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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Ads are baked into content, like chocolate chips baked into a cookie. Except it's actually more like raisins into a cookie..., because who really wants raisins in their cookie?

—John Oliver on native advertising, HBO Last Week Tonight (2014)

1.1Introduction

Native advertising is an embedded advertising form that “takes the form and appearance of editorial content from the publisher” (Wojdynski & Evans, 2016, p. 157). Marketing practitioners have increasingly made use of native advertising, considering it a way to create brand effects in today’s climate, which is characterized by consumers’ fragmented media behavior and advertising avoidance. In fact, in 2020 US advertisers are expected to spend $52.75 billion on native advertisements, a 20.2% growth compared with 2019 (Perrin, 2019). By distributing content tailored to consumers’ interests and needs, brands aim to create more meaningful relations and positive brand attitudes and beliefs, which in turn could activate behavioral responses such as increasing purchases (Becker-Olson, 2013).

Native advertising’s effectiveness is credited to its similarity with editorial content, because consumers are exposed to advertisements that match the content they were looking for on the hosting platform (Wojdynsky, 2016a). For instance, the collaboration of Adobe with The New York Times resulted in a long-form native article that provided valuable insights and statistics about shopping trends in a VR-centric future, leading to positive brand associations without pushing products. However, in practice one need not look far to find examples of native advertisements that did not lead to the anticipated results. How native advertising can go wrong is illustrated by the publication of a controversial sponsored article about the "milestone year" of the Church of Scientology at the landing page of the credible online magazine The Atlantic in 2013. This native advertisement generated so much negative responses that it was taken down, after which The Atlantic published a public apology.

Because native advertising is relatively new and comes in many forms in a dynamic digital environment, practitioners may experience difficulties in developing high-quality native content that achieves positive consumer responses (Mirkovic, 2020). Although some previous research suggests that native advertising is effective in positively affecting consumer perceptions (e.g., Tutaj & Van Reijmersdal, 2012), few studies address the factors that influence this effectiveness thus far (Wojdynski & Evans, 2016). Thus, critical knowledge about the circumstances under which native advertising is effective and how it differs from traditional online advertising formats is lacking. To fill this research gap, this dissertation identifies and tests context and content factors that may affect native content effectiveness.

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Native Advertising: Effective, Deceptive, or Both? | 13

Beyond questions about its effectiveness, the growth of native advertising has also led to concerns about its potential deceptiveness (Campbell & Evans, 2018). Critics refer to native content as “advertising in disguise” because the integration with editorial content might complicate consumers’ recognition and understanding of its persuasive intention. Consequently, consumers may experience difficulty in distinguishing advertising content from editorial content, and deception can occur (Wojdynski, 2016b). Consumers’ ability to recognize and understand the intent of advertising is referred to as “persuasion knowledge” or “cognitive advertising literacy” (De Jans et al., 2017; Friedstad & Wright, 1994), which is a focal concept in this dissertation.

This dissertation aims to extend current knowledge on the factors that affect consumers’ persuasion knowledge and on how the activation of this knowledge influences the attitude toward the advertisement and the sponsored brand in the context of native content. Thereby, this research adds knowledge about native advertising effectiveness and offers a better understanding of how the underlying persuasive processes affect advertising literacy and consumer responses.

1.2 The concept of native advertising

The term “native advertising” has emerged only recently in the vocabulary of marketing practitioners. In his keynote speech at the WOMMA Global Conference in New York in 2011, the American investor Fred Wilson referred to “native monetization systems” for web properties as new forms of online advertising (Walsh, 2011). Wilson illustrated his presentation with examples of advertisements that matched the look and feel of the hosting web environment. Practitioners adopted the term, and it evolved into the now widely used “native advertising.”

In the past decade, the native advertising landscape has matured and now offers a wide variety of digital advertising forms. Advertising content is considered native advertising when it matches the look and feel of the hosting platform and is tailored to the platforms’ existing target audience’s needs (Wojdynski, 2016a). Native advertising is divided into three categories: native content (unique content that resembles editorial content such as “Sponsored posts” on

The New York Times website), native hyperlinks (recommended native ads that are presented

as hyperlinks based on consumer data via widgets such as “Paid for content by Outbrain” on the CNN website) and native social media posts (advertising content that is integrated into the feed of a social media channel such as “Promoted tweets” on Twitter) (Wojdynski, 2016a). This

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dissertation addresses the first category: native content, which is considered a form of sponsored content.

Whereas sponsored content encompasses all advertisements that deliberately integrate brands, products or persuasive messages into editorial content (Van Reijmersdal, Neijens & Smit, 2007), native content refers only to brand–media collaborations in digital contexts (Campbell & Evans, 2018). With native content, “the advertisement itself offers some form of content that can be consumed alongside the publisher’s own content” (Wojdynski, 2016a, p.8). As a consequence, native content generally is uniquely designed for a one-time publication in a specific publishing environment. Examples of native content are sponsored blogs and vlogs, in-game advertising and article-style native advertisements. Although academics have paid considerable attention to the concept of embedded advertising in traditional media (for an overview, see Van Reijmersdal et al., 2009), the variety of native advertising forms and contexts makes it perilous to generalize these previous research findings, because different online advertising formats may lead to different consumer responses (Burns & Lutz, 2006) and require unique approaches to content, context and evaluation relative to traditional advertising (Truong et al., 2010).

1.3 Native advertising: effective, deceptive, or both?

Practitioners have largely embraced embedded advertising formats because they have proved to positively influence consumer memory, attitudes and behavior (Van Reijmersdal et al., 2009). In addition to the effects of the advertising content itself, with native content brands aim to create positive spillover effects from the advertising context (Wojdynski & Golan, 2016). Context factors refer to the characteristics of the media platform in which an advertisement is placed (De Pelsmacker et al., 2002). To date, content and context factors that influence the effectiveness of native advertising in its many forms have been underresearched (Wojdynski & Evans, 2016).

The critical differences between native content and editorial content are the prominence of the advertised brand and/or the presence of sponsorship disclosure information. Persuasion knowledge theory explains that consumers can activate a defense mechanism when they realize that they are confronted with advertising, which alters their responses (Friestad & Wright, 1994). Sponsorship disclosures in native advertising are meant to increase consumers’ persuasion knowledge (De Jans & Hudders, 2020) and can activate this defense mechanism as consumers become aware that the commercial intent of the message was disguised (Eisend et al., 2020). The activation of defense processes as a response to the advertising attempt is

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particularly important for vulnerable consumers such as children because their advertising literacy has not been fully developed, making them more susceptible to the negative effects of advertising (Buijzen, 2014). Therefore, self-regulatory bodies, regulators and policymakers such as the Federal Trade Commission in the US and the European Union’s revised Audiovisual Media Services Directive and have issued directives and recommendations about how to disclose sponsorship information in native content. However, the advice and rules are not detailed and leave much room for interpretation (De Jans & Hudders, 2020). As a result, native content can contain types of sponsorship disclosure that may or may not be effective in activating consumers’ defense mechanisms.

Prior research shows that embedded advertising forms create more positive brand effects because they often fail to activate consumers’ persuasion knowledge (Boerman, Van Reijmersdal & Neijens, 2014). This suggests that sponsorship disclosure is a key content factor to explore in native advertising. In their meta-analysis, Eisend et al. (2020) show that overall, sponsorship disclosure information negatively influences brand attitude, credibility and source evaluation but increases brand recognition, persuasion knowledge and resistance. Prior studies on particular types of native content show inconsistent results on how sponsorship disclosure information affects (aspects of) persuasion knowledge and in turn consumer responses in different research contexts (Boerman et al., 2016; Eisend et al., 2020), which implies that existing findings cannot be generalized over all native advertising forms and different target groups.

The above shows that native advertising can be effective, but also deceptive or both, and that this depends on factors such as the advertising context or brand prominence. Thus, to shed more light on the effectiveness and potential deceptiveness of native advertising, 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? More specifically, this dissertation

starts by studying practitioners’ views on theoretically substantiated relevant content and context factors that may influence native advertising and lays out relevant research propositions for future research. Furthermore, it explores the effectiveness of article-style native advertising (sponsored articles on news and entertainment platforms) and of influencer marketing (sponsored blogs on YouTube).

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1.4 Outline of the dissertation

This dissertation explores the effectiveness of native advertising (see Figure 1.1 for an overview).

Figure 1.1: Visual representation of the structure of this dissertation.

The novelty of native content application demands that this dissertation begin by examining practitioners’ views on native content as an effective advertising tactic. Practitioners who operate in the vanguard of the industry and are experienced in native advertising strategies are an appropriate source to identify questions that require further academic attention. To this end, the first empirical chapter (Chapter 2) in this dissertation explores practitioners’ perspectives on the effectiveness of native advertising. The relevant content and context factors that are theoretically expected to influence native advertising effectiveness are first categorized, which results in a research framework. Next, an in-depth qualitative study among industry experts validates the research framework, which leads to a number of important contributions. First, the study provides an in-depth reflection by senior executives from media platforms and brand and media agencies on the effectiveness of native advertising as an advertising tool. Second, this results in a research agenda that contains ten research propositions for further academic research, including recommendations for further research on the effects of brand presence and of brand disclosure information.

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Despite the increasing scholarly attention to the effectiveness of native advertising and the role of persuasion knowledge or advertising literacy, knowledge on how different consumer groups process different types of native content is scarce. Chapters 3 and 4 address this knowledge gap by investigating the effects of two types of native content for different consumer groups. The experimental research in these chapters aims at better understanding of how the recognition and understanding of advertising affect audiences’ perceptions.

Although advertisers are keen on native content because it has been found to lead to more positive consumer evaluations compared with traditional advertising formats (e.g., Tutaj & Van Reijmersdal, 2012), research into the effectiveness of native advertising compared with traditional digital advertising formats remains scarce. Chapter 3 investigates the effectiveness of native content and traditional online advertising by comparing banner advertising with article-style native advertisements in terms of consumer responses. In the context of print magazines, Van Reijmersdal et al. (2005) show that advertorials and theme features lead to positive consumer evaluations of women’s magazines. In an online context, Tutaj and Van Reijmersdal (2012) study a small student sample and find that that native ads are perceived as more amusing, informative and less irritating than banner advertisements and lead to less ad recognition and understanding of advertisements. Considering that article-style native content is now published on almost every entertainment and news platform, including trustworthy sites, it is reasonable to expect that consumers are more aware than in the past of its existence and intent. Building on the Heuristic Systematic Model (Dark & Ritchie, 2007), it is assumed that the increasing exposure to article-style native advertising and the negative publicity around this advertising tactic could lead a situation in which highly educated media-savvy consumers in particular seek to protect themselves and prefer transparent advertising content over native content. To explore this assumption, Chapter 3’s study explores the response to article-style native advertisements compared with banners across a series of advertisements among more-educated men between 20 and 40 years of age. More specifically, Chapter 3 focuses on how article-style native advertisements compared with traditional banner advertising prompt brand effects and how the underlying mechanisms of ad attitude, ad credibility and understanding of the message intent mediate the influence of both types of advertising on the brand effects. A major finding is that traditional banner ads perform better than article-style native advertisement with respect to ad attitude and ad credibility.

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In Chapter 4, the attention shifts to sponsor-vlogger collaborations in YouTube videos for female viewers between 8 and 16 years of age, a vulnerable audience of particular public and regulatory concern with regard to the possible impact of native content. More precisely, a research framework that studies the effects of two important antecedents of young viewers’ advertising literacy—sponsorship disclosure information and parental mediation styles—is developed and empirically tested. In contrast to article-style native advertising, sponsored vlogs often have a high level of brand prominence. Despite this, the transparency of the content’s persuasive intent is not always clear to the audience. Recent research shows that disclosure information in vlogs leads to the activation of persuasion knowledge among young audiences (Boerman & Van Reijmersdal, 2019). Other research shows that factors such as the timing Van Reijmersdal et al., 2020) and source (De Jans & Hudders, 2020) of the disclosure influence its effectiveness in increasing persuasion knowledge. As vlogger videos contain either spoken or written sponsorship disclosure information that may mitigate the anticipated advertising effects (Boerman et al., 2014), Chapter 4 aims to add to this existing knowledge by providing understanding of how the modality of sponsorship disclosure (oral, written or both) influences persuasion knowledge and prompts brand effects. In addition, Chapter 4 investigates how cognitive advertising literacy influences the viewers’ perceptions of the video, vlogger and brand. Furthermore, since parents have a vital role in the development of children’s advertising literacy (Cornish, 2014), the effect of parental mediation in young viewers advertising literacy is examined.

The findings show that whereas in practice, sponsorship collaborations in vlogs are generally communicated through single modality disclosure, only dual modality disclosure (oral and written) increases young viewers’ advertising literacy. Moreover, the findings illustrate that restrictive parental mediation negatively affects children’s advertising literacy. This understanding of the effects of sponsorship disclosure modalities and parental intervention on consumer persuasion knowledge contributes to the ethical and legal debate about the potential deceptiveness of these advertising formats, thereby providing implications for marketing practitioners, policy makers and parents.

Table 1.1 provides an overview of the three empirical chapters of this dissertation, showing their contributions, data source, applied method and key results. The chapters are based on articles that either have been published (Chapters 2 and 3) or are submitted (Chapter 4) to academic journals. Therefore, they can be read independently, although some textual similarities can be found between the chapters.

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Finally, Chapter 5 discusses the main findings from the three empirical chapters and their theoretical and practical implications. Furthermore, it offers suggestions for marketing practitioners, publishers, influencers, policy makers and parents. The chapter concludes with recommendations for future research based on the findings presented herein.

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C h ap te r C ont ri but io n D at a sour ce Me thod K ey re sul ts 2 . D ig ita l n ativ e adve rt is ing: P ra ctitio n er p ers p ect iv es a n d a res ea rch ag en d a -T he or et ic al ly di sc uss es c ont en t a nd co n tex t fa ct o rs t h at d ri v e n at iv e ad v er tisin g e ff ec tiv en ess -D ev el o p s a re se ar ch fr am ew o rk fo r fa ct o rs t h at a ff ect n at iv e ad v ert is in g pe rf or m anc e 22 i n-de pt h e xp er t in te rv ie w s w ith adve rt is er s, publ is he rs a nd m ed ia ag en ci es S em i-st ruc tu re d expe rt in te rv ie w s. A tla sT i. -1 0 k ey p ro p o sitio n s r ef le ctin g p ra ctitio n er s’ p er sp ec tiv es o fa ct o rs t h at i n fl u en ce n at iv e ad v ert is in g e ff ect iv en es s, as w as an ag en d a fo r fu rt h er s ci en ti fi c res ear ch . 3. Y ou don ’t f ool m e! C onsum er pe rc ep ti ons of d ig ita l n ativ e adve rt is ing a n d ba nn er a dve rt is ing -E mp ir ic ally in v estig at es e ff ec ts o f ar tic le -s ty le n ativ e a d v er tise m en ts co mp ar ed to b an n er a d v er tise m en ts. O n lin e e x p er ime n t and sur v ey, consum er p ane l: m o re ed u cat ed m en be tw ee n 20 and 40 y ea rs o f ag e. P ar tia l le as t squa re s p at h mo d elin g -B an n er s l ea d t o a l ar g er un de rs ta ndi ng o f m essa g e i n te nt . -H ighl y e duc at ed m al e c o nsum er s e v al u at e b ann er s m o re p o sitiv el y th an a rti cl e-sty le n ativ e ad s. -A d a ttitu d e, a d c re d ib ility a n d u n d er st an d in g o f me ss ag e in te n t me d ia te th e r ela tio n sh ip s b etw ee n a d ty p e an d b ra n d eff ect s. 4 . T h e ef fe ct s o f in fl ue n ce r vl ogs on young vi ew er s: The r o le o f sponsor shi p di sc lo sur e t ype a nd pa re nt al m edi at ion -E xa m in es t h e e ff ec ts o f di sc lo su re t y pe an d p ar en ta l m ed ia tio n o n c o g n itiv e ad v er tisin g lite ra cy . -D et er min es th e ef fe ct s o f c o g n itiv e ad v er tisin g lite ra cy o n a ttitu d e to w ar d the c ont ent , vl ogg er a nd b ra nd. -P rovi de s i n fo rm at ion f o r r egul at or s i n spe ci fy ing di sc lo su re di re ct iv es . -P rovi de s gui da n ce t o pa re nt s and ca reg iv ers o n t h e ef fe ct iv en es s o f t h ei r m edi at ion st ra te gi es . O n lin e e x p er ime n t and sur v ey, consum er p ane l: da ught er s b et w ee n 8 a nd 16 ye ar s o f ag e an d t h ei r pa re nt s. P ar tia l le as t squa re s p at h mo d elin g . A n al ysi s o f va ri anc e. -A du al moda lity o f sponso rship disc losu re in sponso re d vlogs ( i.e ., w ritte n a nd s poke n) in cr ea se s young a udi en ce ’s co g n itiv e a d v er tisin g lite ra cy . -A ctiv e p ar en ta l m ed ia tio n in cr ea se s ch ild re n ’s co g n itiv e ad v er tisin g lite ra cy , a n d r estr ic tiv e p ar en ta l m ed ia tio n h as a opposi te e ff ec t. -P ar ent al m edi at ion d oe s not m o de ra te t he e ff ec t of sponsor ship dis closur e inf o rm ation o n c o g n itive a dve rtising lite ra cy . -C o g n itiv e ad v er tisin g lite ra cy d o es n o t a ff ec t th e p er ce p ti of t h e vl og . H o w ev er , i t do es l ea d t o st rong er b ra nd ef fe ct s. T abl e 1. 1: Over vi ew o f em pi ri cal chapt er s.