comments where possible and done cleverly Participant 3 this can elicit results. Participant 4 It should be collaboration between all of the above for it to work best. I don’t think it matters. All I think that happens is that it changes the name of it to sponsored or branded content. At the end of the day, native content requires rich, compelling storylines that are seamlessly embedded so that the reader enjoys the reading experience without the obvious connection to a brand. I think anyone can write Participant 5 the content – it doesn’t detract from the ability to create native advertising. The publisher should have the ultimate control of the production of the content, from ideation to publishing. Creative elements from a brand or an agency can be discussed and incorporated when genuine and relevant to the content and the user experience. At HuffPost we only publish content produced out of the Partner Studio team for Native Content. Participant 6 Our clients are allowed two rounds of approvals to ensure we meet client objectives. Participant 7 The publisher of the content, with guidance from the agency and brand. Agencies, every time. The approval process is the responsibility of all three. Brands should ensure the message and motives are befitting of their organisation. Agencies should ensure that the campaign matches their own ethics and represents good value to their client. Publishers have an overriding legal obligation for the ads they cover and to Participant 8 ensure the content is relevant to their audience. It really depends on the type. If it’s sponsored content that seeks to actually fulfill brand goals by captivating audience’s attention then I would argue no one is better at this than publishers. Yes, there should be an approval process. Ultimately, it’s an Participant 9 advertisement paid for and conducted for the sponsor. An agency should do them like most ads. Agencies have a slightly higher level of moral Participant 10 standards. I firmly believe the same people who create the usual content for the publisher should also create native content. That way you're ensuring the quality is just as high, and not creating a tiered content team. That is why traditional advertorial (for magazines, newspapers TV, radio etc) has such a bad reputation - as the advertorial teams did not Participant 11 create the same high quality content as the regular content creators. Brand to provide very clearly Brand architecture, guidelines, and objectives. Agencies to create, write Participant 12 Publish to input on how to best fit the content to their platform, and launch If content is truly native it should be created, written and published by the publisher, blogger etc. Whoever owns the platform it is being published on. The approval process Participant 13 should be the same as normal content published by this medium. The brand/agency should be responsible for the creating and writing of the content. Participant 14 Shouldn't the publishing be the publisher's role? I think so.
Question 6: Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? The brand? The self-regulatory organisation that regulates traditional advertising? Regulating is a government/authority responsibility. Publishers, producers, agencies and Participant 1 clients should all self regulate if they produce or distribute it. Participant 2 The publisher. Participant 3 Publisher. It should be the publisher first and foremost followed by a regulating body such as the Participant 4 ASA. Self Reg Organisations, and Professional bodies (eg TCC, MFA and IAB) and Govt should educate the advertising industry and media industry about regulatory information. In addition, the media also have responsibility to review information from professional bodies and self-regulatory organisations and Govt.
Yes of course ASB should regulate native advertising – it is still advertising. Same as ACCC watches for misleading and deceptive conduct. It is all advertising and the same Participant 5 rule applies.
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We follow the INMA guidelines and we feel it is our responsibility to regulate our own Participant 6 native content to ensure our readers are not served offending or misleading content. I think branded content is regulated by consumers – if it’s bad they’ll tell you or turn Participant 7 off, if it’s good they’ll share and come back for more. All media professionals have an overriding responsibility to ensure commercial Participant 8 messages are legal, decent, honest and truthful regardless of the medium or tactic used. There needs to be established rules by a self-regulatory group and/or regulator guidance as we’ve seen here in the States with the FTC. Publishers then need to stick to that guidance as ultimately violating it risks the trust of their audience which is their most Participant 9 precious asset. Publishers (by self-regulation) and whoever (e.g. govt agencies / industry groups) regulates other ads. The trouble is that most webpage publishers do not have the kind of public profile major print publishing organisations have. If a webpage does something fly-by-night and get caught, they just pull up stakes and create a new webpage.
To me, the internet is a public good like the airways, and thus there’s a place for Participant 10 government regulation. The publisher is the ultimately owner of all of the content they create, so they should be Participant 11 self-regulating it. Participant 12 The publisher with clear communication to other stakeholders The medium creating, writing and publishing the content should be responsible in Participant 13 ensuring it doesn't offend or is misleading. Participant 14 The publisher
Question 7: How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non-ad content? Very important, not being transparent dilutes trust and trust is important to brands and Participant 1 publishers If I were a publisher I would make sure that ads (including native ads) are indicated as Participant 2 ads, and/or that the audience understands that. I'm in favour of allowing people to advertise products to their audience without indicating that they are being paid to do so. The internet has done away with any argument that we should maybe control things in this way. Just like it has done with copyright in a lot of cases and individual privacy etc. If somebody has been smart enough to gather an audience that somebody else is willing to pay to be in front of, good Participant 3 luck to them. The more an advert is native, then the less obvious that its an advert so my view is that if it’s really, really clever, highly targeted, on message, on brand, in keeping with the design of the publisher site, then it becomes less important. However, if it is trying in anyway to be controversial or against the theme of the publisher content then it is Participant 4 important. I feel it is important. We need to treat consumers with respect. We need to identify the Participant 5 source of the information, otherwise we are misleading. Very - Transparency to our audience is paramount but we pride ourselves on producing relevant content that sees them coming back and engaging with our native advertising. If the content is relevant enough, the reader will still consume it as they trust we are Participant 6 providing them content they trust. I think in editorial (print/online), it’s important to disclose, but beyond that new Participant 7 channels and media make it hard to put standard practices in place Extremely important. Due to the fuzzy interpretation of cross border advertising Participant 8 legislation this will remain difficult to enforce. Super important, see above. Advertisers don’t have the same vested interest here as publishers. Publishers need to protect the trust of their audience. Advertisers left to Participant 9 their own devices are trying to drive business. It is absolutely essential that we have a situation where consumers always know an ad is Participant 10 an ad. Then it is no longer a native ad, and instead is merely a well placed ad. Super important to signpost native content. The aim is not to fool the audience, and as Participant 11 content creators we should we super proud of the native content we are able to produce. Ethically, consumers should be able to differentiate paid vs non-ad content. However, as an advertiser (brands), we would like client to think that the content they are seeing are non-ads. As for agencies and publishers, I believe it comes down to regulations and brands’ Participant 12 demands.
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Participant 13 Extremely important. Transparency is key Participant 14 I feel that it is important in making sure the reader does not feel deceived or mislead.
Question 8: What do you think are the risks associated with using native advertising? Misleading consumers, Disrupting value of the publishing environment, annoying Participant 1 consumers with less relevance than needed, annoying clients with bad content Participant 2 That the audience/users of the social medium do not trust the medium anymore. Participant 3 Being mis-sold. But you get mis-sold all day every day anyway. That a consumer could be mistaken into thinking the product/service is endorsed by the Participant 4 publisher. Backlash if you appear to be too covert. You need to have identifiers because you want the reader to be surprised that the content was advertising, but not angry because they didn’t know it was advertising. Participant 5 Because there is no current “standard” when it comes to native advertising, there is generally a lot of education for agencies and clients as to what constitutes as native and because there is not a consistent message in market across different publishers, the risk is that consumers will be offered a variety of different versions and thus become Participant 6 sceptical as to what they are being served. Participant 7 Unless done properly with quality by the publisher, they risk turning off their audiences Lack of regulation. It is a great tactic for guerrilla marketing which has yet be exploited Participant 8 by unscrupulous marketers. Audience trust. https://digitalcontentnext.org/blog/2015/11/19/playing-poker-betting- Participant 9 big-on-the-brand/ If people figure out they've been duped, they are upset. Not only at that advertisers, and Participant 10 that media, but all advertising and media in general. The biggest risk is that the content sucks, which can easily happen with native Participant 11 advertising if not given enough attention. Native advertising is part of an overall media buy, and the risks for Brands/Advertisers Participant 12 is the ability to track, generate the right reach, delivering on KPIs and ROIs Participant 13 Loss in consumer trust is the biggest risk, again, transparency is key. The risk is that the reader feels deceived by the brand, if the native ad copy promises genuine, insightful content, but delivers a sales page or form. There is also an SEO risk Participant 14 because Google can consider it a paid link resulting in a manual penalty.
Question 9: How do you see native advertising continuing to evolve? (Format, platforms, its use etc.) Participant 1 Better targeted and optimized through data and responses advertisers will always try to find ways to reach consumers trying to hide the Participant 2 commerciality of the sender. Everybody should be made aware that what they read (anywhere) may not be all it Participant 3 seems and may be promoting a product or service. Social media is the way forward so more dynamic content on social is how it will Participant 4 evolve. Technology will enable online paid adverts to be seamlessly integrated so that they do more than just have a banner advert or pop up. That kind of advertising is just annoying. Participant 5 As technology evolves, how we present content and stories about brands will alter. As native advertising becomes more and more common, there will need to be a hierarchy of format types/cost structures with the key to this being in the way in which the content in amplified. Using owned channels more predominantly rather than content referral platforms or paid for audiences. And as content continues to be more in line with what is generally produced for a publisher, readers will continue to engage and the metric for this sort of advertising will need to have more rigour around Participant 6 engagement/dwell times and relevant audiences reading relevant content. I think content marketing as a whole will continue to grow – native advertising as a phrase will die out I believe as it’s not an accurate description of what the industry is Participant 7 doing The blur between paid for content and editorial will continue to be hazy. Native Participant 8 advertising will become an essential way of amplifying all traditional campaigns. likely cleared rules around labels and consistent conventions in order to not surprise audiences. The advertising in the sponsored links boxes at the bottom of pages will Participant 9 continue to bifurcate from sponsored content as it should. They’re radically different
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forms of advertising.
We need to have some kind of format that identifies ads as ads. Im not sure what that Participant 10 will look like, but that’s what we need. Yes, it's getting a lot more sophisticated, and brands are getting a lot better at making sure it works for them. We are starting to see brands doing long term native content Participant 11 plays, like Qantas with AWOL and Westpac with The Cusp. Native advertising will continue to evolve in terms of format offers across different Participant 12 platforms. I don't see native advertising going anywhere anytime soon. There are huge Participant 13 opportunities for further growth in native advertising. Native advertising and native sponsored content, and the ability to drop a cookie on Participant 14 readers that go to the content from that ad. Question 10: Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? Do you think ad blockers will become sophisticated enough to pick up on native advertising? Participant 1 Yes. At least including and thinking about it. Yes Yes, these are the reasons for native advertising. I believe that ad blockers will become sophisticated enough to pick up on native. I also believe that advertisers will try to find Participant 2 new ways, etc. No, ad blockers won't cope with native advertising. I believe we will see more and more of it as long as the numbers reveal a positive return on investment. It will find it's own Participant 3 market level for each sector. I don’t think its a conscious decision made to counter ad blocking, rather I think its advertisers responding to consumers being more savvy and demanding more intelligent forms of advertising rather than just a plain old display ad which they can ignore. So its Participant 4 a necessary evolution of ad formats. Yes, I do think it is to counter ad avoidance online BUT it is not limited to online. The same is true for print advertising, where newspapers are filled with native advertising. You read a newspaper and go from one article to the next and you are suddenly reading something interest, and it may only be at the end, or when you re-look at the tiny words ‘sponsored content’ that you realise that it is an ad. I cannot comment on ad blocking Participant 5 software. Initially I think this is why there is a considerable interest in native advertising but it’s also the engagement with relevant audiences. As we discover more benchmarking and ROI for advertisers, there should be a more considered approach to spending on native advertising. Ad Blockers will probably become sophisticated enough to block the promo drivers to the content but not to block the content itself. This will see a reliance on pushing native Participant 6 advertising out through own channels more and more. Yes they’re doing it to avoid adblocking, but moreover they’re doing it because they know it’s the best way to reach their consumer – by adding value, and making your Participant 7 communication a value exchange No. I think brands are using native advertising to complement other forms of marketing and amplify their effectiveness. I think marketers are also using native advertising to Participant 8 increase their impact as many users will not regard the ad as a commercial message. I think anyone who believes native advertising is a panacea to ad blocking is significantly mistaken and/or trying to drive their own self-interests. If what allows native advertising to avoid an adblocker is that the consumer/tech doesn’t know it’s an advertisement then the premise is flawed from the beginning. Ultimately native will be Participant 9 better labeled and will be blocked if it’s not driving consumer value.
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Of course. Of course.
Sure, but unscrupulous advertisers will just find other ways through the blockers. The legitimate way to deal with this is that we need to be upfront with audiences that advertising pays for the content. If you use ad blockers, you shouldne be able to access the site (undless you turn off the blocker) . The time will come when this quid pro quo will b e more straightforward. There are two ways to pay for content. One is subsciprtion based, the other advertising based. There's nothing for advertisers to be asheamed of regarding this. Its just the facts we accept on television or radio. But folks on the web have b een giving away the content free for too long. We have to stop this and not feel guilty about it. But at the same time, we should not overly just try to get around ad blockers. Be upfront. If you use an ad blocker, you cant access the site. Thats Participant 10 fair. Ad blockers will not be able to pick up native content, and publishers will continue to find ways around that if they do. Native advertising is the only thing that will always Participant 11 find a way around ad blockers. Most Brands/Advertisers key objective of using native advertising is to use the best platform to best reach consumers and be able to differentiate in a very cluttered marker, Participant 12 and not so much considering ad blocking. I think advertisers should only seek out native advertising if it meets their campaign objectives, not simply to dodge ad blocking sofware. There will always be a degree of advertiser avoidance, both on and offline, but native advertising should blend with traditional editorial and if it is done well, should not be identified in order to be ad Participant 13 blocked. I think there is implicit behaviour that causes people to ignore standard looking display advertising, and native advertising is a method being used to prevent those heuristic responses. Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? I don't think the main motive is a way to deal with ad blocking. Do you think ad blockers will become sophisticated Participant 14 enough to pick up on native advertising? No.
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APPENDIX C – WAVE TWO QUESTIONNAIRE
INSTRUCTIONS: Please rate your agreement with EACH of the following statements on a scale of 0 -100 (where 0 is complete disagreement and 100 represents total agreement). Statements are based on participant responses from WAVE 1.
Question 1: “Paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong”(IAB, 2013). What aspects of the above definition do you AGREE with? What aspects do you NOT agree with? What key elements would you ADD?
STATEMENT RATING/100 I agree with this definition The above definition is an ideal and perfect definition that doesn’t happen in reality It’s rare that a paid ad cannot be recognised, no matter how cohesive I don’t believe that users attribute a sense of belonging to the ads unless they are masked as editorial content I don’t agree that users necessarily think the advert “belongs”. Lots of users will be very aware that the native advert is an advert despite it being very consistent with the content / design of the page. I would add the “user does not feel that the advertising is intrusive” I think this definition limits native advertising to editorial content, whereas branded content that leans and leverages from that media platform can take so many formats and appear on many different channels in a multitude of guises The definition assumes that the viewer ‘feels’ something, whereas the majority of best in cases examples the viewer is only responding to the content (laughing, crying, sharing) not feeling whether it ‘belongs’ The industry definition includes a lot of disparate buckets in which nearly all advertising can be described as native from text links to custom sponsored content Platform behaviour and ad’s ‘belonging’ are vague ideas Ads should be tagged so that viewers are aware the content is paid for but still in line with the aesthetic of the site Native advertising is when the ad is NOT third party served but rather coded into the website I believe native advertising is quality content, inspired by the brand, delivered in-stream
Question 2: Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms? STATEMENT RATING/100 It’s all the same thing - We have just got better at it over the years and started calling it different things There is no need to determine the differences. They are all used incorrectly. I don’t really think there is any factual answer to the question. Content marketing is a better catch all term Native advertising: (Please rate your agreement)
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a. Is used mainly for social media b. Is less editorial in nature than advertorials, sponsored or branded content c. Written by an existing editorial team as publisher content d. Provides the readers with relevant content in an environment that they are already familiar with - the content makes implicit links to the brand while the integration message, presented by text and the logo lock up are the explicit links to the brand and make the association clear. e. An ad unit that commonly contains a picture, title, text and a call to action and links to an external website. Sponsored Content: (Please rate each) a. Is more of a general term while native advertising is more about social media b. Is created by the publisher but then the brand pays money for the rights to be affiliated with that content. c. Sponsored content is one type of native advertising. d. Content on the publishers website, not the brand website. Advertorials: (Please rate each) a. Is used more for print media b. Look more like an advert, in that, it tries to persuade. It is more obvious and it has an advertising message. c. A written advertisement Branded content: (Please rate each) a. Content created by the brand for the publisher b. Is more subtle and relies on the strength of the host content/ brand along with an assumption that the association will lead to a positive view of the paying client. c. The tone of the creative within an advertisement d. Typically deals with content on the publishers website, not the brand website. Sponsored content, branded content, and advertorials don’t intend to mislead people into thinking they are not ads. Native ads are happy to confuse people Branded, sponsored and advertorial content is content commissioned by an advertiser to alight to their campaign objectives Sponsored content, branded content and advertorials are far more flexible and accommodating in terms of brand mentions I like to view it on a scale, starting with advertorial > sponsored content > branded content > native advertising, where the whole point of native is to make it as relevant as possible for both the audience AND the brand.
Question 3: What are some examples of native advertising? For example is an article on a news site native advertising? What about paid search ads, video, tweets and other ads that appear on social network sites? STATEMENT RATING/100 Examples of native advertising (Please rate each) a. Advertising on social media b. Google listings and text ads c. Advertising that is paid d. Article only if it seeks to promote a product or service in a hidden
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way e. Advertorials f. Dynamic content with social feeds g. News h. Videos i. Music j. Photos k. Print advertorials l. Online advertorials m. Sponsored content n. Branded content o. Product placement p. In feed ads q. Sponsored posts r. Promoted tweets s. Just an ad pretending to be content t. Ad’s that are literally placed in stream u. Anything written / controlled by an editorial team which would be written or published without advertiser alignment. v. Sponsored content that is sitting on a site, that looks and feels like the sites primary offering - Whether that’s news, vids, music, photos etc.- clearly tagged up to let readers/consumers know that the content is supported commercially.
Question 4: Which types of ads do you think are incorrectly referred to as native advertising? STATEMENT RATING/100 Incorrect Examples (Please rate each) a. Ads like Facebook which are targeted and not context content relevant b. Paid search ads in social media c. ALL “ads” are by definition NOT native advertising d. Display adverts e. Any obvious advert placement of a web page f. Advertorials where the content is obviously brand related and brought to you by that same brand g. Facebook sponsored posts h. Twitter promoted posts i. Yahoo in-stream ads, Outbrain, Taboola j. Most ads are incorrectly referred to as native advertising k. Anything commissioned by a client l. Third party served ads or dynamic ads that either statistically or dynamically have the same design elements as the website
Question 5: Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is there an approval process to make sure the content meets the requirements of native advertising? STATEMENT RATING/100 Creating / Writing: a. I don’t think it matters. b. The publisher should have the ultimate control of the production of the content from ideation to publishing. c. If content is truly native it should be created, written and published
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by the publisher or blogger. d. Publishers should provide input on how to best fit the content into their platform and launch e. Brands should ensure message and motives are befitting of their organisation f. Brand provides brand architecture, guidelines and objectives g. Agencies to create and write h. The publisher of the content, with guidance from the agency and brand i. There should be a collaboration between all parties involved Approval: a. Approval process is the responsibility of all three – the brand, agency and publisher b. Agencies should ensure that the campaign matches their own ethics and represents good value to their client c. Publishers have an overriding legal obligation for the ads they cover and to ensure the content is relevant to their audience d. Approval should be the same as any normal content published by this medium
Question 6: Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? The brand? The self-regulatory organisation that regulates traditional advertising
STATEMENT RATING/100 Publishers, producers, agencies and clients should all self regulate if they produce or distribute it. Publisher Needs to be established rules by a self-regulatory group / regulator guidance as we've seen in the USA with the FTC. Regulated by consumers - if its bad they'll tell you or turn off, if its good they'll share and come back for more.
Question 7: How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non-advertising content? STATEMENT RATING/100 Important that the reader does not feel deceived or mislead Extremely important, transparency is key I'm in favour of allowing people to advertise products to their audience without indicating that they are being paid to do so. Consumers should be able to differentiate paid vs. non-ad content. However, as an advertiser (brands), we would like client to think that the content they are seeing are non-ads. I think in editorial (print/online), it’s important to disclose, but beyond that new channels and media make it hard to put standard practices in place
Question 8: What do you think are the risks associated with using native advertising? STATEMENT RATING/100 Misleading consumers Disrupting value of the publishing environment Annoying consumers with less relevance than needed Consumers being mis-sold The consumer could be mistaken into thinking the product/service is
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endorsed by the publisher Backlash if you appear to be too covert Because there is no current "standard" when it comes to native advertising, consumers will be offered a variety of different versions and thus become more skeptical as to what they are being served. Risk turning off their audiences Biggest risk is that the content sucks Risks for brands/advertisers is the ability to track, generate right reach, delivery on KPI's and ROIs Reader feels deceived by the brand SEO risk because Google can consider it a paid link resulting in manual penalty
Question 9: How do you see native advertising continuing to evolve? (Format, platforms, its use etc.) STATEMENT RATING/100 Better targeted and optimized through data and responses Advertisers will always try to find ways to reach consumers trying to hide the commerciality of the sender. More dynamic content on social As technology evolves, how we present content and stories about brands will alter. As native advertising becomes more and more common, there will need to be a hierarchy of format types/cost structures with the key to this being in the way in which the content in amplified. Using owned channels more predominantly rather than content referral platforms or paid for audiences. native advertising as a phrase will die out I believe as it’s not an accurate description of what the industry is doing The blur between paid for content and editorial will continue to be hazy. Native advertising will become an essential way of amplifying all traditional campaigns. The ability to drop a cookie on readers that go to the content from that ad. We need to have some kind of format that identifies ads as ads. I’m not sure what that will look like, but that’s what we need.
Question 10: Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? STATEMENT RATING/100 Native advertising is being used to counter advertising avoidance online I don’t think it is a conscious decision to counter ad blocking, rather I think its advertisers responding to consumers being more savvy and demanding more intelligent forms of advertising rather than just a plain old display ad which they can ignore. Native advertising is being used mainly because they know it’s the best way to reach their consumer - by adding value, and making your communication a value exchange Brands are using native advertising to increase their impact as many users will not regard the ad as a commercial message Unscrupulous advertisers will just find other ways through the blockers. Key objective of using native advertising is to use the best platform to
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best reach consumers and be able to differentiate in a very cluttered market, so not so much considered about ad blocking. I don't think the main motive [for using native advertising] is a way to deal with ad blocking
Do you think ad blockers will become sophisticated enough to pick up on native advertising? a. Ad blockers will be able to eventually pick up on native advertising b. Ad blockers won’t cope with native advertising. c. Ad blockers will probably become more sophisticated enough to block the promo drivers to the content, but not to block the content itself d. Native advertising is the only thing that will always find a way around ad blockers
THANK YOU!
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APPENDIX D – QUESTION 2 - STATEMENTS THAT DID NOT ACHIEVE CONSENSUS
Question 2: Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms? Overall % Overall % by Group STATEMENTS Publishers Agencies Brands Academics It’s all the same thing - We have just got better at it over the years and started calling it different things 42.8 50 50.25 35 33.33 There is no need to determine the differences. They are all used incorrectly. I don’t really think there is any factual answer to the question. 34 45 31.25 40 26.66 Content marketing is a better catch all term 47.7 60 53.75 40 36.66 Native advertising: (Please rate your agreement) a. Is used mainly for social media 34 25 21.25 35 56.66 b. Is less editorial in nature than advertorials, sponsored or branded content 31 15 26.25 65 26.66 c. Written by an existing editorial team as publisher content 40 65 20 60 36.66 d. Provides the readers with relevant content in an environment that they are already familiar with - the content makes implicit links to the brand while the integration message, presented by text and the logo lock up are the explicit links to the brand and make the association clear. 55 75 47.5 70 43.33 e. An ad unit that commonly contains a picture, title, text and a call to action and links to an external website. 36 45 21 70 30 Sponsored Content: (Please rate each) a. Is more of a general term while native advertising is more about social media 29 15 13.75 25 63.33 b. Is created by the publisher but then the brand pays money for the rights to be affiliated with that content. 47 80 20.25 35 70 c. Sponsored content is one type of native advertising. 65 45 93.75 65 40 Advertorials: (Please rate each) a. Is used more for print media 68 65 83.75 30 76.66 c. A written advertisement 61 90 56.25 60 51.66 Branded content: (Please rate each) a. Content created by the brand for the publisher 60.45 40 63.75 90 50
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c. The tone of the creative within an advertisement 45 35 47.75 45 50 d. Typically deals with content on the publishers website, not the brand website. 66 75 79.75 60 46.66
Sponsored content, branded content, and advertorials don’t intend to mislead people into thinking they are not ads. Native ads are happy to confuse people 39.9 25 47.25 35 45 Branded, sponsored and advertorial content is content commissioned by an advertiser to alight to their campaign objectives 64.5 45 73.75 60 70 Sponsored content, branded content and advertorials are far more flexible and accommodating in terms of brand mentions 52 35 60 55 50 I like to view it on a scale, starting with advertorial > sponsored content > branded content > native advertising, where the whole point of native is to make it as relevant as possible for both the audience AND the brand. 54.5 80 36.25 70 50
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