University of Groningen Native Advertising: Effective, Deceptive, or Both? Harms, Bianca

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University of Groningen

Native Advertising: Effective, Deceptive, or Both?

Harms, Bianca

DOI:

10.33612/diss.162005726

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Publication date: 2021

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Harms, B. (2021). Native Advertising: Effective, Deceptive, or Both?. University of Groningen, SOM research school. https://doi.org/10.33612/diss.162005726

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⎪Chapter 5 88

5.1 Introduction

Native advertising, an embedded advertising form that “takes the form and appearance of editorial content from the publisher” (Wojdynski & Evans, 2016, p. 157), has rapidly gained ground at the expense of traditional advertising formats. Virtually all news and entertainment platforms offer native advertising options for advertisers, and marketing practitioners assign an increasing portion of their advertising budgets to native advertising. However, is native advertising effective, deceptive, or both? This type of advertising seems to provide benefits for brands, publishers and consumers. It is believed to create more valuable content to consumers compared with traditional advertising formats and, as a result, to engender more positive brand effects (Van Reijmersdal et al., 2009; Wojdynski & Golan, 2016), thus creating alternative advertising income for publishing platforms (Probst et al., 2013). However, native advertising is considered a double-edged sword; it is also perceived as a deceptive advertising form because the integration between commercial and editorial content makes it difficult for consumers to recognize and understand its persuasive intent (Campbell & Evans, 2018). This so-called persuasion knowledge, or advertising literacy, is a precondition for the activation of a defense mechanism that helps consumers critically evaluate and respond to the advertising content (Wojdynski & Evans, 2016).

Although a native advertising research stream has evolved over the past years, the factors that influence how consumers process this type of advertising and its effectiveness have been underresearched (Wojdynski & Evans, 2016). Furthermore, the many manifestations of native advertising and the variety of possible contexts complicate the generalization of research findings for a specific native advertising type over other types of native advertising. Therefore, the overall aim of this dissertation is to provide additional insights into the effectiveness of native advertising and gain more understanding of the underlying consumer processes. Specifically, this dissertation addresses the following central research question:

To what extent do context and content factors influence the effectiveness of native advertising and the underlying processes of consumers’ persuasion?

This research sheds light on theoretically founded context and content factors that may affect native advertising effectiveness from the perspective of practitioners who are experienced in the field of native advertising (Chapter 2). In addition, it creates understanding of how article-style native advertising (Chapter 3) and sponsored vlogs (Chapter 4) affect (aspects of) consumers’ persuasion knowledge and how this subsequently influences consumer responses to the advertisements.

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The next section provides a summary of the findings and theoretical implications presented in the previous chapters. This overview is followed by a general discussion of the practical implications and suggestions for future research.

5.2 Summary and discussion of the dissertation projects 5.2.1 Chapter 2

Using 22 in-depth expert interviews with senior executives from brands, publishing companies and media agencies, Chapter 2 provides insights into the effectiveness of native advertising. It contributes by delineating content and context factors that influence native advertising’s effectiveness and by clarifying this effectiveness in terms of both intermediate and behavioral effects. Most importantly, the findings emphasize the multiple relevant aspects of native advertising that require further scientific research, summarized in 10 key propositions that reflect practitioners’ perspectives.

A literature review identifies brand prominence and message appeal type (informational or emotional; Holbrook and Batra 1987) as important content factors that potentially influence native advertising’s effectiveness. The findings show that the optimal degree of brand prominence in native advertisements is difficult to determine. Although brand prominence is a necessary precondition for native content to create brand effects, prominent branding in advertisements might also lead to more negative consumer evaluations (Van Reijmersdal, 2009). Allaying public and policy maker concern about native content as a deceptive advertising tactic (Wojdynski & Evans, 2016), the results show that practitioners support explicit brand prominence in their native advertisements. They noted that the main reason to explicitly communicate the content’s commercial origin is not the motivation to avoid consumer feelings of perceived deceptiveness but rather the conviction that well-designed native advertising adds value for the audience, which in turn will lead to positive evaluations and thus effectiveness. However, although practitioners value transparency in their native advertisements, they could not specify an ideal level of brand prominence for native advertising. In general, practitioners advise an emotional message appeal in native advertising for communication with consumers early in their customer journey, whereas an informational message appeal is assumed to be more effective just before conversion takes place. Practitioners noted, however, that the effectiveness of appeal type is strongly moderated by product type and consumer characteristics, which confirms prior research (Johar & Sirgy, 1991).

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90 ⎪Chapter 5

Furthermore, practitioners confirmed that forward spillover effects from the advertising context, as identified in offline advertising contexts (De Pelsmacker et al., 2002; Van Reijmersdal et al., 2005), also hold for native advertising. However, for native advertising, the advertising context is not limited to the surrounding editorial content but also includes the publisher’s brand and the device type. Although many newspapers, including respectable titles such as The Wall Street Journal and The New York Times host native advertising content, the practitioners indicated that native advertising is less suitable for news platforms, as these outlets are expected to publish objective content. Hence, news brands could experience a decline of perceived credibility if they publish native content.

Practitioners expected to assign increasing budgets to native advertising to achieve brand effects such as attitude change and to create consumer interaction. However, concrete evidence about the relation between these measures and the actual return on the brand’s investments in digital native advertising is still lacking.

5.2.2 Chapter 3

Chapter 3 provides contemporary insights into the consumer perceptions of two heavily applied advertising formats on media platforms: banner advertising and article-style advertising. More specifically, Chapter 3 investigates consumer perceptions of article-style native advertisements and banner advertisements in terms of understanding the message intent, ad attitudes and ad credibility. In addition, it examines the interrelationships of these constructs and their effects on the brand.

For this study, data were retrieved from 303 respondents of a consumer panel in an online experiment and analyzed with partial least squares path modeling. To ensure external validity, the online experimental study implemented existing advertisements from six brands that focused on the target group “educated men between 20 and 40 years of age.” This target group matches the demographic characteristics of the participants of the panel.

This study shows that banners perform significantly better than article-style native advertisements, in terms of understanding of the message intent, attitude toward the advertisement and advertisement credibility. In line with previous findings from Tutaj & Van Reijmersdal (2012), the results demonstrate that the understanding of the message intent is stronger for banners than for article-style native advertisements. An explanation for this finding lies in the stronger prominence of the brand in banners, which makes them easier to recognize as advertisements.

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A striking result in the study is that, contrary to prior research (Tutaj & Van Reijmersdal, 2012), consumers actually evaluate banners more positively than article-style native ads, in terms of attitude and credibility. The characteristics of the research population may have caused these outcomes: more educated men between 20 and 40 years of age are expected to have more experience with online advertising formats and may therefore respond differently to persuasive attempts. Building on the Heuristic Systematic Model (Darke & Ritchie, 2007), the study concludes that consumers protect themselves more and place more value on transparent advertising content due to the increasing exposure to native advertising and the negative publicity around this advertising tactic. Furthermore, in line with persuasion knowledge theory (Friestad & Wright, 1994), which posits that consumers’ persuasion knowledge develops over time, consumers are increasingly aware of article-style native advertisements. Coupled with stricter regulations on transparent sponsorship disclosures, this activates consumers’ defense mechanisms and results in increasingly negative perceptions of the advertiser and/or the brand (Boerman et al., 2014).

Chapter 3 confirms previous studies that show that brand effects emerge indirectly through ad attitude (e.g., Biehal et al., 1992), ad credibility (e.g., Van Reijmersdal et al., 2005) and understanding of message intent (e.g., Boerman et al., 2012), of which ad attitude has the strongest mediating effect. Both ad attitude and ad credibility explain, at least partly, how understanding the message intent might lead to brand effects: a better understanding of the intent of an advertisement leads to stronger behavioral outcomes.

5.2.3 Chapter 4

Chapter 4 provides new empirical insights into two pivotal antecedents of cognitive advertising literacy (CAL): sponsorship disclosure (written and/or spoken) and parental mediation style (active or restrictive) of viewers between 8 and 16 years of age in the context of sponsorship collaborations in vlogs. Data were retrieved from 609 parent–daughter dyads from a consumer panel in an online experiment (between-subjects, single-factor test of three experimental conditions and a control condition) in which the children watched a vlogger video. Variance-based partial least squares structural equation modeling in Smart-PLS 3.0 shows that, although sponsored vlogs currently contain sponsorship disclosure in a single modality, only a combination of written and spoken disclosure information increase a young audience’s CAL. Additional investigation of the effects of disclosure types on the two measured aspects of CAL provides further insight: advertising memory and understanding of advertising shows that dual-modality sponsorship disclosure increases advertising memory. This indicates that, in line with

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92 ⎪Chapter 5

dual-channel theory (Mayer, 2018), a combination of written and spoken information leads to better processing and consequently more cognitive memory effects.

Furthermore, Chapter 4 provides understanding for parents and caregivers about the effectiveness of their advertising mediation strategies by showing that active parental mediation increases children’s CAL in the context of sponsored vlogs. This contradicts Hudders et al.’s (2018) prior findings but confirms earlier research showing that parents can make an important contribution in increasing their children’s CAL through interaction and explanation of the nature of sponsored vlogs (e.g., Buijzen et al., 2019). Contrary to expectations, the results show that restrictive parental mediation negatively affects young viewers’ CAL. Building on Sasson and Mesch’s (2014) study, which shows that restrictive measures could increase potential negative effects of advertising, Chapter 4 results show that restrictive parental mediation could indeed lead to opposite effects:. when rules and restrictions are placed on children, in their search for autonomy, they could be motivated to find ways to resist against and bypass these restrictions (Sasson & Mesch, 2014). The lack of knowledge about the persuasive intent of sponsored vlogs and how to recognize it could therefore lead to lower CAL. Although we found that active parental mediation directly affects young viewers’ CAL, neither parental mediation style influenced the effect of sponsorship disclosure information on young audiences’ CAL.

Chapter 4 confirms prior research in the context of native advertising, which shows that the activation of young audiences’ CAL does not affect their perception of the vlog (e.g., Van Reijmersdal et al., 2012). Also, in line with Van Reijmersdal et al. (2020), it shows that the change of meaning principle (Friestad & Wright, 1994) applies to this research context in that vloggers are evaluated as less trustworthy when they engage in commercial brand collaborations, and these perceptions spill over to both the video and the promoted brand. Contrary to other studies that show a mitigating effect of advertising literacy on the promoted brand (e.g., Hudders et al., 2017), in the context of this research CAL positively affects the sponsored brand. An explanation for these findings may be that one aspect of viewers’ CAL is increased advertising memory. Although we expected that sponsorship disclosures would have a lower effect on younger children’s CAL and parental mediation would have a stronger effect on younger children’s CAL, we found no proof for these moderating effects.

The results shed light on the effects of sponsorship disclosure modalities and parental intervention on young viewers’ persuasion knowledge and contributes to the ethical and legal debate about the potential deceptiveness of sponsored vlogs aimed at this vulnerable target group.

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5.3 Practical implications

The results of this dissertation provide important practical implications. They refine the understanding of the effectiveness of native content as an advertising tactic and of the circumstances under which native content is deceptive and/or effective. This dissertation shows that consumer responses to native content are subject to various contextual, content and consumer factors. The results deliver relevant insights to advertising practitioners, such as advertisers and agencies, and provide input for more ethical and effective influencer marketing strategies. Furthermore, the findings are of importance for native content publishers, policy makers, parents and caregivers.

5.3.1 What makes native advertising effective?

Currently, advertisers view native advertising as an effective tool for creating effects that are increasingly difficult to achieve with other types of advertising, due to consumers’ changing and complex media behavior. In particular, practitioners endorse the strong, positive, intermediate effects of native advertising in terms of attitude change and brand awareness, which is in line with prior academic findings (Becker-Olsen, 2003; Tutaj & Van Reijmersdal, 2012). Although practitioners value native advertising for its effectiveness, concrete evidence about actual return on the brand’s investments in native advertising is often lacking since practitioners focus on measuring behavioral effects such as click-through rates but largely ignore examining engagement metrics or conducting attitudinal studies. This dissertation shows that the effectiveness of native advertising is dependent on consumer, content and context factors that practitioners should take into consideration when planning to engage in native advertising.

First, various consumer factors influence the effectiveness of native advertising. Although native advertising is often thought to be valued more highly than traditional forms of advertising, this does not hold for all target audiences. Increasing exposure to native advertising for some consumer groups has led to a high level of persuasion knowledge, which results in different responses to and more negative perceptions of this form of advertising. Therefore, practitioners should be careful when they plan to include native advertising in their marketing campaigns. Furthermore, in some circumstances, consumer demographics such as age, gender and education can influence the effects of native advertising, which can lead to unexpected results. Hence, pretesting native ad campaigns and developing tailored content for specific target audiences is advised.

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94 ⎪Chapter 5

Second, consumer perceptions of native advertising content are of vital importance. Advertisers engage in native advertising to leverage positive spillover effects from audiences who appreciate the editorial content (Wojdynski & Golan, 2016). This dissertation confirms that the attitude toward the advertisement has a strong effect on the brand in article-style native advertising and vlogger videos; when the viewer positively evaluates the advertisement, it increases the effect on the sponsored brand. Thus, practitioners should invest in developing high-quality native advertising content. Next to brand prominence, message appeal type (emotional or informational) is identified as a content factor that affects native advertising effectiveness. Although this effectiveness also depends on the type of product or service and target audience characteristics, practitioners experience that in general, the stage of the customer journey is a good indicator for which appeal type to use in native advertising. A more emotional appeal type is preferred for consumer communication in early stages of the customer journey, whereas an informational appeal is more effective shortly before conversion takes place.

Finally, in addition to the native advertising content itself, selecting an advertising context with a good fit between the advertised brand and the hosting platform is a key determinant for native advertising effectiveness. Practitioners should choose relevant advertising contexts and make sure that the native content matches the regular editorial content of the platform to create advertising value and avoid consumers’ perceptions of advertising intrusiveness. Chapter 4 confirms the importance of choosing the right advertising context in brand–vlogger collaborations. Therefore, brands need to select vloggers who are highly appreciated by their target audiences, as the audience evaluation of the vloggers spills over to the promoted brand.

5.3.2 How to avoid deceptiveness of native advertising

To avoid spreading potentially deceptive advertising content, it is critical for practitioners to consider the prominence of the advertised brand or how the brand collaboration is disclosed. Practitioners believe that they are transparent in their native advertising activities, and they value transparency to avoid deceptiveness and create value for their audiences. However, the ideal level of transparency in native advertising is difficult to determine, because various factors influence how native advertising content can activate (aspects of) persuasion knowledge. Although in previous research, brand prominence was found to prompt negative consumer responses (e.g., Van Reijmersdal et al., 2016), this dissertation confirms the importance of sponsorship transparency in native content—not only from an ethical point of

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view, but also considering that in some circumstances, it can be more effective. For instance, transparency of the nature and intent of the content is essential for some target groups (e.g., more educated men viewing article-style native ads) in order to avoid negative spillover effects. Proper disclosure of brand collaboration is particularly important to protect more vulnerable target groups, such as children. Children often lack understanding and comprehension of advertising because their cognitive and information processing skills have not been fully developed yet, which makes them more susceptible to persuasive attempts (Verhellen et al., 2014). Only a combination of spoken and written disclosure information in sponsored vlogs increases young viewers’ CAL. Hence, from an ethical perspective, practitioners should ensure dual-modality sponsorship disclosure information in their sponsored vlogs to protect their younger target groups. Although vloggers may be reluctant to integrate dual modality of sponsorship disclosure information because it may evoke negative audience perceptions, we strongly advise advertisers to take on an active role in encouraging their influencers to do so.

The effectiveness of dual-modality sponsorship disclosure in activating young viewers’ CAL in the context of sponsored vlogs also provides important implications for policy makers and regulators. Although organizations such as the Federal Trade Commission and self-regulative provisions in the European Union have issued some guidance about sponsorship disclosure in native advertising, we encourage them to develop more explicit guidelines. More specifically, we urge that they prescribe including dual-modality sponsorship information in sponsored vlogs, as it is vital to protect younger viewers.

Parents have an important role in children’s exposure to advertising and in shaping their conceptions about media and consumption (e.g., Mikeska et al., 2017). Therefore, in addition to practitioners and regulators, parents are an important factor in developing their children’s CAL (Buijzen & Valkenburg, 2013). Policy makers and organizations such as parental support organizations, schools or health centers should provide parents with information about how to interact effectively about advertising in sponsored vlogs to explain the nature and intent of its content, because doing so increases their children’s advertising literacy in the context of sponsored vlogs. Furthermore, if parents want to increase their children’s CAL, they should choose active instead of restrictive mediation measures. Thus, for example, rather than limit their children’s iPad time, although this might be easy to demand, parents should sit down with their children and watch sponsored videos together while discussing the nature of the content. For practitioners, transparent disclosure of the nature and intent of their native content is not solely an ethical responsibility; it can also lead to more effective advertising. In the

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96 ⎪Chapter 5

context of article-style native advertising, consumers’ understanding of the message intent leads to stronger behavioral outcomes. This effect is also noted for sponsored vlogs; young viewers’ CAL positively affects the attitude toward the sponsored brand. In addition, the attitude toward the sponsored vlog is not negatively affected by the viewers’ CAL.

5.4 Future research

5.4.1 Future research on effectiveness of native advertising

Native advertising effectiveness is dependent on many factors, and it manifests in a wide variety of ways; therefore, one should cautious in generalizing findings. Hence, further research is necessary to increase understanding of the circumstances under which native advertising is effective. The findings from the qualitative study in Chapter 2 result in ten propositions that together form an agenda for quantitative research on the content and context factors that influence native advertising effectiveness. Although this dissertation investigates some of the propositions mentioned there (i.e., Propositions 1, 2 and 9), a number of questions remain, of which three are identified as most urgent.

First, further investigation of the effects of brand prominence in relation with sponsorship disclosures is encouraged. The positive brand effects found in Chapter 4 could be related to the high prominence of the product and brand in the vlogs in this research. This high brand prominence is common in vlogs such as makeup tutorials. Future research should investigate brand effects in sponsored vlogs with lower brand prominence, such as lifestyle vlogs.

Second, message appeal is identified as an important factor in native advertising effectiveness. Prior mixed results on the effect of appeal type on online engagement measures (Ashley & Tuten, 2015; Berger & Milkman, 2012; Golan & Zaidner, 2008) indicate the need for more consumer-based research into the effects of different message appeals in native content—especially studies on how the effects of message appeal type are influenced by the stage in the customer journey, target audience and brand and/or product type.

Third, three propositions (i.e., 5, 6 and 8) refer to the effectiveness of native advertising in specific contexts. However, the playing field of native advertising is still increasing with the rise of new technologies and platforms. This requires ongoing investigation of the effectiveness of native advertising in these new contexts. For instance, storytelling through short-form videos has gained popularity, especially among younger audiences, who are increasingly watching these types of videos on relatively new platforms such as TikTok (Munro, 2019). In line with

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this development, advertisers are increasingly using short-form native videos on these platforms. Furthermore, additional research should not only explore the effectiveness of other types of native advertising compared with other types of advertising formats, but also include the effects of native advertising within an integrated marketing communication campaign. Within marketing research, much attention has been paid to integrated marketing communication (e.g., Payne et al., 2017; Zenetti et al., 2014) In general, native advertising is part of a larger campaign that consists of multiple on- and offline marketing communication activities. Hence, consumers do not view native advertising in isolation. Therefore, investigation of interaction effects between native advertising and other advertising formats within a campaign is encouraged. A new development is the rise of Connected TV (CTV) (IAB, 2019), which refers to TV and other internet-connected devices (e.g. set-top boxes, game consoles, smart TVs) that host video content, including content outside cable providers’ offerings. Therefore, video advertising through CTV reaches multiple platforms and enables the retargeting of audiences who saw CTV advertisements with other advertisements on their devices. Research on the effects of native advertising in the context of these multiplatform retargeting campaigns as part of integrated marketing communication strategies is therefore advised.

5.4.2 Future research on deceptiveness of native advertising

Because the potential deceptiveness of native advertising stems from its integration with editorial content, sponsorship disclosure should remain a topic of academic attention. Although practitioners are convinced that their native advertisements are transparent about its source, they have difficulty pinpointing an optimal level of brand prominence or sponsorship disclosure in native advertising. Therefore, future research should address the degree of brand prominence and/or sponsorship disclosure in native advertising. In particular, further investigation of native content with different levels of brand prominence due to its nature in combination with sponsorship disclosure types is advised.

Dual-modality sponsorship disclosure appears to activate advertising literacy among girls between the ages of 8 and 16 years. However, it is not yet known whether this is also true for boys. The different cognitive styles of men and women (Papyrina, 2015) suggests that gender differences may play a role, which indicates the need for additional research that includes gender as a potential moderator. Also, the changing media landscape and consumer behavior require further study of the effects of disclosure types and parental mediation in other

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98 ⎪Chapter 5

contexts (e.g., various advertising formats, vlogs, brands, products,) for the following three reasons.

First, Chapter 4 shows, contrary to prior research from De Jans and Hudders (2020), no significant difference in the means between the conditions with regard to one aspect of cognitive advertising literacy (understanding of advertising). This could imply that young viewers assume that the vlogs have a persuasive intent even without sponsorship disclosure information. Because of parental and regulative concerns about the potential deceptiveness of sponsored vlogs for children, future research should address young viewers’ understanding of advertising and its effects for different native advertising formats and disclosure types.

Second, various content factors (e.g., ad format, brand and product type) could have influenced the findings presented in this dissertation. Research into the potential deceptiveness that uses other experimental conditions could therefore lead to different results. Furthermore, the native advertisements in this research contain wording for the sponsorship disclosure as recommended by self-regulative organizations in the Netherlands. However, the wording of sponsorship disclosure text affects consumer processing (Wojdynski & Evans, 2016). Also, the vlogger we used for the research in Chapter 4 is unknown, and prior research shows that the perceived relation between viewers and vloggers can affect disclosure information effectiveness (Boerman & Van Reijmersdal, 2019). Therefore, additional examination of the influence of the perceived relation with influencers in the effects of disclosure types and parental mediation on children’s advertising literacy in other types of native advertising including different brands/products and disclosure wording is advised.

Third, unlike prior findings (e.g. Buijzen, 2014), the studies described herein show no evidence for a moderating effect of young viewers’ age in the relation between disclosure types on CAL. This result was unexpected, considering that persuasion knowledge is likely to increase with age. Nowadays, children grow up with online media and engage in online activities such as gaming and watching vlogs from a very young age. As a consequence, embedded advertising formats such as native content are a structural part of their lives. Future studies should address how this experience impacts the development of people’s CAL throughout their childhood into adulthood with regard to the processing of potential deceptive advertising. In particular, breadth and depth of experience with native advertising formats are expected to influence consumer processing and perceptions of native advertising. Hence, further studies on the effectiveness of native advertising should include the influence of audiences’ prior experience with native advertisement formats on persuasion knowledge and consumer perceptions. Moreover, it is important to investigate the role of parents as

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socialization agents for their children as part of this process, as this dissertation shows that parental measures found to be effective in protecting children from negative advertising in the past can now lead to opposite effects.

5.5 Concluding remarks

Brands use native content in their campaigns to create positive attitudinal and behavioral effects by providing consumers with a similar experience as with editorial content that is normally consumed in the advertising context. This dissertation shows that native advertising can be effective in creating brand effects. It also challenges prior research in that native content is not always valued more positively than traditional digital advertisements and shows that consumer demographics can influence native content effectiveness.

Native content can be deceptive when the commercial intention is not transparent. This dissertation shows that sponsorship should be disclosed in dual modality to activate young viewers’ defense mechanisms, which can protect them from the negative effects of advertising. Is native advertising effective, deceptive, or both? This is a challenging question, and this dissertation shows that the answer is that it can be both. Native advertising can create positive brand effects but is less likely to be identified as advertising content than traditional advertising formats.

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