Native Advertising, Paid Media
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Sponsored content. Paid posts. Partner stories. Whatever you want to call it, it’s drummed up its share of controversy over the past year as the vast majority of publishers have adopted some sort of native advertising offering. The media industry’s echo chamber is teeming with talk of it.

But how do readers feel about sponsored content? We got one answer in February, when Tony Haile, CEO of Chartbeat, revealed that only 24 percent of readers were scrolling down on native ad content on publisher sites, compared to the 71 percent of readers who scroll on “normal content.” It was a damning indictment of the quality of sponsored content at large.

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Image via Chartbeat

We wanted to dig deeper into the problem that Chartbeat’s research revealed. While that data gave us a bird’s-eye view of how users behave while reading a sponsored story, it didn’t tell us how readers feel about sponsored content as a whole, how specific circumstances affect their behavior or reveal how perspectives change amongst different demographics. So we decided to fill the gap, asking readers some of the most important questions about how they think about branded content—from what’s conveyed by the term “sponsored content,” to how likely they are to click on it, to how heavily factors like age and education play into those behaviors.

Methodology

Between June 27 and June 30, we surveyed 542 U.S. internet users aged 18–65 with a 13-question online survey.

As the survey was answered by nearly our entire population target, the calculated margin of error was approximately one percent.

Key findings

Most publishers assume that readers know what it means when a post is labeled “Sponsored Content.” But the majority of readers can’t agree on one clear answer. While a plurality (48 percent) of respondents believe that “Sponsored Content” means that an advertiser paid for the article to be created and had influence on the article’s content, more than half (52 percent) thought it meant something different.

But that’s not where the confusion ends. Some of the most striking revelations include:

  • Two-thirds of readers have felt deceived upon realizing that an article or video was sponsored by a brand.
  • 54 percent of readers don’t trust sponsored content.
  • 59 percent of readers believe a news site loses credibility if it runs articles sponsored by a brand.
  • As education level increases, so does mistrust of sponsored content.
  • And yet, respondents rated branded content as more trustworthy than Fox News, and nearly equally trustworthy as MSNBC, indicating that content has a mistrust problem overall.

This study raises a lot of questions for brands and publishers alike, as well as one for us that you may be asking, “Why would Contently, a company that works with publishers and brands that create sponsored content, publish this”? For starters, we consider our magazine, The Content Strategist, a pure editorial endeavor, something that’s helped us build the trust of over 150,000 monthly readers in a relatively short period of time. Our readers (and our clients) expect transparency and honesty from us, and that’s what we strive to give them. And since we cover the content marketing industry, the question “What do consumers really think about sponsored content?” was a fairly obvious one for us to investigate.

The second reason is that we believe that—when done well—brand-created or sponsored content can have a positive impact upon the media world, giving storytellers of all kinds the opportunity to do what they love and deliver true value to readers. But there were signs—despite the sponsored content success stories reported by several publishers—that poorly executed sponsored content was polluting the ecosystem. If there was a problem, we didn’t want it to be ignored. We always want to help publishers and brands give readers exactly what they want. And it does appear that sponsored content has a trust problem. Let’s dig into the results.

Results & analysis

As noted above, publishers’ widespread assumption that they’re communicating clearly and transparently when they label a post as “sponsored content” may not be true. When asked what they think a “sponsored content” label means when they see it on a news website, the answers varied greatly.

Ultimately, this shouldn’t come as much of a surprise; the term “sponsored content” means different things not only among different publishers, but also within the framework of a single publisher. For instance, Mashable runs two different types of sponsored content—one model where a brand merely underwrites a piece of Mashable editorial and has no influence on its content, and a separate model where they feature content created by the brand. And while the content of The New York Times’ inaugural “paid post” campaign was created by Dell, their recent paid-post longform piece for Orange is the New Black, Women Inmates: Why The Male Model Doesn’t Work,” was written by Melanie Deziel, an editor at the Times‘ brand studio.

But even if readers don’t understand what branded content means, do they prefer it to the much-maligned banner ad? If you work in digital media, the answer may surprise you. Fifty-seven percent of readers said that they’d prefer that their favorite blogs and news sites run banner ads instead of sponsored articles.

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Interestingly, this finding holds up fairly consistently across age groups. Though digital-first, millennial-focused sites like BuzzFeed have fully embraced sponsored content in place of banner ads, millennials aren’t any more likely to prefer sponsored content to banner ads.

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Another fascinating demographic result: Respondents with graduate degrees were also the most likely to express a preference for banner ads.

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But why do readers express a preference for banners? One reason, it appears, is a lack of transparency. Two-thirds of respondents said that they’ve felt deceived upon realizing that an article or video was sponsored by a brand.

When we drilled down into this data, the strong preference for banner ads by those with a graduate degree became a little clearer. Seventy-seven percent of respondents with a graduate degree reported having felt deceived upon realizing that an article or video was sponsored by a brand, compared to just 46 percent of respondents with a high school diploma.

It’s a fascinating correlation: As education levels increase, so too does the likelihood of a respondent feeling deceived by a piece of branded content.

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Given these results, our next finding wasn’t surprising: Two-thirds of respondents are also less likely to click on an article sponsored by a brand compared to regular site editorial.

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And as with preference for banner ads, the proportion of respondents who said that they were not as likely to click on sponsored content as editorial content increased steadily with education level.

Additionally, though younger readers are perceived as being more open-minded about sponsored content, the reverse seems to be true; the likelihood of clicking on a sponsored article actually increasing as age increases.

(This is one piece of self-reported data that would be particularly fascinating to compare with user behavior. Chartbeat and BuzzFeed, are you listening?)

When readers do click, how likely are they to trust what they click on? A little more than half of respondents said that they generally don’t trust content from brands. Amongst those who said that they do (at least occasionally) trust sponsored content, preexisting trust in the brand, and not the publication, was the biggest factor in doing so, by a factor of 23 percent to 19 percent.

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Unsurprisingly, given our results above, respondents with graduate degrees were nearly twice as likely to distrust sponsored content as those with high school diplomas.

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For publishers, all this brings up a big question: How is sponsored content affecting the way readers think of them? Are they losing credibility? The majority of respondents—59 percent—said that news sites are losing credibility when they run articles sponsored by a brand.

And the likelihood of feeling that way increases as education level increases, which may be troublesome to publishers like The New York Times and The Wall Street Journal that like to boast a highly educated readership.

However, this is one area where millennials were more lenient, with only 49 percent of respondents aged 18–29 saying that a news site loses credibility if it runs sponsored content.

Ultimately, however, this may not just be a brand problem or a native advertising problem, but an issue of reader trust with agenda-influenced publishers overall. We asked respondents to rank how often they trust of content from brands, content from MSNBC, and content from Fox News on a scale of:

  • 1 – Never
  • 2 – Not usually
  • 3 – Occasionally
  • 4 – Often
  • 5 – All the time

Then, we averaged those scores. Despite all the cynicism and mistrust of sponsored content, stories from brands were deemed more trustworthy than content from Fox News and were barely edged out by MSNBC.

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Finally, we asked a couple of baseline questions about content quality, in order to provide some context for how much people view sponsored content relative to other types of advertising and non-sponsored content. The following two charts show weighted averages of people’s rankings of comparative quality and straightforwardness between various methods of content advertising versus a few controls. What emerges is an interesting (and cynical) spectrum:

It’s no surprise that people find newspaper and magazine stories of higher quality than your average mommy blog post. What is surprising, however, is that sponsored content and owned content on brands’ websites rank in between those two publishing bookends. Print advertorial is seen as higher quality than online sponsored content, though in the next chart it’s seen as less honest. And interestingly, banner ads are seen as very transparent. Too bad transparency isn’t linked to click-through rate.

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(It should be noted that we did not ask for respondents to specifically rank BuzzFeed’s journalistic content. So the above stat represents the average perception of the average BuzzFeed post. All those quizzes and Reddit photos are probably bringing that average down.)

Conclusion

Sponsored content is booming, but it’s clear from our survey data that brands and publishers still have a long way to go to earn readers’ engagement, attention, and trust.

How sponsored content should be labeled has been a hot-button issue, and that two-thirds of respondents reported having felt deceived by sponsored content shows that publishers and brands need to do a better job of indicating when a story came from a sponsor. The data also reveals that misgivings about sponsored content become more pronounced with education level, which is troubling for many publishers actively selling a highly educated, high-earning audience.

Another underlying issue may be self-promotion. In May, a Kentico Software survey found that 74 percent of the general public trusts educational content from businesses on a particular topic, but “even signing off an otherwise objective blog post or newsletter with a product pitch will bring the content’s credibility level down by 29 percent.”

It’s also worth noting that there have been many sponsored content success stories. Meredith Levien, The New York Times‘ executive vice president of advertising, recently announced that readers were spending as much time with their sponsored content as their regular editorial, and that some pieces were greatly outperforming New York Times editorial. Last fall, Mashable Branded Content Editor Lauren Drell wrote that readers were spending more time with Mashable’s branded content than its editorial. “Time spent on branded content is 50 percent higher than that of the average Mashable article, and CTR on display ads around branded content is 2x that of the average article,” she wrote. And brands like Virgin Mobile and Mini that run extended sponsored content campaigns on BuzzFeed see a brand lift of upwards of 350 percent as a result, reports BuzzFeed’s case studies.

None of this means that sponsored content is dead in the water. It just means that it’s time to get it right.

This post originally appeared on The Content Strategist.
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