Social networks account for more than a third of referral traffic to websites. While these platforms would love to say it’s the power of social media and sharing, one can’t ignore the billions of dollars content publishers are spending to put their content in front of the people most likely to read and share it. What’s curious is that one would think sponsored content wouldn’t work as people generally don’t like ads. A new study from Reuters examined this dichotomy and found why consumers hate sponsored content but use it anyway.
According to Reuters’ ‘Digital News Report’, which investigates attitudes towards advertising, there is a growing consumer antagonism to heavy-handed advertising on websites. The research is based on data from YouGov. The found that “fewer people are clicking on banners, yields for publishers are static or falling, and many users shut off ads completely.” This creates an environment where the softer marketing tactic required for social media marketing works best (e.g. Facebook’s 20 percent rule regarding promoted images means no traditional banner ads).
Brands and content publisher’s use social media for a variety of reasons. Besides the effectiveness of social media as platform for content distribution, social media allows marketers to reach people in a more natural way.
According to the study, 47 percent of internet users in the U.S. and 39 percent of users in the U.K. use ad blocking technology, with the percentage being higher among younger users. One focus group participant said that “advertising and the interruption it causes to their reading experience”, with one focus group participant saying “online ads are obtrusive, obnoxious, annoying”.
Not only do many consumers find ads annoying, they may also find them ineffective. A more than a third (39%) of Internet users in the U.K. and nearly a third (30%) in the U.S. say they ignore ads entirely. There is a warning for website owners in the data that over monetizing your content can lead to lost traffic. One in two in the U.S. users and 31 percent in the U.K.said they actively avoid sites where ads interfere with their experience.
Besides promoted content, native advertising is growing in popularity among some websites. The Reuters team noted how BuzzFeed had moved away from banners and were using content to create viral moments for their advertisers. For example, an article about 10 ways to use tequila was paid for by a tequila brand. This is similar to the advertorials used by newspapers in the real estate or car sections.
For another example, The New York Times published a 1500 word native ad for the Netflix series Orange is the New Black, using video, charts, and audio to supplement text about female incarceration in the US.
This is also why popular bloggers and YouTubbers also get free products from brands who want them to review them favorably. This kind of advertising can have a higher return because it doesn’t feel like an ad. Consumers are therefore more likely to spend more time with the content and share it with their friends.
However, many consumers aren’t happy. More than a third of U.K. and U.S. consumers surveyed by the researchers said they were disappointed, or felt deceived, after reading an article they later discovered was sponsored. And overall, half said they dislike sponsored content and for a quarter sponsored content reflects badly on the news publisher.
“It is clear that consumers want to see clear labeling and signposting of paid-for content,” says Reuters in their report on the YouGov research. “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 standardized across news sites as much as possible.”
It should be noted that the FTC has recently made statements that show their concern with native advertising. They say content publishers are required to disclose any arrangement where the content is paid for. This means the bloggers mentioned above would need to tell readers and viewers that they were given the item they’re reviewing for free. This won’t hurt readership or viewership too much when revealed beforehand and lets people know that the person might have felt differently about the product had they paid full price like everyone else will. This applies for article stubs on the site as well. That’s why many articles may say sponsored even though they’re from major news sources.
Using promoted content can be good for brands and content publishers, both seeking to increase revenue, but it’s important to keep consumers in mind. It’s clear that native ads can work, but it’s also clear that consumers want transparency. Few people like watching ads, but even fewer like being tricked into watching ads.