This year’s Reuters Institute Digital News Report includes detailed research in the US and UK into consumer attitudes to sponsored and branded news content. Here, lead author Nic Newman and Shaun Austin, Director of Media Research at YouGov outline what they found.
Traditional display advertising on the web is in trouble. Fewer people are clicking on banners, yields for publishers are static or falling, and many users shut off ads completely. Our research shows that in both the US and UK between a third and a half of online news users use software that blocks the most popular forms of display advertising.
Against this background it is not surprising that content providers, brands, and platforms are looking for new and better ways to reach and engage audiences.
Budgets are switching to so-called ‘native’ advertising where brand messages look more like regular content – sitting in the same templates and using the same formats that might be used for a standard piece of journalism or a user-generated post on social media.
New media platforms like BuzzFeed and Vice have turned their back on display and already make the majority of their money from native advertising formats. They have set up digital commercial teams to develop ‘viral moments’ for brands – articles, lists, infographics, videos, or full-blown web documentaries.
Over the past year, traditional publishers have been trying to learn from this approach and have set up their own digital studios to do something similar.
The New York Times (T Brand Studio), the Guardian (Guardian Labs), and the Wall Street Journal have invested heavily – in a tacit endorsement of the emerging but often controversial practice.
Examples of branded or sponsored content shown to consumers
As part of the Digital News Report 2015, for the first time, we included questions relating to native advertising in the survey for both USA and UK. We followed this up with online focus groups in the same markets to explore attitudes in further detail.
What we found was a clear message -many consumers are losing patience with traditional forms of online advertising and there seems to be a close relationship between the amount of interruption caused and the vitriol consumers feel towards it.
Around three in ten respondents in both the USA (29%) and UK (31%) say they find traditional banner advertising distracting and will actively avoid sites where they interfere with the content too much (see chart below).
Consumers’ annoyance with advertising and the interruption it causes to their reading experience has led large numbers of them to install ad-blocking software to minimise its impact. In the UK, 39% have installed ad-blocking software on their PC, mobile, or tablet, whereas in the US this rises to 47%. The figures are even higher for 18–24s (56% and 55% respectively)
Awareness of sponsored content
After respondents in the quantitative survey were shown a number of native advertising articles, a relatively high proportion reported having come across this type of content before. In the US, over one in three (35%) said they frequently or often see sponsored content, compared to around a fifth (21%) in the UK. But amongst those who had been exposed a third (33%) of our UK sample said they felt disappointed or deceived when they later found out content was sponsored by a brand or company, a level that rises to more than four in ten (43%) in the US. The higher figure in the US could be down to the fact that native advertising is more prevalent there.
Readers of online news sites care deeply about trust, truth, and accuracy, which is why strong emotions are roused when they feel they are being ‘deceived’ by advertising masquerading as content.
“I just noticed the Netflix [on the New York Times article] and didn’t notice the Paid Post thing until later! That is why these types of ads really irritate me” – Trent, US
“Gawker ran an article on the history of inflight entertainment and two thirds of the way through every single example was from Emirates. Only at the very end could you find the disclaimer – sponsored by Emirates ” – Tanya UK
There are stark differences by age, with younger respondents considerably less likely to feel they are being ‘deceived’ by native content. This is likely to be down to a number of factors. First, they have grown up in a commercial world, with brands firmly ingrained in their lives. Secondly, they are more likely to visit sites such as BuzzFeed, which are considered to be more about ‘fun news’ and therefore a more natural environment for sponsored content. Native advertising is more established and more prevalent on these sorts of sites.
We also found a great deal of inconsistency in the labelling of sponsored content across different news sites, to the extent that frequently readers aren’t aware of what they are looking at before they start reading an article. ‘Paid for’, ‘Sponsored by’, ‘Promoted’ are words used to signpost native advertising content, with some meaning one thing on some sites and another on a different site.
The type of content influences perceptions
Consumers expect different things from different types of sites and native advertising needs to be aware of these boundaries. Many in our focus groups felt that there are some content areas – such as home and world news, politics, and financial news – that should be considered sacred and free from native advertising. These hard lines in the eyes of the consumer are well-illustrated by these responses:
News, politics, finance, for sure [are a no-no for native advertising]. Those are the topics you don’t want people messing with for profit. (Helena, 36, UK, spent around 1.30 minutes reading Netflix/New York Times native advertising)
The news press are there also to hold politicians, business and other interest groups to account. If any of them are seen to be influenced by them then they will suffer i.e. HSBC. (Alan, 31, UK, has visited the Guardian Cities site three times over the last year, and spent around 9 minutes on the site)
I don’t want to see coverage of human rights in Papua brought to me by the companies who make soap out of palm oil. (Tanya, 51, UK)
Respondents tell us that, should the brands start introducing native advertising to the more serious news content areas, it would have a damaging impact on their perceptions of the news organisation.
On the other hand, less ‘serious’ areas of news, such as entertainment, lifestyle, fashion, travel, and motoring, are deemed to be more suitable environments for native advertising. This could be due to the fact that brands are already an important part of the landscape in these areas and therefore respondents are more open to hearing from them on these subjects. They also feel that their decisions in these areas may have little long-term impact.
Lying or deceiving me about these topics will have no lasting effects on my life. (Jenn F, 32, US)
I think the rule of thumb should be – if the industry is already reliant on advertising (movies, lifestyle, sports, etc.) then it’s OK. But not news and politics. That’s not commercial – or it shouldn’t be. (Helena, 36, UK)
I wouldn’t care who wrote it if it was informative and interesting. I would only be annoyed if I read a story and realised it was advertising half way through. (Eleanor, 32, UK, spent time reading Daily Mail/Now TV’s ‘The Warrior Plan: 8 ways to get a body like a Game of Thrones hotty’)
Does it hurt news brands or advertisers?
In general, the majority of news audiences say that sponsored content has neither a positive nor negative impact on either the brand in question or the news organisation that carries the content. Around a fifth (22% in US and 21% in UK) say that they have a less positive view of the brand paying for an advert. However, the impact on the news organisation that carries the ad is more negative, with 28% of UK and US respondents having a less positive view of the news brand.
Younger consumers are more open to native advertising on news brands. Almost a fifth (19%) of 18–24 year olds and 15% of 25–34 year olds in the US say they feel more positive towards the brand. In the UK, 13% of 18–24 year olds say they feel more positive towards the brand, a figure that falls to 11% amongst 25–34 year olds.
One notable example that failed to engage with UK consumers was a content partnership between Unilever and the Guardian. Readers immediately picked up that it had a different tone to the content they would normally expect to see in the Guardian and described the content as bland. This example highlights the need for content to reflect a site’s editorial style and tone in order for readers to find the content engaging and credible. This flags up an interesting paradox. Readers appear to be more engaged with content that replicates the style and tone of the news brand, but as a result, are more likely to feel misled and deceived by the news brand.
While news brands have much to gain from this new form of online advertising, the danger of further blurring of the line between advertising and editorial could harm the credibility of news brands, with little lasting impact on advertisers. Consumer attitudes show that, when it comes to native advertising, the stakes are far higher for news brands than for advertisers.
Is the content itself interesting?
Relatively few people say that sponsored content is an interesting way to hear about topics and subjects that are relevant to them. In the UK just 14% like getting information in this way, a figure that increases to over one in five (22%) in the US. It is younger consumers who are more likely to find native advertising content more interesting, although, as mentioned earlier, older respondents are less likely to visit the sites where sponsored content is more prevalent, such as BuzzFeed.
Broadly speaking, there are two types of sponsored content that we found to be of interest to respondents. The first is something practical and/or useful, but potentially more fun (such as the type of content found on BuzzFeed). The second is something that is more serious in nature, is informative, and where there is a clear link between the content and the brand (for example, the types of thing you might find in an online version of a broadsheet newspaper).
It is clear that consumers want to see clear labelling and signposting of paid-for content. Readers don’t like to feel they are being deceived; however, if they know up-front that a brand may have influenced the content, consumers are more accepting. To help maintain levels of trust, the language used should be standardised across news sites as much as possible.
Sponsored content has great potential for brands to reach audiences, particularly younger consumers. But whoever brands are trying to reach, the content has to be of value to the audience to have an impact. The content also needs to be a natural fit for the publication – anything that jars with a consumer’s perception of what should be on a site may be dismissed by readers. If these principles can be followed, then sponsored content has a chance of being embraced by online audiences, allowing brands to overcome some of the issues that readers currently have with online advertising.
Juliet Tate contributed additional research to this essay.