Looking at Native Ads Through Rose-Colored Glasses May Be Costly

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ADOTAS — Native advertising is one of the biggest trends in digital advertising, and it is growing in popularity and in terms of overall spending. A recent survey by eMarketer shows that native advertising spending accounted for $1.63 billion in 2012 and is estimated to rise by more than $1 billion in 2013 to top off at $2.85 billion.

For advertisers and publishers alike, native ads look like a win-win. Because native advertising is so relevant to the surrounding content and the consumer’s immediate activity, it can be both useful to the consumer and effective for the advertiser.

However, in spite of the euphoria, it’s important for publishers and advertisers to contemplate the possible negative ramifications of these ads and to weigh the trade offs of doing more native advertising at the expense of more traditional display ads.

For publishers, recognizing that there may be diminishing returns associated with the ad units over the long term is crucial. Tier 1 and Tier 2 publishers should be cognizant that as more space is taken up with ads in the guise of content, journalistic credibility may come into question. In fact, a majority of Americans believe that advertising appearing as content can be confusing.

A study by MediaBrix last November showed that nearly two-thirds of U.S. Internet users found advertorials misleading while 86% found sponsored video ads that appeared to as content misleading. If consumers perceive that advertorials have little redeeming or engaging content, they may flee from sites that carry them and not return. This could be damaging to publishers who rely on traffic for revenue, and downright dangerous to publishers who charge subscription fees to access their sites.

For advertisers and brand marketers, using native ads could be precarious for precisely the same reason. Certainly, a wariness against tarnishing a brand’s reputation by misleading consumers should be especially high among the brands that value premium sites like news and information destinations. Annoying or misleading consumers is not a solid business strategy for winning customers or your brand’s reputation. Therefore, it’s vitally important that native ads are appropriately sourced and their advertorial nature clearly communicated. Native ads that displace content must live up to the expectations consumers have for editorial and other site content. In practice, however, many native ad units are typically large or very loud ads that don’t make a solid effort to come across as worthwhile content, or put forth topics that are interesting, intriguing and engaging.

Simply put, making sure your next native ad campaign is identified as such will go a long way toward underscoring the legitimacy of the content with the reader. Making sure consumers see advertising that is both relevant and honest is vital to building trust and preference. For the good of both advertisers and publishers, that in-depth advertorial on the joys of redecorating and the great new shades of self-priming paint available at the local home decorating supply outlet needs to be transparent and engaging.

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