NATIVE ADVERTISING POWER RESPONSIBILITY AND RISK...messages into content consumers are looking for...

NATIVE ADVERTISING - POWER, RESPONSIBILITY AND RISK

Chelsea Smallwood Bachelor of Business (Marketing)

Submitted in fulfilment of the requirements for the degree of

Master of Business (Research)

Submitted to the

School of Advertising, Marketing and Public Relations

QUT Business School

Queensland University of Technology

2018

Native Advertising - Power, Responsibility and Risk i

Keywords

Native advertising, sponsored content, branded content, advertorials, marketing,

advertising, power-responsibility equilibrium, ethics, responsibility.

Native Advertising - Power, Responsibility and Risk ii

Abstract

Proclaimed as the way forward in digital advertising, native advertising is rapidly

growing in popularity with billions of dollars projected to be spent on this approach

in 2018 (Niekerk, 2017). Popular for its ability to seamlessly integrate brand

messages into content consumers are looking for on platforms they are visiting,

native advertising offers brands a way to cut through advertising clutter and connect

with consumers in an engaging way (Wojdynski & Evans, 2016).

However, despite its popularity native advertising is attracting a lot of criticism for

various reasons. Firstly, because it is difficult for consumers and regulators to

identify that it is advertising content and therefore may be misleading and deceptive,

and secondly, because it is difficult to regulate as there is no standard format.

Coined in 2011 during an industry discussion of how to monetise publisher content

online, native advertising is considered to be a new term within digital advertising

and a new area within academic research.

This study explores native advertising by first examining the literature from industry

and academic discussion to understand how and why native advertising emerged as

an advertising approach. Further, it investigates the perceived risks as well as ethical

and regulatory challenges. From the literature review, an overarching research

question was developed to guide this study, ‘What is native advertising and what are

the ethical and regulatory considerations?’

Using the Delphi technique, this study examines native advertising from the

perspective of the stakeholders (agencies, brands, publishers and academics) and

how they view native advertising relative to similar advertising approaches such as

advertorials, product placement, sponsored and branded content. Additionally, the

stakeholders’ views about regulatory and ethical considerations and the risks

associated with using native advertising are explored.

Native Advertising - Power, Responsibility and Risk iii

Chapter Four presents the results from the research questions. Chapter Five discusses

these results and examines the key themes from this study, which include: priorities,

power, responsibility, value and priorities.

The key findings indicate that native advertising is viewed differently among the

stakeholder groups depending on their priorities and motivations for using it.

Publishers want to control the process from ideation to publication because of what it

offers them in terms of advertising revenue and their readership through sought for

quality content. Brands value the ability to cut through clutter and connect with

consumers who are otherwise difficult to reach. Whereas, agencies value what native

advertising offers as part of the broader picture in terms of value to the consumer and

reaching a brand’s objectives.

In terms of regulation, the stakeholders identified various risks associated with native

advertising such as the potential for consumers to feel misled or deceived or that they

may become sceptical of other publisher content. Native advertising is considered

extremely difficult to regulate due its use online across domestic and international

markets as it does not fit specific format types and is difficult to standardise with

labelling. Content creators are aware of these difficulties and are faced with decisions

around transparency and labelling. The stakeholders demonstrated a strong sense of

responsibility not only because of the associated risks but also because ethically they

believe consumers should be able to distinguish advertising content from editorial

content.

This study applies the Power-Responsibility Equilibrium (PRE) theory to understand

the relationship between the stakeholders and the consumer. From the findings a

model was created which furthers our understanding of power and responsibility in

the context of native advertising, adding to it the inciting variable of risk. Various

levels of risk were identified in this study and found to be a contributing factor

towards rebalancing or disrupting the balance of power and responsibility.

This research is important for several reasons. Firstly, it adds to the body of literature

in the area of native advertising, and secondly it contributes to the understanding of

the stakeholders’ perceptions of native advertising, their reasons for using it, their

Native Advertising - Power, Responsibility and Risk iv

ethical and regulatory considerations when adopting this strategy, and importantly

their views on labelling and transparency. Further, this information offers valuable

insight to regulators who are responsible for designing regulatory policy and who

rely on stakeholders to exercise ethical responsibility.

Native Advertising - Power, Responsibility and Risk v

Table of Contents

Keywords ................................................................................................................................... iAbstract ..................................................................................................................................... iiTable of Contents ...................................................................................................................... vList of Figures ......................................................................................................................... viiList of Tables .......................................................................................................................... viiList of Abbreviations .............................................................................................................. viiStatement of Original Authorship .......................................................................................... viiiAcknowledgements .................................................................................................................. ixChapter 1: Introduction ...................................................................................... 11.1 BACKGROUND ............................................................................................................. 11.2 RESEARCH AIM and QUESTIONS .............................................................................. 31.3 JUSTIFICATION FOR RESEARCH ............................................................................. 31.4 METHODOLOGY .......................................................................................................... 61.5 THESIS OUTLINE ......................................................................................................... 7Chapter 2: Literature Review ............................................................................. 92.1 INTRODUCTION ........................................................................................................... 92.2 ADVERTORIALS ......................................................................................................... 112.3 POWER-RESPONSIBILITY EQUILIBIRUM THEORY ........................................... 152.4 THE ADVERTISING ENVIRONMENT HAS CHANGED ........................................ 172.5 EMERGENCE OF NATIVE ADVERTISING ............................................................. 222.6 CRITICISMS AND NEW CHALLENGES WITH NATIVE ADVERTISING ........... 282.7 THE FUTURE OF NATIVE ADVERTISING ............................................................. 352.8 SUMMARY AND IMPLICATIONS ............................................................................ 36Chapter 3: Research Design .............................................................................. 393.1 INTRODUCTION ......................................................................................................... 393.2 RESEARCH DESIGN ................................................................................................... 393.3 THE DELPHI TECHNIQUE ........................................................................................ 413.4 LIMITATIONS OF THE DELPHI METHOD ............................................................. 443.5 DELPHI STUDY PARTICIPANTS ............................................................................. 453.6 DATA COLLECTION, TIMELINE AND INSTRUMENTS USED ........................... 513.7 DATA QUALITY ......................................................................................................... 563.8 ETHICAL CONSIDERATIONS .................................................................................. 573.9 CONCLUSION ............................................................................................................. 58

Native Advertising - Power, Responsibility and Risk vi

Chapter 4: Results .............................................................................................. 59INTRODUCTION .................................................................................................................. 594.1 RQ1: What are the elements that define native advertising and make it unique to other forms of advertising? .............................................................................................................. 604.2 RQ2: What are the anticipated risks for brands adopting a native advertising strategy?674.3 RQ3: How should native advertising be regulated and who should ethically be responsible for this? ................................................................................................................ 704.4 RQ4: What is the future for native advertising? ........................................................... 774.5 SUMMARY OF KEY FINDINGS AND CONCLUSION ........................................... 81Chapter 5: Discussion ........................................................................................ 855.1 INTRODUCTION ........................................................................................................ 855.2 KEY THEMES FROM THE STUDY .......................................................................... 865.3 IMPLICATIONS FOR THEORY .............................................................................. 1025.4 IMPLICATIONS FOR PRACTITIONERS ................................................................ 1045.5 LIMITATIONS OF THE STUDY .............................................................................. 1065.6 OPPORTUNITIES FOR FUTURE RESEARCH ....................................................... 1065.7 CONCLUSION ........................................................................................................... 107Bibliography ........................................................................................................... 110Appendices .............................................................................................................. 129

Native Advertising - Power, Responsibility and Risk vii

List of Figures

Figure 4.1. Native advertising and sponsored content share the same definition

Figure 4.2. Native advertising is an umbrella term

Figure 4.3. Native advertising is an example of sponsored content

Figure 5.1. Model of Power, Risk, and Responsibility

List of Tables

Table 4.1 Defining elements of native advertising

Table 4.2 Examples of native advertising

Table 4.3 Consensus achieved for definitions of other terms

Table 4.4 Risks associated with native advertising

Table 4.5 Responsibility for regulation of native advertising

Table 4.6 Importance in identifying native advertising as a paid advertisement

Table 4.7. Responsibility for creating and approval of native advertising content

Table 4.8. Responsibilities by group to create native advertising

Table 4.9 Native advertising and ad blockers

Table 4.10 The future of advertising

Table 5.1. Stakeholder priorities and their perceptions of native advertising

Table 5.2. Summary of risks when using native advertising

List of Abbreviations

PRE Power-Responsibility Equilibrium

FTC Federal Trade Commission

IAB Interactive Advertising Bureau

Native Advertising - Power, Responsibility and Risk viii

Statement of Original Authorship

The work contained in this thesis has not been previously submitted to meet

requirements for an award at this or any other higher education institution. To the

best of my knowledge and belief, the thesis contains no material previously

published or written by another person except where due reference is made.

Signature:

Date: October 2018

QUT Verified Signature

Native Advertising - Power, Responsibility and Risk ix

Acknowledgements

I would like to thank the following people who made completing this study possible.

Firstly, I would like to say a big thank you to the participants of this study who

generously donated their time, talent and expertise towards this project. Without your

dedication to participate this would not have been possible.

To my wonderful supervisors, Louise Kelly and Gayle Kerr, thank you! It has been a

fantastic journey working with you on this project. Your insight, knowledge and

constant encouragement has been invaluable along the way.

To my colleagues and close friends Greg, Scott, Bianca, and Michelle your support

and encouragement has meant the world to me. Thank you for listening and

providing guidance to me along the way. I am truly grateful.

To my sister Jade and parents, thank you for the countless hours of babysitting. I

could not have achieved this without you. Thank you!

And lastly, to my husband Andrew and my gorgeous children Georgia and Flynn,

thank you for putting up with me being constantly glued to the computer screen over

the last few years as well as putting up with the countless trips to the library. Your

patience, love, and support mean everything to me! Thank you x

Native Advertising - Power, Responsibility and Risk x

Chapter 1: Introduction 1

Chapter 1: Introduction

This chapter provides an overview of this study that investigates native advertising to

understand what it is and explore the ethical and regulatory considerations from the

perspective of the stakeholders (agencies, brands, publishers and academics). This

chapter outlines the background to the research and the research problem (1.1), the

research aim and questions (1.2), and the benefits and justification for the research

(1.3). Finally, an outline of the structure of the thesis is outlined in this chapter (1.4).

1.1 BACKGROUND

Connecting with consumers in recent years has proved challenging for advertisers.

Consumers are constantly bombarded by thousands of advertising messages each day

resulting in consumers becoming annoyed and choosing to ignore and often block

advertising from their view (Simpson, 2017; Beak & Morimoto, 2012; Speck &

Elliot, 1997).

Publishers have also struggled with dwindling revenue streams as consumers move

away from print media to digital sources online. Further, the fragmentation of

channels and the large quantity of platforms offering free information that consumers

once paid for, has made it increasing difficult to convert consumers to subscription

based services and attract advertising spend (Bakshi, 2014; Barthel, 2017; Fisher,

2018; Ponkivar, 2014).

In response to these challenges publishers started to offer an advertising product

which is referred to as native advertising. Unlike traditional media that is obviously

placed by an advertiser, native advertising steps outside of the obvious advertising

formats utilising methods that are arguably more covert (Einstein, 2016; Wojdynski,

2016; Wojdynski & Evans, 2016).

Heralded, as the answer to publishers and marketer’s needs online, native advertising

is rapidly being adopted across various platforms such as video, social media and


news sites. With an estimated global spend of US $59.35 billion dollars allocated

towards this approach for 2018 native advertising is showing no signs of slowing

down and is anticipated to continue to grow in popularity in the coming years

(Niekerk, 2017; eMarketer, 2017).

However despite its popularity, it is also attracting a large degree of criticism.

Arguments against native advertising suggest that it is likely to cause harm to

consumers who are unaware that the content they are consuming is an ad (Vega,

2013; Ponkivar, 2014; Taylor, 2017; Wojdynski & Evans, 2016). Others suggest that

it is misleading (Berry, 2014; Wasserman, 2013). It has created a divide among

advertisers who believe that by over regulating this type of advertising will impede

on the creativity and effectiveness of native advertising (Sahni and Nair, 2016).

While various regulatory bodies around the world have introduced guidelines in an

attempt to overcome these issues, recent reports in America suggest that only 40% of

advertisers are choosing to follow these (MediaRadar Report cited in Forbes, 2017).

This has raised many concerns around the ethical implications of this approach and

how it should be regulated. Who should be responsible? And how they should be

held accountable?

While academic researchers have started to examine native advertising in recent

years much of the research to date has focused on understanding native advertising

from the perspective of consumers. Specifically whether consumers are able to

recognise native content (Wu, Huang, Li, Bortree, Yang, Xiao, Wang, 2016), the

effects of disclosure and labelling on a consumers ability to recognise native

advertising (Wojdynski & Evans, 2016), their attitudes and sharing of native

advertising (Lee, Kim & Ham, 2016), and the effects of native advertising as a public

relations tool (Sweetser, Joo, Golan, and Hochman, 2016). Little is known from the

perspective of those involved with creating and researching native advertising. To

date research in this space has focused primarily on understanding its popularity and

reasons for adoption by publications (Conill, 2016).

This research aims to examine native advertising from the perspective of the

stakeholders, specifically: agencies, brands, publishers, and academics, to understand

their views on native advertising, how it should be defined and importantly their


view on ethical and regulatory considerations. While, academics are not responsible

for content creation, they are valuable for this research as they can offer insight

through their extensive knowledge and rich understanding of advertising. Further,

they are often on the forefront of native advertising discussion.

1.2 RESEARCH AIM AND QUESTIONS

The purpose of this thesis is to explore native advertising from the perspective of the

stakeholders to gain insight into their views of the ethical and regulatory

considerations. To achieve this, the following overarching research question will be

used to guide this study:

“What is native advertising and what are the ethical and regulatory considerations”

This overarching question will be explored through the following four research

questions:

1. What are the elements that define native advertising and make it unique to other

forms of advertising or publisher content?

2. What are the potential risks when adopting a native advertising strategy?

3. How should native advertising be regulated and who ethically should be

responsible for this?

4. What is the future for native advertising?

1.3 JUSTIFICATION FOR RESEARCH

Understanding native advertising from the perspective of the stakeholders is an

important area of research so that policy makers, content creators and educators are

aware of the areas of importance to them, their priorities, and their attitudes towards

regulation and who should be ethically responsible.

The importance of this research can be summarised into four key reasons:


1. Native advertising is rapidly growing in popularity and shows no sign of

slowing down due to financial opportunities for publishers and the

benefits it offers brands.

Since its introduction in 2011, native advertising has increasing grown in popularity.

Initially offered on websites such as Buzzfeed and Mashable, the advertising

approach was quickly adopted by news sites such as New York Times, Forbes and

The Wall Street Journal. Since then native advertising has extended to be offered by

most news sites, and social media platforms such as Facebook and Twitter, fuelling

its popularity for advertisers (Boland, 2018).

While recent reports show a drop in spend in programmatic advertising and print

media, they show a dramatic increase in spend in native advertising (MediaRadar,

2017). Experts predict that approximately 74% of all advertising revenue will be

generated from native advertising content by 2021 and that native advertising will

continue increasingly be favoured by advertisers in the coming years (Boland, 2018;

DeMers, 2018).

Given the degree of popularity and money being allocated towards this advertising

approach it is crucial that we gain an understanding into what it is and how the

stakeholders responsible for creating native advertising content view this approach.

2. There is confusion around the definition for native advertising

Native advertising has evolved at such a rapid rate, that a formal common definition

and conceptualization of the approach has not yet been established (Matteo & Dal

Zotto, 2015). There are conflicting definitions about what native advertising is and

how it varies to similar terms. It is unclear if native advertising is an advertorial,

sponsored content or another concept all together? At this stage it is also unclear how

they fit together. Discussion within industry suggests confusion around the term

(Fisher, 2018). Examination of academic literature also suggests a lack of

consistency in terminology with the word often used interchangeably with like terms

(Warzel, 2013; Matteo & Dal Zotto, 2015).


3. Little is known academically about native advertising, specifically the

stakeholder’s view of native advertising and its ethical considerations.

While terms such as advertorials and sponsored content which are considered similar

to native advertising are well researched and understood, native advertising is

considered to be a relatively new term and is still in the early stages of being

explored. To date there is limited academic research that provides insight into the

stakeholder’s view of the ethical and regulatory considerations when choosing to

adopt a native advertising strategy.

Initial research into practitioner perspectives have explored native advertising, but

have focused predominately on effectiveness, and the importance of context and how

to increase performance of the native content (Harms, Bijmolt, & Hoekstra, 2017). It

has also been examined to explore how to use native advertising as a public relations

tool (Sweetser, Joo, Golan, & Hochman, 2016). This research intends to extend the

current knowledge in this area and add to the understanding of native advertising

from the perspective of the stakeholders.

Gaining an understanding into the views of the stakeholders – agencies, publishers,

brands and academics may offer valuable insights into how decisions are made and

highlight areas the other stakeholder groups may need to consider when engaging to

develop native ad content. Further, it may provide insight into the different priorities

and assist the stakeholders in their decision-making.

4. Because of the difficulties in regulating native advertising, it is important

to gain insight into the ethical considerations of the stakeholders, how

they believe it should best be regulated, and who ethically should be

responsible.

Unlike traditional media that is clearly booked and paid for by an advertiser, native

advertising steps outside of the obvious advertising formats utilising methods, which

are deliberately more covert (Sahni & Nair, 2016). Extending over various platforms

and ad types making it difficult to identify as an advertisement, because it does not


fit a particular mould. While this can be seen a benefit for advertisers, it has added to

the complexity of regulating native advertising.

The topic of regulation has created a divide amongst advertisers. Some have called

for tighter regulation, worried that native advertisements are likely to cause harm or

irritate consumers when they realise it is advertising (Bakshi, 2014). Whereas others

believe that over regulating it will impede the creativity and the effectiveness of the

advertisement (Sahni & Nair, 2016).

Adding to the complexity of regulation, unlike traditional advertising such as

newspapers or television, digital media is not limited to physical borders (Katsirea,

2016; Matteo & Dal Zotto, 2015). Consumers can access content immediately from

various markets nationally and internationally. Advertisers in Europe can run native

ads concurrently across various platforms within America, Africa and Australia

making extremely difficult to regulate.

Given the complexity of regulation for native advertising, regulators rely heavily on

the stakeholders to exhibit a large degree of ethical responsibility. This study aims to

contribute to understanding of how stakeholders view native advertising and their

reasons for using it. What are their ethical considerations when adopting a native ad

strategy? What are their views on labelling and transparency? Further this research

aims to offer insight for regulators who are responsible for designing appropriate

regulatory policy.

1.4 METHODOLOGY

To investigate the overarching research question ‘What is native advertising and

what are the ethical and regulatory considerations’ the Delphi Technique was

selected. This was considered the most appropriate for the following reasons:

• It allowed the ability to purposely select an expert panel based on experience

and expertise on the topic of native advertising. It also enabled the collection

of a broader richer opinion (Linstone & Turoff, 1975, 2011).


• The Delphi technique enables anonymity of the participants and their

responses. Anonymity ensures participants are not influenced by the

responses of other participants on the panel and encourages independent

thought (Dalkey & Helmer, 1963; Goodman, 1987; Hsu & Sandford, 2007;

Keeney, Hasson, & McKenna, 2001). This was considered important

because of the conflicting opinions in discussion about native advertising

within industry. It was important that others did not influence opinions during

the data collection process.

• Data is collected through waves or iterations and provides a framework to

gain consensus. Waves allow flexibility to explore the topic for as long as

needed to collect rich insights (Hasson, Keeney, & McKenna, 2000).

• The Delphi technique uses both qualitative and quantitative measures. The

combination of qualitative and quantitative measures allows for the ability to

delve deeper than a purely quantitative study and enables an objective

analysis of the final rounds of data collected, free from biasing effects

(Dalkey, 1969; Hsu & Sandford, 2007; Landeta, 2006).

• Participants do not need to be physically present using the Delphi technique.

This allowed the study to include participants from various time zones and

countries around the world, and allowed for collection of data via phone and

email (Guzys, Dickson-Swift, Kenny, & Threlkeld, 2015; Linstone & Turoff,

2011).

1.5 THESIS OUTLINE

Chapter One provides an introduction to the concept of native advertising, the

purpose behind the research, and provided a general direction for this study.

Chapter Two explores the literature relating to advertising within the online

environment, identified gaps in the literature and outlined proposed research

questions. It also investigated native advertising’s emergence and importance, and

how it may have impacted consumer empowerment. This chapter introduces the

power-responsibility equilibrium theory which provides a framework to understand

the relationship between the between the consumer and the stakeholders (agencies,

brands, publishers and academics) and the use of native advertising.


Chapter Three provides an outline of the methodological approach and justification

for the Delphi technique. It outlines the process involved from data collection to

analysis.

Chapter Four presents the results according to the four research questions.

Chapter Five provides an interpretation and discussion of the results in connection to

the reviewed literature, and the theoretical model of the Power-Responsibility

Equilibrium and risk. Implications for theory, regulators, and practitioners are

presented, as well as recommendations for future research.

Chapter 2: Literature Review 9

Chapter 2: Literature Review

2.1 INTRODUCTION

Since marketing's inception advertisers have held both power and responsibility. The

power to control the marketplace through satisfying product needs, dictating the

terms and conditions of sale, and controlling the advertising message and marketing

environment (Rust & Oliver, 1994; Rezabakhsh, Bornemann, Hansen & Schrader,

2006). Equally, advertisers have carried the ethical responsibility to provide accurate and

truthful information about their products to the marketplace to enable consumers to

make well-informed, rational purchase decisions (Cunningham, 1999; Sandage,

1972). Providing accurate information has always been important, particularly when

consumers have limited access to information; and are highly dependent on the

reliability and truthfulness of the message from the advertisers.

Advertorials, typically associated with print media, were one of the first types of

advertising that blurred the lines of responsibility. Advertorials looked like editorial

content, but were actually advertising. Critics suggest that advertorials use deceptive

techniques to trick readers into thinking the content was written by an unbiased

source, the publisher, instead of an advertiser so that readers trust the content.

The advertorial became popular in the 80’s and early 90’s and extended into the

online environment in the late 90’s in the form of online magazines (Ju-Pak et al.,

1995; Stout, Wilcox, & Greer, 1989). More recently, publishers have started offering

an advertising approach referred to as native advertising, which many suggest is an

evolved version of an advertorial (Staplefoote, 2014; Coyne, 2014).

Native advertising has quickly become a preferred advertising method online

overtaking display and banner ads in popularity with an estimated global spend of

US $59.35 billion dollars being allocated towards this digital display method for

2018 (Niekerk, 2017). Native advertising is showing no signs of slowing down in


popularity and is anticipated to continue to grow in favour over the coming years

(eMarketer, 2017).

Hailed as the answer to publishers and marketers advertising needs online offering

higher levels of engagement rate and new hope for lost print revenue streams for

publishers, native advertising has rapidly been adopted across various social media

platforms, content portals, news sites, video-sharing sites, and streaming services

(eMarketer 2014; Lovell 2014, Sharethrough, 2017).

Despite the popularity of native advertising, there is still a lot of debate and

confusion around its definition. There are conflicting opinions about whether it is an

evolved version of an advertorial or whether it is a new approach altogether. There is

also confusion about how it fits with similar terms such as branded and sponsored

content (AdNews, 2015; Lazauskas, 2015; Native Advertising Institute, 2017).

While there is currently no universally agreed definition within scholarly literature or

industry, a commonly used definition from the Interactive Advertising Bureau (IAB)

suggests that native advertising is “paid ads that are so cohesive with the page

content, assimilated into the design and consistent with the platform behavior that the

viewer simply feels they belong” (IAB, 2015; eMarketer, 2014; p14; Lovell 2014).

The widespread use of native advertising has attracted considerable criticism due to

its lack of visibility. Like advertorials, native content can be difficult to identify as an

advertisement because it blends a commercial message into content produced by a

publisher (Carlson, 2015; eMarketer, 2014). Arguments against native advertising

suggest that advertisers are abusing consumer trust, because consumers are often

unaware that the content they are consuming is an advertisement (Berry, 2014;

Dumenco, 2014; Wasserman, 2013).

While the Federal Trade Commission (FTC) and various other industry bodies

around the world have offered guidelines to encourage advertisers to clearly identify

native content as an advertisement, it has proved difficult (McPherson, 2016;

Katsirea, 2016; Knowles & Mudge, 2016). Part of the challenge stems from being

able to identify the native ad content in the first place, and secondly the difficulty in


trying to regulate advertising in the online environment, where content is not

necessarily confined to local markets, and can extend internationally to consumers in

other countries (Katsirea, 2016; Matteo & Dal Zotto, 2015).

While academic researchers have started to examine native advertising from the

perspective of the consumer (Wu et al, 2016; Wojdynski & Evans, 2016; Sweetser,

et. al. 2016) we are still yet to fully understand it from the broader perspective of the

other stakeholders – specifically, publishers, agencies, brands and academics. This

study aims to examine the opinions of stakeholders, and in particular their view on

the elements that are unique to native advertising and how it is different to other

terms.

Further, using the Power-Responsibility Equilibrium (PRE) theory, this research will

examine the balance of power and responsibility between the stakeholders and the

consumer. Specifically, it will investigate the stakeholder’s perception of their legal

and ethical responsibility in connection to native advertising and the risks associated

with using it.

To provide context for this study, the following section will examine relevant

literature and industry discussion to establish how native advertising has emerged by

first reviewing advertorials - an advertising approach similar to native advertising.

Secondly, the changing advertising environment will be discussed and the new

challenges that have arisen online for advertisers and publishers. Next, the

emergence of native advertising as an important advertising tool will be explored and

the various definitions from academic and industry sources and similar terms will be

reviewed. And lastly, this chapter will present a discussion of the criticisms of native

advertising, the potential risks, and ethical and regulatory difficulties.

2.2 ADVERTORIALS

The term advertorial is a combination of two terms - “advertisement” and “editorial”

(Wang, Yu, Dong, 2015). By definition advertorials are paid-for, commercial

messages that simulate the content of a publication in terms of design/structure,

visual/verbal content, and the context in which it appears (Cameron, Ju-Pak, & Kim,


1996; Ju-Pak, Kim, & Cameron, 1995). Often written to appear as editorial content,

advertorials are essentially an advertisement with a large amount of information

about a product or service intentionally designed to blend into the surrounding

content so that consumers are unaware that the content they are consuming is an

advertisement (Kim, Pasadeos and Barban, 2001). Advertorials are typically situated

within the editorial section of the paper or magazine away from other advertisers or

advertising sections (Rinallo & Basuroy, 2009).

Brown and Waltzer (2005) identified three types of advertorials. 1. An “Image”

advertorial, which focuses on creating positive impressions or images of the

sponsored advertiser. 2. “Advocacy” advertorials, which are designed to win support

for controversial situations such as a political issue or political party, and 3,

“Journalism” advertorials, which are used to attract attention to a particular subject.

Advertorials are considered far less obvious than traditional advertisements and are

not as easily recognised by readers (Stout Wilcox and Greer; 1989; Kim, Pasadeos

and Barban, 2001). This is part of their appeal to advertisers, because the advertorial

format breaks from conventional forms of advertising that audiences have become

accustomed to and are tuning out from, by offering something different and cutting

through the advertising clutter (Ju-Pak et al., 1995). By blending into the surrounding

editorial content, it is believed that the overall effectiveness of the advertising

message is increased (Eckman and Lindof, 2003).

Studies into editorial content found that people were far more likely to read editorial

content than advertising content (Elliot, 1984) often with the purpose of gaining

information, to be entertained, or to explore a topic of interest (Attaran, Notarantonia

& Quigley, 2015). Editorial content is also often perceived as more credible than

advertising messages and more unbiased than an advertising message that typically

only promotes positive aspects of a product (Batinic & Appel, 2013; E. Van

Reijmersdal, Neijens, & Smit, 2005; E. A. Van Reijmersdal, Neijens, & Smit, 2010).

Advertisers benefit from consumers thinking that an advertorial is an editorial while

still being in control of the advertising message (Eckman and Lindlof, 2003; Kim et

al. (2001). Van Reijmersdal, Neijens & Smit (2005) found that audiences thought a


blend of advertising and editorial content was more “amusing, informative, and less

irritating” than traditional advertisements.

In terms of outcome success numerous studies suggest that consumers are more

likely to elaborate on the content of the advertorial than traditional advertising

messages, and therefore are more likely to remember the message (Lord & Putrevu,

1993, Wilkie & Farris, 1974). Further, readers were more likely to have favourable

attitudes and an increased willingness to purchase the advertised products after

reading an advertorial than a conventional advertisement, due to the decreased

knowledge of the persuasive intent of the advertorial (Kim & Hancock, 2017;

Attaran, Notarantonia & Quigley, 2015; Wang, Yu and Dong, 2016). Lennon and

Kim suggest that a possible reason for this could be that relate to the higher amount

of information delivered to readers in an editorial or advertorial (2000).

Critics of advertorials question the ethical nature of advertorials suggesting that

because they blur the line between advertising and editorial content they can confuse

and can mislead readers (Kim & Hancock, 2017). Advertorials push the boundaries

of consumer trust and advertiser responsibility, because they are intentionally

designed to look like something other than an advertisement.

Despite the controversy around advertorials and the concerns over their

deceptiveness, the use of the advertorial format grew in popularity in the 80’s and

90’s and later in print media and television. In the late 90’s, advertorials moved into

online environment predominately in the form of online magazines (Ju-Pak et al.,

1995; Stout, Wilcox, & Greer, 1989).

2.2.1 How advertorials were regulated and who was responsible

In response to the ethical concerns about advertorial deception and confusion, the

American Society of Magazines (ASM) introduced a set of voluntary guidelines in

1989. These were then later adjusted in 1997 to include advertorial use in Internet

based magazines (Kim, Pasadeos, Barban, 2009).


Similarly, the UK and Australia, introduced codes that were regulated through

industry bodies such as the Advertising Standards Authority (ASA), and the

Advertising Standards Board (ASB) and the Australian Press Council (APC). The

codes, though not backed by legislation, strongly recommended that advertorials

were clearly labelled and identifiable as an advertisement. Compliance was self-

monitored internally by the publisher and was typically enforced through competitive

and consumer group pressure within regional markets (Montibeler, 2014).

In addition to these guidelines, laws in Australia, USA and UK also offered

protection to consumers against advertising that was considered misleading or

deceptive. Though importantly, the absence of labelling in Australia does not

necessarily suggest that an advertisement is intentionally deceptive or misleading

(Conversation, 2014).

For print media, the use of explicit labelling such as using the word “advertisement”

“advertising feature” or “special feature” at the top of each page in larger font than

the body text of the editorial was recommended by the ASM and APC to visually

separate advertorial content from the rest of the publication and to signal to the

consumer the commercial intentions of the content (Australian Press Council, n.d.;

Kim & Hancock, 2017).

However, despite the introduction of advertorial guidelines, advertisers did not

always follow them. At the height of advertorial use in the late 90’s studies found

that at least one third of advertisers chose to ignore the guidelines for various

reasons, and further, only one fifth of those that did use labels followed the

guidelines set by the ASM with several other variations used instead (Cameron & Ju-

Pak, 2000; Cameron et al., 1996).

Despite the difficulty in enforcing advertiser adherence to the guidelines, regulation

of advertorial content in the 90’s and early 2000’s was considered manageable as it

was typically locally produced and confined within national boundaries and therefore

was easier to identify. Also, publishers and media outlets were considered the last

port of call before distribution and were considered responsible for ensuring all

content followed the recommended guidelines (Pearson, 2000).


2.3 POWER-RESPONSIBILITY EQUILIBIRUM THEORY

The Power-Responsibility Equilibrium (PRE) theory is useful here to examine the

balance of power and the responsibility of the stakeholders in the advertising process.

Originating from studies in social science and psychology, the PRE framework was

developed to understand the connection between social power and social

responsibility (Emerson, 1962; Davis, Fredrick and Blomstrom, 1980). It has been

applied to various relationships in the business environment, such as franchisor and

franchisee (Vlosky, Wilson & Vlosky, 1997), the firm and customer (Lwin, Wirtz, &

Williams, 2007), organisations and their staff (Shenkar & Ellis, 1995) and more

recently consumer privacy and firms (Krishen, Raschke, Close, & Kachroo, 2017).

The PRE framework proposes that social power and social responsibility should

work hand-in-hand, in equilibrium as per Figure 2.1 below (Davis et al, 1980). This

theory suggests that the party with more power carries a greater societal

responsibility and obligation to create an environment where the less powerful party

feels confident that they can trust the other party (Laczniak & Murphy, 1993; Lwin et

al., 2007).

This model has been used to understand the relationship of power and ethical

responsibility and what can occur if there is abuse of this power, or if the equilibrium

of this power shifts. This theory suggests that if the more powerful party chooses

greater dominance and less responsibility over the other party, they are likely to lose

in the long term as the other party pushes (typically through government forces such

as regulation) back to lessen their power (Davis et al, 1980). This model

demonstrates that power holders can predict whether their relationships will be

damaged depending on their actions to abuse this power (Krishen et al., 2017; Lwin

et al., 2007).


Figure 2.1. Power-Responsibility Equilibrium Theory

2.3.1 Power-Responsibility Equilibrium Theory and Advertorials

Using this framework in the context of the relationship between stakeholders

(agencies, brands and publishers) and the consumer, we can identify that traditionally

the stakeholders have been the power holders. They held information about the

product and the power to persuade the consumer. With this power, the stakeholders

carried the ethical obligation and responsibility to provide truthful, accurate, and

transparent information to the consumer. Murphy (2009) suggests that social

responsibility implies that the power holder knows and is “conscious of the scope of

their responsibilities and is able to act on them”.

The use of advertorials disrupts the balance in the equilibrium of power and

responsibly tipping power even further away from the consumer in favour of the

stakeholders. By being less obvious and intentionally blurring the lines of advertising

and editorial content so that the reader is not always aware that the content they are

consuming is an advertisement, demonstrates reduced ethical responsibility (Spence,

Quinn & Dunn, 2011). This makes it more difficult for the consumer to make an

educated and well-informed decision (Kim & Hancock, 2017) (See Figure 2.2).

To keep the balance of power, print advertorial guidelines (as detailed above through

the ASM and APC) were introduced and regulated through industry bodies to protect

consumers and enable them to be able to identify advertorial content as an

advertisement (APC, 1996; Cameron, Ju-Pak, & Kim, 1996). By following these


guidelines the stakeholders demonstrate ethical responsibility and rebalance the

power-responsibility back into equilibrium. Further if one of the stakeholders such as

the agency or brand did not demonstrate responsibility by including a label, the

balance could be re-established through the publishers’ insistence that all advertorials

were labelled.

Figure 2.2 Loss of equilibrium - unequal balance of power and responsibility

2.4 THE ADVERTISING ENVIRONMENT HAS CHANGED

The advertising environment has changed dramatically over the last decade, due

primarily to the advancement of digital technology and the increased accessibility of

mobiles, tablets and rich media content. Technology has changed how consumers

connect, when they connect, and where they connect (Anderson, Steen, &

Stavropoulos, 2017; Labrecque, vor dem Esche, Mathwick, Novak, & Hofacker,

2013; Schultz & Schultz, 1998).

With greater access on the go, the Internet has become a fundamental part of our

daily lives for both work and pleasure, extending into every facet of our lives

(Anderson et al., 2017). We now go online for everything from searching for

information, for games and entertainment, to connect with others via social media, to

read blogs and forums, to share information with peers, and for commercial

transactions such as conducting business and shopping (Jothi, Neelamalar, & Prasad,

2011; Bright, 2012; Schultz & Peltier, 2013; Anderson et al., 2017; Wallace, 2014).

The Internet and social media have also changed how we communicate with each

other, how we engage and interact with brands, and how we expect to be


communicated with from brands. Traditionally communication from advertisers was

one-way, now communication is two-way and multi-dimensional, enabling

consumers to respond and connect more easily with brands (Berthon, Pitt, &

Campbell, 2008).

Marketers used to control their own marketing communication; now consumers are

influencing this delivery, often creating and distributing it themselves (Schivinski &

Dabrowski, 2016). Consumers are now very much part of the process and are

considered both consumers and creators of content using blogs, YouTube and other

social media platforms to share content (McMillan & Childers, 2017) With this

change, consumers now want to be engaged differently. They want advertising

content that informs, entertains and educates (McShane & Sabadoz, 2015; Schivinski

& Dabrowski, 2016; Stafford, Stafford, & Schkade, 2004).

2.4.1 Consumer empowerment

With consumers constantly connected, it has shifted the power dynamic between

producer and consumers. With immediate access to a wide range of information

about products and competition, consumers are now considered to be “well-informed

and armed with information” (Denegri‐Knott, 2006). This has empowered consumers

in the marketplace who are now arguably more dominant in the relationship. The

producer (advertiser) who previously controlled the product, the media environment,

and the information available to consumer is now driven by what consumer’s want,

when they want it, and how they want it, on their terms (Deloitte, 2014; Rust &

Oliver, 1994; Schultz & Schultz, 1998).

Consumer empowerment is defined as ‘the ability to exert power and influence in the

market’ (Adkins & Ozanne, 2005). It is also considered to be the ‘power to choose’

(Broniarczyk and Griffin, 2014; McShane & Sabadoz, 2015; Shankar et al., 2006).

Although some early marketing theory suggests that consumers have always had

power to demand goods and services and choose (Kotler et al., 2006), consumers

now hold more power in the relationship than before, and as a result are empowered

to demand more of brands.


Denegri-Knott identified four key strategies that enable consumers to become

empowered in the online environment (Denegri‐Knott, 2006). These include:

1. Control over the relationship – in the context of advertising, consumers can

choose to engage or ignore brands by following by or subscribing to channels

and pages, and conversely disengaging by following, blocking or

unsubscribing (Campbell & Marks, 2015).

2. Information - consumers can search and use information to improve their

purchase decisions, review opinions, and use it to question advertisers.

3. Aggregation - consumers can group together through forums or web

communities etc. with other like-minded individuals to discuss topics and

discuss issues.

4. Participate - consumers can participate and choose to create content

themselves. An opportunity that was not as easily available to them in the

offline communication environment.

A fifth strategy of self-liberation was added more recently by Kerr, Mortimer,

Dickenson and Waller (2012) suggest that consumers are empowered through self-

liberation. Through the freedom of sharing their views with others online, consumers

grow their social connection and social capital.

2.4.2 Advertising effectiveness online

While some of the earlier advertising methods used online such as display, banner

and pop up ads are still considered popular and frequently used online, their overall

effectiveness to cut through clutter and engage with consumers has come into

question (Baek & Morimoto, 2012; Cho & as-, 2004; Speck & Elliott, 1997a,

1997b).

On average it is estimated that a consumer will be exposed to anywhere from 4,000-

10,000 advertising messages a day (Simpson, 2017). This is resulting in consumers

feeling bombarded and irritated and avoiding advertisements they perceive as getting

in the way of what they are trying to achieve online (Baek & Morimoto, 2012; Cho

& as-, 2004; Kelly, Kerr, & Drennan, 2010).


Studies into ad avoidance have found that consumers are more likely to avoid

advertising if they feel that it is not relevant to them, if they are sceptical towards the

advertising medium, or if they have negative expectations about their experience

(Kelly et al., 2010).

To avoid advertising online consumers are increasingly filtering emails, using ‘do

not track’ programs, and ad-blocking software (Endicott et all, 2006; Yoo, 2009;

Borges, 2009; Johnson, 2013; PageFair, 2017) A report presented by PageFair in

2017 on the global usage of ad blockers revealed that approximately 615 million

devices were using ad-blocking software and that number is expected to continue to

grow. It is predicted that as ad blocker technology evolves that at least half of all

advertising online will be blocked from the consumers view within the coming years

(Budak, Goel, Rao, & Zervas, 2016).

Advertisers are well aware of the issues of advertising avoidance -because of

scepticism, reader irritation, a lack of perceived advertising relevance, or previous

negative experiences, and the increased use of ad blockers, and acknowledge that

these are key reasons for the lack success when advertising online (Baek &

Morimoto, 2012; Nielsen, 2012; Simpson, 2017; Kelly et al., 2010).

2.4.3 Changes in the publishing environment

Publishers have also faced their own set of challenges in recent years due to the

proliferation of the Internet and the fragmentation of channels both on and offline.

Once profitable publishers are now struggling with rapidly shrinking profit margins

from a loss in newspaper and magazine subscriptions as consumers move away from

traditionally printed publications to sourcing their information online (Bakshi, 2014;

Barthel, 2017; Einav & Lipson, 2015; Mitchell & Rosentiel, 2012).

The task of converting consumers from print to subscription based services online

has also proved challenging for online publishers as readers who once paid for

printed content are now consuming free content through blogs, free news sites, social


media platforms, discussion boards, and niche forums both from domestic and

international sources (Anderson et al., 2017; Bakshi, 2014; Herrman, 2016; Ponkivar,

2014).

Publishers such as News Corporation owned by Rupert Murdoch recently announced

massive losses in the UK and Australian due to dropping newspaper values, print

sales and a loss in advertising revenue (Mason, August, 2017). Recent reports from

the US also indicate that daily newspapers both digital and print are facing similar

struggles with reports showing an 8% loss, for the 28th consecutive year (Barthel,

2017).

In terms of reader satisfaction, publishers have grappled in recent years with

complaints from readers that media publications have a higher ratio of advertising to

editorial content and are irritated at paying for advertising content when they can

source similar content for free elsewhere (Rotfeld, 2006). Making it increasingly

difficult for publishers to make advertiser revenue and keep readers happy.

The loss to publishers has been exacerbated further by the loss of revenue from

advertisers who are choosing to spread their advertising spend across multiple

platforms and markets (Bakshi, 2014; Herrman, 2016; Matteo & Dal Zotto, 2015).

Earlier this year publishers in Australia announced a dramatic drop in spend from

advertisers for 2018 with magazine advertising down 42.5%, newspapers down by

36.4%, and advertising down on digital platforms by 27.6% (Kelly, 2018).

The combination of securing advertiser spending, the losses from print revenue

stream, the difficulty in converting consumers to subscription and the decline in

consumer satisfaction has placed increasing pressure on publishers to look for new

ways of monetization to stay afloat.


2.5 EMERGENCE OF NATIVE ADVERTISING

As consumers have become savvier and more powerful in the online environment,

they have also become more difficult to connect with. Consumers now want to be

engaged differently. They do not want overt sales tactics, and are not interested in

engaging with traditional forms of advertising content (Campbell & Marks, 2015).

They are looking for content that offers more value, which informs or entertains

(Harms, Bijmolt, & Hoekstra, 2017; Tutaj & van Reijmersdal, 2012).

Brands have come to recognise this and in response have moved towards utilising

more content-focused advertising strategies (Lieb, 2011; WARC Report, 2014). They

discovered they needed to be subtler in their approach by adapting their advertising

message and approach to the platform they are advertising on. For example in social

media, brands moved away from being more serious towards intentionally being

more playful and conversational as a way to engage and not annoy consumers

(Campbell & Marks, 2015).

In an attempt to find new ways to connect and engage readers, publishers were

forced to explore new options for monetization (Sahni and Nair, 2006, Sonderman

and Tran, 2013, eMarketer 2014). In 2011, publishers began to offer a new

advertising product that blends commercial messages into content that consumer’s

want. An approach publishers started referring to as native advertising (Matteo & Dal

Zotto, 2015). Soon after its inception, native advertising gained significant traction

across large publishers such as Huffington Post, Forbes, and Time Magazine.

Native advertising, like sponsored content and advertorials, uses a pull strategy that

aims to attract consumers through content that provides value and information they

are searching for (Ahrens, 2013; eMarketer, 2016; Native Advertising Institute,

2017; Fisher, 2017; WARC Report, 2014). By offering value readers are more likely

to click on the link or engage with the content (eMarketer, 2016).

Pull strategies are intentionally subtle in their message delivery to create demand and

encourage the customer to seek out the product (Kotler, Wong, Armstrong, 2005;


Kotler & Armstrong, 2012). Importantly, this strategy is only successful if the

content is interesting and of good quality (eMarketer, 2016).

In contrast, push strategies use more obvious tactics to present an advertising

message directly to customers to create demand for a product (Eder, 1998).

Examples include traditional forms including magazines, newspapers, and online as a

display ad in a social media feed or a web banner (Eder, 1998; Leggio, 2013).

Push and pull methods offer different advantages depending on the advertising

objectives. A key benefit of using pull messages is that it allows consumers to

control the degree of information they receive and can be a determinant of whether

consumers are open to the advertising message or reject it (Kelly, Kerr & Drennan,

2010; Schultz, 2008).

2.5.1 Why native advertising is popular

Native advertising has quickly become a popular advertising tool in recent years

because of the opportunities it presents brands and publishers (Harms et al., 2017).

To advertisers, native advertising is perceived to be the answer to advertising clutter

and avoidance issues. Native advertising increases engagement through offering their

audience content they want to read and are interested in, answering consumers needs

online for information and entertainment (Wasserman, 2013; Ponkivar, 2014; Jorner,

2017). Some have even suggested that native advertising isn’t even advertising, but

is simply content that consumers want (Vega, 2013).

Bahski (2014) offers his opinion for why he believes advertisers are rapidly adopting

native advertising. First, because consumers believe the content was written by an

independent source, the publisher, it is likely to be considered trustworthy and

therefore consumers are more “likely to read, share, and believe content”.

Secondly, because native advertising offers a new way for advertisers to present

advertising content in a way that is interesting, engaging and more likely to entertain

consumers. Native advertisements are designed to be more appealing both in terms of


content offered and look. Consumers have chosen to go to a particular website

because of the way the content is delivered both functionally and aesthetically in that

space. Cummins (2013) also confirms this idea suggesting that native advertisements

have a greater focus on delivering contextually relevant advertising in content that

adds to the consumer experience and doesn’t subtract from it.

And lastly Bahski (2013) believes that native advertising allows “advertisers to

influence the topics and themes that are covered by a publication”. This last point

suggests that brands and advertisers hold a level of power over the publisher. While

publishers have always relied financially on revenue from advertisers, recent

challenges experienced by publishers such as attracting paying subscribers, the

fragmentation of channels, and increased competition, have exacerbated this

dependence (Greenslade, 2016).

Native advertising potentially offers higher levels of engagement (Ponkivar, 2014).

A recent study which surveyed almost 4,770 people using eye-tracking technology,

revealed that on average consumers engaged with native advertising content 53%

more than traditional banner advertisements online (Sharethrough, 2013). And

because native ads are almost always written like an editorial or take a whole page

instead of just a small ad along the side or top, they are more likely to guarantee the

reader’s whole attention when they click onto the page (Bahski, 2014).

Because of the focus on content, native advertising also increases the likelihood of it

being shared and passed onto peers. Sharethrough (2013) found that 32% of

respondents said that they “would share [native ad content] with a friend or family

member” versus only 19% who would be willing to share a display advertisement.

From the publisher’s perspective, native advertising offers new hope to attract

advertisers and generate new revenue streams to claw back the massive losses from

their print streams (eMarketer, 2014; Probst, Grosswiele, & Pfleger, 2013).


2.5.2 What is native advertising?

Native advertising has evolved at such a rapid rate that a formal common definition

and conceptualisation of the approach has not yet been established. However, there

are various opinions and versions within industry and academic papers that offer

insight into what it is (Matteo & Dal Zotto, 2015).

The basic premise shared within industry is that native advertising, much like

advertorials, is commercial messages designed to appear as though they are “native”

or naturally part of the site they sit on (eMarketer, 2014). Content is created to be

contextually relevant to the page and surrounding content. It is designed to not

interrupt the reader’s experience, but instead add to it (Cummins cited in Ward,

2013; Matteo & Dal Zotto, 2015; Ponkivar, 2014). “This way advertising is

perceived as non-pervasive and hence primarily identified as informative content

rather than traditional advertising” (Matteo & Dal Zotto, 2015).

One of the most commonly quoted definitions within industry presented by the IAB

in 2015 suggests that native advertising is “paid ads that are so cohesive with the

page content, assimilated into the design, and consistent with the platform behaviour

that the viewer simply feels that they belong”.

Table 2.1 below presents some of the recent definitions used within industry and

academic papers to define native advertising.


Table 2.1 Native advertising definitions in use

Indu

stry

The Guardian (2013)

“Native advertising is the politically correct term for advertorial. Or rather it’s an upgrade, the digital version of an old practice”

SAP (Clark, via eMarketer, 2014)

“Native [advertising] is “brand journalism” and getting the people, the profiles and the personalities out there”.

Federal Trade Commission (FTC) USA (2015)

“Native advertising is content that bears a similarity to the news, feature articles, product reviews, entertainment, and other material that surrounds it online”

IAB USA (2015)

"Paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behavior that the viewer simply feels that they belong".

IAB Australia & AANA (2016)

“Paid for content that is assimilated to appear like surrounding editorial content in the online environment. These principals also incorporate native advertising distribution methods in automated content aggregator and content matching tools”

Forbes (2017)

“Native advertising in publications, otherwise known as “advertorial,” is paid content or advertising that is placed within part of a newspaper or magazine and intended to look like the other content around it”

Acad

emicPap

ers

Couldry and Turow (2014)

“Textual, pictorial, and/or audio-visual material that supports the aims of an advertiser (and is paid for by the advertiser) while it mimics the format and editorial style of the publisher that carries it”.

Campbell, Marks (2015)

“Native advertising is a term used to describe a spectrum of new online advertising forms that share a focus on minimizing disruption to a consumer’s online experience by appearing in stream”

Sweetser, Ahn, Golan, Hochman (2016)

“A tactic which blurs the lines between public relations, advertising and marketing”

Wojdynski and Evans (2016)

“An umbrella term used interchangeably with sponsored content, partner content and branded journalism” “The practice by which a marketers borrows from the credibility of a content publisher by presented paid content with a format and location that matches the publishers original content”

Sahni and Nair (2016)

“Native advertising is a format of advertising that mimics the other non-sponsored content on the medium”

Jiang, McKay, Richards, & Snyder (2017)

“Native advertising is an ad format that integrates brand messages into natural parts of the media environment in an attempt to make the content not look like an ad”


Examination of the above Table 2.1 demonstrates a lack of consistency among

industry and academic expert about what it is exactly; it does highlight several

recurring dimensions. 1. That native advertising is a paid form of advertising, 2, that

it is content focused, and 3, native advertisements are designed to fit the aesthetic of

the site.

2.5.3 Native advertising and other terms

Examination of the above table raises many questions about whether native

advertising is the same thing as sponsored content, branded content, or product

placement? Is it really a new idea? Or is it just a fancy name for an old tactic? Some

argue that native advertising is not a new idea, but is simply a “digital upgrade” of an

old concept born from the merging of advertorial concepts and social media (Coyne,

2014; Campbell & Marks, 2015; Matteo & Dal Zotto, 2015; Staplefoote, 2014).

The difference, according to several experts, is that native advertising is thought to

offer more value than advertorials to the reader through more relevant and highly

tailored content (WARC Data, 2014; Sagness 2014; Sophocleous, 2014). Other

suggestions include the idea that native advertisements are created with the intention

that readers will share the content with their peers to generate a buzz and to increase

reader engagement (Salmon 2013; WARC data 2014).

While advertorials are considered in many respects to be similar to native

advertising, the degree to which they are “camouflaged” is also thought to be

different. Native advertising is thought to be more seamless than standard

advertorials (Brenzel, 2014) sponsored or branded content (Sagness, 2014) and is

created specifically for one channel only both in terms of format and content and is

not able to be altered and reused for use on another platform (Mitch, 2013).

In terms of who creates native advertising native advertisements are viewed as being

produced by the publisher of the platform for a more seamless integration, whereas

advertorials are typically thought of as created by the brand (Sophocleous, 2014).


There are various opinions of what native is and how it is different to other terms in

use however they are often inconsistent and tend to vary according to whether they

are offered by journalists, agencies, brands or academics. Mitch (2013) suggests that

publishers love native advertising because “they can make it mean whatever they

want it to mean”.

The lack of a definition is causing confusion and is inhibiting native advertising’s

progression as an approach (Campbell & Marks, 2015; eMarketer, 2014; Lovell

2014, Mitch, 2013). While there is agreement on the basic premise of what it is, its

dimensions have yet to be formalised. A formal definition would propagate common

language between practitioners and scholars; would add to the consistency of

research, reporting, planning, and importantly regulation purpose (Borst, 2013;

Campbell & Marks, 2015).

Although Altimeter, the Interactive Advertising Bureau (IAB) and more recently the

Federal Trade Commission (FTC), have offered descriptions of what they believe

native advertising to be, they fail to specify how native advertising fits with other

forms of advertising and other publisher offerings.

This leads to the first important research question:

RQ1: What are the elements that define native advertising and make it unique to

other forms of advertising or publisher content?

2.6 CRITICISMS AND NEW CHALLENGES WITH NATIVE ADVERTISING

Although native advertising is being heralded as the answer to a myriad of publisher

and advertisers challenges, it is not without issue. Native advertising has received a

lot of criticism for being intentionally deceptive and misleading and abusing

consumer’s trust (Berry, 2014; Dumenco, 2014; Wasserman, 2013). Critics also warn

that native advertising is likely to lead to a media credibility crisis if people lose trust


in the publication sensing that editorial content is not independently written but

instead written with bias (McNamara, 2014; Schauster, Ferrucci, & Neill, 2016).

2.6.1 Risk for Deception

Native advertising’s effectiveness lies in its ability to blend seamlessly into

surrounding content making it difficult to be easily identified as an ad (Carlson,

2015). This is viewed as a “double edged sword”, with critics suggesting that it has

the potential to cause “harm” to consumers who are unaware that the content they are

consuming from the publisher is not the unbiased editorial content they assume, but

is instead an advertisement (Vega, 2013; Ponkivar, 2014; Taylor, 2017; Wojdynski

& Evans, 2016).

Balasubramanin (1994) suggests that when marketers use covert marketing strategies

to conceal the advertising nature of the content, they may intentionally or

unintentionally deceive a consumer into processing information differently than if

consumers were aware.

Friedstad and Wrights (1994) Persuasion Knowledge Model (PKM) suggests that

consumers consider the source when processing and decoding information from the

sender. If consumers recognise the sender as a seller, they process information

differently. A consumer’s persuasion knowledge is an important factor in helping

consumers interpret information and avoid being “fooled” into buying something

they don’t need (Taylor, 2017).

Appropriate disclosure may help the consumer identify that the content is an ad and

help them to process, cope, and respond to persuasion attempts from advertisers

(Friedsted and Wright, 1994).”

The Federal Trade Commission (FTC), a regulatory body in the USA, considers

deception to be advertising material that “is likely to affect consumers’ choices or

conduct regarding an advertised product or the advertising for the product,

irrespective of the medium”(FTC, 2007; Sahni & Nair, 2016).


Whether deception is intentional or not, studies have found that native

advertisements are not always obvious to the consumer (Campbell & Marks, 2015).

This has raised ethical questions around trust, and the potential for brands and

publishers to abuse and potentially lose a consumer’s trust (Garfield, 2014).

Previous studies show evidence of backlash when consumers feel they have been

tricked. Responses range from consumers developing less favourable attitudes

towards the brand (Craig, et.al, 2012) or distrusting of subsequent advertising

communication from the same brand (Darke & Ritchie, 2007) or worse, boycotting

products (Martin & Smith, 2008).

2.6.2 Risk for Reduced Trust

Abusing consumer trust has been highlighted as a key concern when using native

advertising (Lazauskas, 2015).

Trust is described as a multifaceted concept that includes dimensions of emotion,

cognition and behaviour and is central to both personal and business relationships

(Lewis & Weigert, 1985; McKnight & Chervany, 2000; Soh, Reid, & King, 2009). It

is necessary in a relationship when there is a “perception of risk that depends on the

actions of the other party” (Midha, 2012). For trust to occur there must be complete

confidence that the other party has integrity and is reliable (Moorman, Deshpande, &

Zaltman, 1993; Morgan & Hunt, 1994).

In advertising, trust exists only when a consumer has “confidence that advertising is

a reliable source of product/service information and willingness to act on the basis of

information conveyed by advertising” (Soh et al., 2009).

Trust has been found to improve a consumer’s ability to evaluate, process and

respond to an advertisement (Soh et al., 2009) as well as influence a customer’s

willingness and intention to engage and transact with a vendor online (Gefen, 2000)

and increase a consumers intention to revisit websites and to recommend the site to

others (Liu, Marchewka, Lu, & Yu, 2005; Midha, 2012).


Conversely mistrust has been found to breed further mistrust and is likely to lead to

the break down of commitment in relationship or complete loss of the relationship

(McDonald, 1981). Trust is an area that advertisers struggle to gain, as consumers

generally tend to distrust advertising (Ball, Manika, & Stout, 2016; Wang, 2006).

Native advertising has been criticised for threatening to destroy consumer trust for

the brand and also for the publisher if they discover the content they are reading is

not an unbiased piece, but is instead an advertisement (Hansen, 2017; Garfield, 2014,

McNarama, 2014).

2.6.3 Risk to Credibility

Native advertising borrows the credibility of a publisher’s original content to deliver

an advertising message. Native advertising is therefore likely to be better received by

the reader because they believe it to be the opinion of the publisher (Wojdynski &

Evans, 2016). Research has found that source credibility is strongly linked to positive

attitudes and behaviours from consumers towards an advertising message (Choi &

Rifon, 2002; Wu et al., 2016) supporting this idea and indicating why native

advertising is likely to be considered effective.

A consumer evaluates the credibility of advertising by evaluating the truthfulness,

bias and honesty of the advertising (Friestad & Wright, 1994; Soh et al., 2009).

Previous studies have found that increased trust and source-based confusion usually

leads consumers to trust the subject of the advertisement more than they would

otherwise if they knew it was an advertisement (Bakshi, 2014).

Nelson & Park (2014) found that a consumer’s perceived credibility of a source

reduces when they become aware of persuasion attempts by an advertiser through

covert marketing strategies. And importantly, even in instances where there is

appropriate disclosure a consumer’s perception of credibility lessens because of the

lack of perceived ethics around covert marketing strategies.


Wu et al (2016) suggests that there are two sources of source credibility that are

important to consider when using native advertising, - the advertiser (corporate or

marketer) and the media outlet - publisher of the content.

While damaging both the advertiser and publisher credibility is a likely possibility

when consumers realize that the content they are reading is actually advertisement,

Bahski (2014) suggests “because [publishers] existence is in danger, the current news

media are willing to take these risks in order to stay afloat” (Bakshi, 2014).

The above has highlighted that trust, deception and credibility are just a few of the

potential risks discussed within industry and academic literature that brands and

publishers are likely to face if they adopt a native advertising strategy. Little is

known however, about how the stakeholders view these risks and whether they view

them as an issue. Are the risks identified above consistent with what the stakeholders

believe are the biggest risks? Do they see them as a potential issue? And are there

other areas of concern? This leads to the second research question.

RQ2: What are the potential risks when adopting a native advertising strategy?

2.6.4 Difficulty with regulation and ethical responsibility

Unlike traditional media that is noticeably placed by an advertiser, native advertising

steps outside of the obvious advertising formats utilising methods, which are

deliberately more covert (Sahni & Nair, 2016). Extending over various platforms and

ad types making it difficult to identify as an advertisement, because it does not fit a

particular mould. While this can be seen a benefit for advertisers, it has added to the

complexity of regulating native advertising.

The topic of regulation has created a divide amongst advertisers. Some have called

for tighter regulation worried that native advertisements are likely to cause harm or

irritate consumers when they realise it is advertising (Bakshi, 2014) Whereas others

believe that over regulating it will impede the creativity and the effectiveness of the

advertisement (Sahni and Nair, 2016).


Adding to the complexity of regulation, unlike traditional advertising such as

newspapers or television, digital media is not limited to physical borders (Katsirea,

2016; Matteo & Dal Zotto, 2015) Consumers can access content immediately from

various markets nationally and internationally. Advertisers in Europe can run native

ads concurrently across various platforms within America, Africa and Australia

making extremely difficult to regulate.

Katsirea (2016) suggests, while consumers have welcomed access to a wealth of

content online, it has become a difficult problem for regulators who “are trying to

accommodate for new technology and the new market realities within existing

governance structures”. Self Regulatory Organizations, created in traditional media

environments, are bound by national boundaries, and have limited control in the

online advertising environment (Kerr, Mortimor Dickenson, Waller, 2012). This has

raised important questions about how native advertising should be regulated and

whether it is even possible to regulate through local regulatory bodies.

In 2016, the Federal Trade Commission (FTC) responded to criticisms about native

advertising releasing a set of guidelines for American advertisers. Guidelines

included suggestions for increasing transparency through the labelling of native ads

such as “sponsored content” or “paid advertisement”. Since its release, other regions

such as Australia and the UK, have proposed similar for labeling and transparency. It

is important to note that these are recommendations, not regulation.

Acknowledging the difficulty in policing this type of advertising, the FTC strongly

recommends that all advertisers be responsible for policing their own advertising,

and that advertisers need to consider their target markets when doing so. For

example, they should adjust their labelling/transparency so that they audiences is

aware it is an ad, particularly if they are advertising to children, or those who are

vulnerable (FTC, 2015, Knowles & Mudge, 2016).

However the Interactive Advertising Bureau (IAB) shared their doubts about some

elements of the guidelines saying, “While guidance serves great benefit to industry, it

must also be technically feasible, creatively relevant, and not stifle innovation,” Brad


Weltman, IAB Vice President of public policy stated. (As quoted in McPherson,

2016, p.9).

Despite the introduction of guidelines in 2015, recent studies have found two out of

five advertisers (37%) are choosing to ignore these guidelines opting instead to avoid

labelling causing confusing and increasing the difficulty in being able to identify the

content as an advertisement (MediaRadar Report in Forbes, 2017). Advertisers are

aware of the challenges in regulating this type of advertising and as a result some are

choosing to exploit the opportunity by pushing the boundaries of what is ethically

acceptable.

2.6.5 Native advertising and consumer power

The lack of transparency and difficulty in regulating native advertising has again

blurred the balance of power between consumers and advertisers, shifting the balance

back in favour of the advertiser. Without transparency, consumers arguably do not

have enough information to adequately make a judgement on the information they

are consuming and are essentially at the mercy of the advertiser.

Unlike advertorials which were regulated by the publisher, through managing font

size and consistent labelling standards across publications, native advertising

presents further challenges about how to do this when formats and style types do not

easily fit into a typical standard and are not always easily identifiable.

Commentators within industry have suggested that the covert nature of native

advertising is likely to cause a consumer backlash as they buck against advertisers

and media outlets likely resulting in a “crisis of credibility, and potentially an

economic crisis” (McNamara, 2014). To avoid this crisis, McNamara (2014, para.

18) suggests that it is in the best interest of advertisers and publishers to “pay

attention to self-regulation” and ethical standards.

The next question is, who should be responsible? Because there are many hands

involved at various stages of booking, designing, creating and publishing native


advertising, there may be less of a likeliness or desire to want to take on the ethical

responsibility. The unwillingness to take ethical responsibility is often referred to as

“passing the buck” (Drumwright & Murphy, 2004; Schauster et al., 2016).

The debate over regulating native advertising has raised several questions. In

particular, if format regulation is not feasible, then what should regulation of native

advertising look like? Who should be held ethically responsible, and how they should

be held accountable?

This leads us to the next research question:

RQ3: How should native advertising be regulated and who ethically should be


2.7 THE FUTURE OF NATIVE ADVERTISING

Opinions for the future of native advertising are predominately optimistic. Many

industry experts suggest that it will only go from strength-to-strength evolving and

adapting to different opportunities online. Experts predict that it is likely to continue

to grow in popularity and is likely to generate as much as 74% of future advertising

revenue in the coming years (DeMers; 2018; Gallagher, 2017; Jorner, 2017).

Some experts are quite specific in their predictions suggesting that we are likely to

see more native advertising being utilised in the form of video, as more publishers

with mobile feeds move towards offering native video opportunities (Keane as cited

in Armstrong, 2017; Gallagher, 2017).

However, others disagree with the suggestion that native advertising’s future is

bright instead suggesting that it is likely to be fraught with difficulty because of ad

blockers. De Mers (2018) predicts that as the technology behind ad blockers

continues to evolve, it is highly likely that ad blocks will start to pick up native ad

content and remove them from the view of the consumer. If this is true, this is

potentially even more of a threat given that ad blockers are rapidly being adopted by

consumers and are even tipped to become a default feature in Google Chrome in the


coming years (DeMers, 2018). If ad blockers threaten to remove content from view,

does native advertising have a future?

Some experts also predict that despite the previous backlash to native advertising we

are likely to see consumers become more accepting and comfortable with native

advertising content. With views towards the blurring of lines of “church and state”

becoming more acceptable and standard across publishing (Weiss, 2018). Further,

Faisal Karmal, Director Digital Business at CNN International suggests that the

blurring is not necessarily a negative thing, believing that going forward there is

likely to be “no difference between editorial and native” and that this isn’t a problem

as long as consumers are happy with the native content because it offers them a “true

value exchange” (Cited by in Forbes by Armstrong, 2017).

The above views for the future of native advertising demonstrate a very broad

spectrum of opinion ranging from the potential of rapid expansion to rapid

extinction. Opinions suggest that the advancement in technology is likely both add to

and take away from native advertising opportunities. How do the stakeholders view

native advertising progressing as an approach? Do they agree that it is likely to

continue in popularity or die off in the near future? This leads us to the final research

question:

RQ4: What is the future for native advertising?

2.8 SUMMARY AND IMPLICATIONS

This chapter has reviewed the literature relating the native advertising. Advertorials

an approach similar to native advertising was reviewed to understand how it was

regulated. The theory of Power-Responsibility Equilibrium (PRE) was introduced to

examine the relationship between the advertiser and the consumer and the

considerations for ethical and regulatory considerations.

Next the challenges publishers are facing in the changing online environment such

as losses to revenues streams, difficulty in attracting advertiser spend due to the


fragmentation of channels were examined. Also the difficulties brands are facing in

connecting with consumers due to advertising clutter and avoidance were examined.

The emergence of native advertising as a new approach in response to the challenges

faced by both advertisers and publishers was reviewed as well as the criticisms and

challenges related to both defining and regulating it.

Through examination of the literature and industry discussion various gaps were

identified which require further understanding. As a result, the following

overarching research question was developed to guide this study:


This will be explored through the four research key questions highlighted

throughout the literature review. Including:

RQ1: What are the elements that define native advertising and make it unique to


RQ2: What are the potential risks for brands adopting a native advertising strategy?

RQ3: How should native advertising be regulated and who ethically should be


RQ4: What is the future for native advertising?

The following chapter will outline the research methodology selected to explore these research questions, and provide justification for its selection.

Chapter 3: Research Design 39

Chapter 3: Research Design

3.1 INTRODUCTION

This chapter explains the research methodology adopted to explore the overarching

research question, “What is native advertising and what are the ethical and

regulatory considerations?”

Specifically, this chapter will:

• Outline the aims of this study

• Provide an explanation of the Delphi technique selected as the data collection

method for this research, and justification for its selection

• Detail the participants and the selection process used

• Present the data collection procedure

• Discuss the data analysis techniques; and finally

• Outline the ethical considerations and limitations of the Delphi technique

3.2 RESEARCH DESIGN

Native advertising has received consideration attention due to its capacity of

blending advertising content within publisher content. As such, much of the

academic research to date has focused on exploring native advertising in relation to

deception and credibility (Sahni & Nair, 2016; Wu et al., 2016), how consumers

process native advertising versus other forms of advertising (Jiang, McKay,

Richards, & Snyder, 2017), how native advertising is changing communication

(Wojdynski & Golan, 2016) and factors that impact native advertisings performance

(Harms et al., 2017).

To date, limited research has yet been conducted to understand native advertising

from the broader stakeholder perspective, specifically how publishers, agencies,


academics and brands perceive native advertising relative to other terms in use, and

importantly their view regarding ethical and regulatory considerations.

Given that native advertising is a relatively new term within digital advertising and

an emerging area of research it was considered appropriate that an explorative

research approach be taken to gain an in-depth insight into native advertising and its

underlying elements. Exploratory research designs seek to understand a subject area

or new phenomena where little or no previous knowledge exists (Polonsky & Waller,

2014; Schindler, 2006)

Through explorative investigation, researchers will gain a better understanding into

the subject area, develop concepts, and importantly create operational definitions

(Cooper and Schindler, 2008). Native advertising is an area that is not yet well

understood (Campbell & Marks, 2015). Scoping out basic concepts and developing a

general understanding of native advertising is an essential first step in setting the

scene for future research in this area as it is still within the early stages of

understanding it as a new term and application within advertising online.

To explore the research question “What is native advertising and what are the ethical

and regulatory considerations” it was imperative that the research method was able

to provide the following outcomes:

1. The ability to capture insights from expert stakeholders across various

parts of the world in different time zones and markets. This is important

because unlike traditional or mainstream media that is limited by

geography, online advertising (such as native advertising) can be utilised

by brands for domestic and international markets and across various

customer bases (Yang, 2016). Decisions to use native advertising made in

the USA or UK can impact brands in other regions.

2. The ability to explore and capture underlying assumptions and information

held by participants anonymously without judgement from other

participants (Hsu & Sandford, 2007). This was considered crucial to


extract honest responses and the mix of views from others in the group.

The literature revealed a lack of agreement and differences in opinion

about what native advertising is, and the ethical and regulatory

consideration. This research needs to have a robust discussion to identify

the different ideas and ensure all voices are heard.

3. Provide a framework to gain consensus on a definition for native

advertising and on the views and opinions regarding ethics and regulatory

considerations. There are diverse opinions across the various stakeholders.

4. An opportunity for participants to offer further insights as the research

progresses by allowing them to reflect and provide additional information,

enabling richer data collection. A simple survey or a single round of

interviews does not allow participants to consider other viewpoints or

encourage deeper reflection (Okoli & Pawlowski, 2004).

5. Time and cost efficiency. To increase the chances of initial and ongoing

participation the data collection method needed to be relatively straight

forward, not be time consuming, and too expensive to administer. Given

the high calibre of participants required for this study, it was likely that the

participants would hold higher-level positions rendering them time poor

and busy.

Taking into consideration the above criteria it was determined that the Delphi

technique was the most suitable for this study. The following section will explain the

Delphi technique and justification for its selection.

3.3 THE DELPHI TECHNIQUE

The Delphi technique is a data collection method that gathers information through

the use of open-ended questions given to a panel of experts over a series of waves or

iterations, interspersed with summarised information and feedback of opinions

derived from earlier responses (Dalkey & Helmer, 1963; Delbecq, Van de Ven, &

Gustafson, 1975; Linstone & Turoff, 2011).


Developed by the RAND Corporation in the 1950’s, the Delphi method is a popular

explorative qualitative and quantitative technique that uses a structured group

facilitation process to achieve consensus from a group of experts (Dalkey & Helmer,

1963; Linstone & Turoff, 2011; Richards & Curran, 2002).

While the Delphi method was initially developed to identify financial and

technological trends in the early 50’s, it has been applied in recent years within

various disciplines such as information technology, sales, and marketing research to

assist with planning, forecasting, and decision-making (Gupta & Clarke, 1996;

Kelley, 2007; Kerr, 2009; Linstone & Turoff, 2011; Richards & Curran, 2002)

The Delphi method is used primarily in instances where the issue is potentially

problematic or sensitive and offers a framework that allows participants to voice

their opinion without direct criticism or worry about how their opinion will be

received (Hsu & Sandford, 2007). This was valuable to this study, as the literature

review has shown a strong mix of opinions. This research design enables all

participants to voice their honest opinion without the influence of peers.

3.3.1 Justification for selection of the Delphi method

There are several key characteristics and advantages that are unique to the Delphi

method that deem it the most appropriate for this study.

• The use of an expert panel - In a Delphi study participants are not randomly

selected, but instead are purposely selected for their expertise on the topic

(Linstone & Turoff, 1975). Given the relative newness of the term native

advertising it was anticipated that many people might not yet be sufficiently

knowledgeable enough to answer the questions accurately. This technique

enabled the researchers to handpick the most informed experts for the panel

instead of using the general population to enable the collection of a broader

industry opinion (Linstone & Turoff, 1975, 2011).

• Provide a framework to gain consensus - The Delphi technique is useful

for areas that are particularly contentious or where the goal is to obtain the


most reliable consensus of opinion of a group of experts (Dalkey & Helmer,

1963; Kelley, 2007; Kerr, 2009; Murry Jr & Hammons, 1995; Okoli &

Pawlowski, 2004). While in-depth interviews offer the opportunity to extract

deep insights, they do not offer the option to gain consensus or feedback from

other participants. The data collection method needed to allow the sharing of

ideas and opinions to do so (Okoli & Pawlowski, 2004).

• The anonymity of participants and responses – anonymity ensures

participants are not influenced by the responses of other participants on the

panel. It allows them to express their honest and personal views that may not

necessarily be consistent with others on the panel (Dalkey & Helmer, 1963;

Goodman, 1987; Hsu & Sandford, 2007; Keeney et al., 2001).

• Waves for analysis. There is no cap on how many waves should be used for

collecting data. The researcher was able to determine this during the process

of analysis and data collection in driving consensus. This unique design

element provided the researchers flexibility to explore for as long as needed

to collect the necessary data and richer insights (Hasson et al., 2000). This

subsequent data collection waves enables the opportunity for deeper analysis

into areas of native advertising that may not have been obvious before the

study. An important consideration however, is the more rounds or waves that

are used; the more difficult it becomes to retain a high response rate (Keeney

et al., 2001). To counteract this and to ensure high participation, the

participants needed to be invested in the research topic (Keeney et al., 2001).

• Independent thought. The Delphi design reduces the effect of “noise”

during the group data collection process. Noise is the communication that

focuses on the group interests instead of the interests of solving the research

questions (Dalkey & Rourke, 1972). Noise can manipulate and distort

opinions and views of participants and reduce the manipulation or coercion to

conform or adopt viewpoints (Dalkey & Helmer, 1963; Dalkey & Rourke,

1972; Hsu & Sandford, 2007). With the high calibre of participants it was

likely that there would be dominant personalities within the expert panel

whose opinions could influence the views of participants if other group

research methods were used. The Delphi process enabled that all voices were


heard as individuals without influence and interruption as all are given equal

weight and importance (Goodman, 1987; Strauss & Zeigler, 1975).

• It is a qualitative and quantitative measure. The initial wave was

qualitative in nature. Requiring participants to provide detailed written

opinions in response to questions as well as the opportunity to change their

position on hearing other views. The second wave was quantitative in nature,

requiring participants to rank their agreeance to statements with a number

from 0 to 100. The combination of qualitative and quantitative measures

allows the researcher to delve deeper than with a purely quantitative study,

yet enables an objective analysis of the final rounds of data collected, free

from biasing effects (Dalkey, 1969; Hsu & Sandford, 2007; Landeta, 2006).

Additionally it not only measures consensus, but the strength of consensus

(Heiko, 2012).

• Participants do not need to be physically present for the research. Data

can be collected easily via email or phone, and is not constrained by needing

all participants to answer at the exact same time. Participants are able to take

their time to reflect on questions within a given timeframe (typically within a

week or two). With no need to be present for the research, the potential

participant pool is able to extend to all countries and time zones (Guzys et al.,

2015; Linstone & Turoff, 2011). This was particularly useful for this study as

it allowed the ability to capture insights and opinions from leading experts

from various regions across instead of being limited to only local experts.

3.4 LIMITATIONS OF THE DELPHI METHOD

While the Delphi technique offers many positives, it is not without shortcomings

(Dalkey & Rourke, 1972; Gupta & Clarke, 1996; Linstone & Turoff, 2011). These

limitations were recognised and taken into consideration when planning and

executing this research. These include:

• Participation –Given the high calibre of participants required for this study it

was likely they would be time poor and have demanding jobs, potentially

increasing the chance for a high drop out rate (Ludwig, 1997). To overcome


this, the data collection process was designed to be straightforward and

simple. Experts were offered a variety of ways to respond such as through

email or phone and were given ample time to respond. Further time was also

given if required.

• Repetitive waves – While this process can sometimes be viewed as

laborious, the cyclical nature of the Delphi technique increases the accuracy

and credibility of the findings (Hsu & Sandford, 2007). To help the experts

see value in the repetitive process, the importance of using the Delphi method

was explained before they agreed to participate.

• Question design – To ensure depth of information was extracted from the

participants, special consideration was given to how the questions were

designed. Semi-structured open-ended questions were used to avoid yes or no

answers, and encourage the participants to expand on their answers (Linstone

& Turoff, 2011).

3.5 DELPHI STUDY PARTICIPANTS

The most important aspect of a Delphi study is choosing appropriate experts for the

Delphi panel. Success is considered largely dependent on the quality of the expert

panel because it determines the quality of the final results (Hsu & Sandford, 2007;

Okoli & Pawlowski, 2004).

Given that native advertising is fairly specific area within digital advertising online,

it was important that the participants selected were knowledgeable enough about

native advertising to adequately answer the questions to the degree required. Panel

selection is considered extremely important for a Delphi study and should be

constructed to include those who are well informed and keenly interested in this area

(Kerr, 2009; McKenna, 1994). As such, utilising a purposive sampling strategy was

considered appropriate for this study.

A key consideration when using the Delphi is to ensure a heterogeneous sample is

used to reflect whole spectrum of opinions (Keeney, Hasson, & McKenna, 2006).

To ensure a variety of perspectives were considered for this study participants were


selected from a variety of different roles, regions, and industries including

academics, brands, agencies and publishers.

Experts from the following areas were deemed the most important to include in this

research:

Academics:

It was important to consider the global opinions of the leaders of research in the area

of native advertising. This included a spread of researchers and professors who were

currently teaching and researching native advertising.

Academics were selected if they were highly regarded in their field, heavily involved

in advertising forums focused and interested in native or digital advertising, or had

presented in conferences about online or native advertising. Additionally a selection

of universities from around the world was considered to see whether views varied in

different regions.

Agencies:

A mix of full-service advertising agencies and smaller boutique digital agencies from

around the world specialising in native advertising were recruited for the expert

panel. All participants invited had solid experience in and were frequent active

contributors to discussions on native advertising.

Publishers:

Publishers were selected based on their regular interaction with and production of

native advertising. Those who were frequent publishers of native advertising and

who had extensive experience within the publishing industry were invited to

participate.

Brands:

A mix of smaller and larger brands that regularly use native advertising as part of

their online digital strategy were invited to participate. It was important that the

brand experts had extensive experience in their field particularly in the areas of


digital advertising and traditional advertising methods. Brands with all budget sizes

were encouraged to participate to ensure a spread of perspectives.

3.5.1 PANEL SIZE

There are various opinions regarding the ideal number of participants for a Delphi

study. Unlike a traditional survey that relies on sample sizes large enough to

statistically represent a larger population, a Delphi study relies instead on expert

opinion and consensus of opinion (Okoli & Pawlowski, 2004).

The literature varies in what number is considered an appropriate number of

participants on the expert panel. While some literature suggests a sample anywhere

between 10-18 is the ideal (Delbecq et al., 1975; Okoli & Pawlowski, 2004) others

suggest as few as seven to 10 is appropriate to gain consensus (Linstone & Turoff,

1975). For this research, an invitation was extended to over 50 participants, with the

aim to secure a minimum of 10 expert participants.

3.5.2 PARTICIPANT SELECTION PROCESS

As outlined above, success is largely dependent on the quality of the expert panel.

Given this importance, a rigorous selection process developed by Delbecq et al,

known as the Knowledge Resources Nomination Worksheet (NRNW), was used to

ensure experts met the criteria (Delbecq et al., 1975).

The selection process for this study included the following steps:

Step one - establishment of expert criteria

This step involved establishing the relevant disciplines, skills, abilities, and required

knowledge deemed most important for panel selection. For this research it was

important that expert panel members met the following general criteria:

• Had work experience of 10-plus years within the marketing and advertising

industry.

• Were well versed in digital advertising and marketing and either conducted

research in or around this area regularly.


• Were regular users, creators and or producers of native advertising content

for small and large-scale international and local brands.

• Were from a mix of large size internationally recognised brands, agencies,

academics, and publishers.

• Were a mix of smaller boutique award winning native advertising specialist

agencies.

• Wererecognisedasexpertsintheirfieldbypeersorwithinindustry.

• Werefromvariousgeographicregions–suchasEurope,AsiaPacific,

Americas.

• Representedamixofindustry/academic/brand/agency/publisher

views.

Step two - populate

Using the above criteria a list of names was collated by searching advertising and

marketing journals, industry publications, native advertising groups and forums

within LinkedIn and other social media platforms, and researching brands that were

active users of native advertising. A list of over 100 names was generated.

Step three - nominate

This step involved using the snowball technique, asking experts to nominate names

of other experts they deemed appropriate to participate in this study. This step was

not utilised initially, but was used later after the first round of invitations were

extended when it became difficult to connect with the preferred experts. This step

proved useful to gain access to several high calibre participants.

Step four - rank experts

Expert names were then ranked according to their ability, experience, region, and by

preference. Careful consideration was given to ensure a good spread of participants

across each group (academic, publisher, brand, agency). Gaining access to contact

details proved challenging with many email addresses and contact phone numbers

difficult to find. A lot of initial contact was made via LinkedIn groups and forums

specifically created to discuss the topic of native advertising.


Step five - invite experts

The final step involved contacting experts via phone and email to formally invite

them to participate in the research. The invitation included details about the purpose

of the research, the importance of the research, and what their participation would

involve.

The response rate to the initial invitation varied. Some experts were very excited by

the prospect of the research and enthusiastically agreed it was an important area to

study and either agreed or offered their apologies due to busy schedules or inability

to be involved. Others did not respond, or were keen but unable to participate due to

having signed non-disclosure agreements with their employers.

Of all the groups invited to participate, the agency experts expressed the most

interest to participate and have their voices heard. All agreed it was an important area

that needed more consideration and research.

3.5.3 FINAL PARTICIPANT PANEL

Despite the large amount of positive feedback and eagerness to be involved in the

study a large majority of potential participants were unable to take part due to

restrictions with non-disclosure agreements. Additionally, many were simply too

busy to be involved in the study. Given the high-calibre of candidates required for

this research, the initial process of securing an expert panel took longer than

anticipated, and as such required some flexibility in terms of timing between waves.

The final panel consisted of 14 native advertising experts from various backgrounds,

roles, and regions. According to the literature a minimum of seven participants is

considered an appropriate size for a Delphi panel, while others suggest a minimum of

ten (Delbecq et al., 1975; Linstone & Turoff, 1975).

The mix of participants was considered crucial at this stage to ensure a variety of

voices and opinions were accounted for in each wave, and to increase reliability and

generalisability of data.


To account for candidates withdrawing from the study and to ensure an adequate

responses rate, invitations were extended to a higher number of potential participants

than was deemed necessary. The initial was sent to 27 participants; the final panel

consisted of 14 experts. As anticipated there was a degree of withdrawal at each

wave of the process. The largest drop out occurred in Wave One. This will be

explained in more detail in the following section.

The following table details the final expert panel:

Table 3.1. Final Expert Panel

FINAL EXPERT PANEL

Title Group Region Years Experience

Chief Brand, Marketing Strategy

Global Agency Asia Pacific

20 +

Digital Director Agency Europe 20 +

Head of Digital Department Agency Europe 20 +

Head of Digital Agency Agency Asia Pacific 10-20

Chief Executive Officer Agency USA 20+

Director Agency Agency Europe 20 +

Content Director Agency Asia Pacific 10-20

Lecturer/ Professor Academic Asia Pacific 10-20

Lecturer/ Professor Academic Europe 10-20

Lecturer/ Professor Academic Asia Pacific 20 +

Producer Digital Content Publisher Asia Pacific 10-20

Digital Integration Manager Publisher Asia Pacific 10-20

Regional Brand Manager Brand Asia Pacific 10-20

Digital Content Specialist Brand Asia Pacific 10-20


3.6 DATA COLLECTION, TIMELINE AND INSTRUMENTS USED

The Delphi method collects data over a series of waves or iterations in order to

facilitate the group process and consensus. The number of waves is determined by

whether a consensus is achieved, though typically this occurs over two or three

waves (Hasson et al., 2000; McKenna, 1994). Each wave varies slightly in the

process in terms of questions asked and participant responsibilities.

After each wave, it is expected that the variance between responses will gradually

decrease, as the group converges in thinking, resulting in a consensus (Rowe and

Wright, 1999).

3.6.1 DATA COLLECTION PROCESS

The following diagram maps the basic steps for this study from the literature review

through to the findings and discussion.


Present findings and discussion

Data analysis and interpretation

Conduct wave 2 research

Collate and analyse data

Conduct wave 1 research

Research industry experts and recruit panel

Develop questions (outlined below)

Determine best research approach

Define the issues (outlined in chapter 1)

Literature review (outlined in chapter 1)


Wave One

The Delphi study officially commenced in September 2016 with Wave One sent to

27 experts who had agreed to participate.

In Wave One, the experts were sent a questionnaire (see Appendix A) by email and

asked to provide detailed written responses to ten open-ended questions generated

from the literature review.

Open-ended questions are considered the cornerstone of the Delphi study as they

extract specific information about the area of research (Custer, Scarcella, & Stewart,

1999; Hsu & Sandford, 2007). Open-ended questions enable the researcher to draw

richer responses that may not otherwise be able to be extracted with a simple rating

scale or other method. In this study the questions were constructed to encourage the

experts to elaborate and identify key areas relating to the study topic that they felt

were important (Martino, 1983).

Participants were given two weeks to reflect and answer before submitting their

responses via email. Wave One took longer than originally mostly due to participants

requiring more time to respond due to work commitments.

Wave One saw a reduction in panel numbers from 27 to 14 participants for various

reasons. Some dropped out due to their inability to answer the questions adequately,

others were too time poor, and several were bound by non-disclosure agreements

with their employer.

Once all the responses were received, the author’s names were removed, and answers

were collated and analysed by question. The majority of responses were typically

two - three sentences per question. Key statements were then extracted.

A copy of the collated responses was also sent to an independent researcher who also

analysed and extracted key responses by question. Two researchers were used in the

analysis process to increase reliability and credibility of the findings, and to reduce

potential bias from the researcher. Inter-code reliability is an important step as it


helps to eliminate weak or overlapping coding and check for consistency with

meanings (Burla et al., 2008).

The analysis of the two researchers was compared and contrasted. Minor

discrepancies were identified and resolved at this stage. Final statements were then

selected and organised by question headings to form the next round of questions for

Wave Two. A total of 126 statements were extracted for use in the Wave Two

questionnaire.

See appendix A for Wave One questionnaire

See appendix B for Wave One responses

See appendix C for Wave Two questionnaire

Wave Two

In this wave, participants were contacted via email and asked to review the

statements extracted from Wave One. This stage was important as it encouraged and

facilitated the “narrowing down” of opinions. The panel was given the anonymous

transcripts of all experts and are forced to review their earlier answers and reflect

further about other opinions and ideas (Brown, 1968; Sackman, 1974; Dickinson-

Delporte & Kerr, 2014). Personal views were then either confirmed on review, or

shifted and changed as the collective anonymous responses of others were

considered.

Narrowing down occurred at this stage through the process of participants rating

their “agreeance” to the statements extracted in Wave One.

There are various measures available to rank agreeance to determine consensus in a

Delphi study. Rating scales of anywhere from 3-9 points are often used, as well as

the method of asking participants to provide a percentage of their agreeance to the

statement (Miller, 2006; Ulschak, 1983; Linstone & Turoff, 1975; Mullen 2003;

Okaoli & Pawlowski, 2004).


This study used the current Delphi decision rule outlined by Kelley, which asks

participants to rate their agreeance to statements from 0-100 rule (Kelley, 2007; Kerr,

2009). Participants were asked to rate their level of agreeance to each statement with

a score of 0-100. 0 representing – “strongly disagree” through to 100 representing

“strongly agree”.

While there is no set rule for a Delphi study about what percentage is considered

reaching consensus, the literature offers various recommendations. Green et al

(1999), suggest that 80% or higher is deemed a consensus amongst most

respondents, in contrast Loughlin and Moore (1979) suggest that only 51% or greater

is required for consensus. Kelley (2007) meets in the middle suggesting that 70% is

an appropriate percentage. This study followed Kelley’s recommendation that

consensus is achieved if the groups average response is 70% or greater (Kelley,

2007; Kerr, 2009).

Participants were given two weeks for Wave Two to reflect on their answers before

submitting their responses via email.

Responses took a total of five weeks to collect before collation of final results. This

wave proved much slower than the first wave. A further two participants dropped out

due to work commitments. This was expected given the calibre of participants are

typically time poor. Despite multiple efforts to contact them and provide a way for

the experts to respond it proved too difficult on their part.

As in step Wave One, the next step involved collating responses according to group

(agency, publisher, brand, academic). The use of an independent researcher was

again utilised at this stage to review the findings and ensure data accuracy, increase

validity and reliability of the data collected (Shenton, 2004).

Scores were calculated for frequency, mean, mode, and extreme outliers. This is a

common method for analysing scores of Delphi studies to identify areas of consensus

and to identify opinions that are extreme, or might potentially skew the results.

(Hasson, Keeney & McKenna, 2000; Murray & Jarman, 1987).


Each group was then analysed against other group members, groups against other

groups, by region, and as a whole. Patterns of agreement and disagreement between

groups and key themes were identified. It was then determined that the appropriate

level of consensus had been achieved between the expert panel and a third wave

would not be required for this study. A third wave is only required if there is still a

high level of disagreement and no clear consensus (Linstone & Turoff, 1975).

3.7 DATA QUALITY

This section explores the data quality for this study. These points were considered

and addressed prior to and throughout this study.

• Reliability – To increase reliability of the data this study used multiple waves

to collect data. This encouraged the participants to reconsider their own

opinions and the opinions of others thereby increasing in the accuracy and

reliability of results (Rowe & Wright, 1999).

• Construct validity – Questions were validated as participants were asked to

confirm their interpretation of the topic during the process of questioning

(Okoli & Pawlowski, 2004).

• Representativeness of the sample –The aim of this study was to capture

insight into the broader stakeholder view and gain consensus from experts

from various regions around the world. Delphi studies are primarily not used

to represent a particular population, but instead are utilised to express an

expert opinion in answering a difficult question or drilling down to deeper

issues (Okoli & Pawlowski, 2004).

• Attrition – Participant drop out is a possibility when conducting repetitive

waves of research. However, given the lower number of participants required

on a Delphi expert panel, it allowed us to pinpoint and follow up with those

participants who needed more time or had an issue with the process (Okoli &

Pawlowski, 2004).


• Data richness - The combination of multiple waves of data collection and

participant anonymity added to the richness, quality and creativeness of the

data extracted from this study (Linstone & Turoff, 1975).

• Bias - Bias is possible if the researcher does not take the steps to

appropriately construct the questions and ensure careful analysis of the data

(Hallowell & Gambatese, 2009). The following steps were taken to avoid

bias in this study,

• An independent researcher was utilised at Wave One and Wave Two

to review, analyse, and compare findings.

• A combination of qualitative and quantitative data was collected. This

reduced the subjectivity and added to the objectivity of the findings

(Okoli & Pawlowski, 2004).

3.8 ETHICAL CONSIDERATIONS

The following ethical issues were considered before, during and after this study:

• Participant anonymity is vitally important to ensure rich data is collected and

to protect individuals.

• Responses of participants remain confidential

• Written consent was received by all participants before the commencement of

this study

• To ensure no vested interests, participants were not paid to participate but

instead were volunteers

• Participation did not cause harm

• An ethical clearance application was made and approved by QUT before

commencement of this study. QUT Ethic’s approval # 1600000205.

• Participants were provided ethical clearance details and emergency contact

phone numbers in case of any issues.


3.9 CONCLUSION

This chapter outlined the methodology used for the research and provided

justification for its selection. The participants, data collection and analysis

procedures were outlined and discussed. Ethical and the data collection limitations

were outlined in detail.

Chapter 4: Results 59

Chapter 4: Results

INTRODUCTION

This chapter will present the analysis and interpretation of the data collected from the

expert panel over the two waves of the Delphi study to answer the overarching

question:


This was explored through the following four research questions:

1. What are the elements that define native advertising and make it unique to

other forms of advertising and publisher content?

2. What are the potential risks for brands adopting a native advertising strategy?




This chapter will present the results according to the four key research questions.


4.1 RQ1: WHAT ARE THE ELEMENTS THAT DEFINE NATIVE ADVERTISING AND MAKE IT UNIQUE TO OTHER FORMS OF ADVERTISING?

In the attempt to stimulate discussion and identify the elements that are unique to

native advertising and clarify how similar and different it is from other terms in use,

the panel was asked to consider a commonly used definition for native advertising

put forward by the Interactive Advertising Bureau (IAB):

“Paid ads that are so cohesive with the page content, assimilated into the design and

consistent with the platform behaviour that the viewer simply feels that they belong”.

Specifically, the expert panel was asked in Wave One to provide feedback and

suggestions for key elements that they believed were missing from the above

definition for native advertising.

The experts identified problematic aspects of this definition including the idea of

belonging, the hard sell and intrusiveness, as well as the need for clear identification

of native advertising.

Several experts had issue with the idea that consumers would feel that the

advertisement “belongs”. One expert offered: “I don’t agree necessarily that the

viewer thinks the advert “belongs”. That statement could be interpreted as

patronising the user. Lots of users will be very aware that the native advert is exactly

that – an advert despite it being very consistent with the content/design of the page”.

However, it was thought to be important that, “the user shouldn’t feel the content is

intrusive”. In fact, one respondent suggested that native advertising had “an element

of storytelling without the hard sell”.

Others felt it was important to add that advertisements should be “clearly

signposted” and this was something missing from the offered definition.

In total 13 qualitative statements with suggestions of identifying elements for native

advertising were presented to the expert panel in Wave Two. Of these statements,

only one statement reached consensus as outlined in Table 4.1 below.


“Ads should be tagged so that the viewers are aware that content is paid for but still

in line with the aesthetic of the site” (80.9% consensus).

This statement was supported across each group (publishers 100% agreeance, agency

80% agreeance, academics 76.6% agreeance and brands 70% agreeance). By

agreeing to this statement, the expert panel in effect agreed to and identified three

unique elements of native advertising.

These are:

1. Native advertising is paid content;

2. Native advertisements is clearly labelled as an advertisement;

3. Native advertisements should fit the aesthetic of the site.

Table 4.1 Defining elements of native advertising Question1.WhataspectsoftheabovedefinitiondoyouAGREEwith?WhataspectsdoyouNOTagreewith?WhatkeyelementswouldyouADD?

Overall% AverageByGroup%

STATEMENTSTHATACHIEVEDCONSENSUS Consensus Publishers Agencies Brands Academics

Adsshouldbetaggedsothatviewersareawarethecontentispaidforbutstillinlinewiththeaestheticofthesite

80.9 100 80 70 77

Another statement that achieved consensus in another question further supports this

statement and provides insight into the connection between native advertising and

sponsored content.

“Native advertising should be sponsored content that is sitting on a site, that looks

and feels like the sites primary offering - whether that’s news, vids, music, photos

etc.- but is clearly tagged up to let readers/consumers know that the content is

supported commercially”.

This statement further strengthens the notion that native advertising should be

“tagged” or labelled, is paid, and blends with the aesthetics of the site.


Examples of native advertising To further clarify what native advertising is, the expert panel was asked to identify

types of advertisements they consider to be native advertisements and types that they

think are incorrectly referred to as native advertisements.

Wave One generated 22 possible examples of what native advertising is, and 12

examples of what they believe native advertising is not. A summary of these are

detailed in Table 4.2 table below with the rate of consensus for each. Further details

can be found in Appendix 1.

Table 4.2 Examples of native advertising Question3:Whataresomeexamplesofnativeadvertising?Forexampleisanarticleonanewssitenativeadvertising?Whataboutpaidsearchads,video,tweetsandotheradsthatappearonsocialnetworksites?

Overall% Average%ByGroup

STATEMENTS Consensus NoConsensus Publishers Agencies Brands Academics

Sponsoredcontent 74.5 55 85 65 80Sponsoredcontentthatissittingonasite,thatlooksandfeelslikethesitesprimaryoffering-Whetherthat’snews,vids,music,photosetc.-clearlytaggeduptoletreaders/consumersknowthatthecontentissupportedcommercially. 73.3 100 60 80 70Brandedcontent 70.9 55 75 65 80Productplacement 68.1 45 92.5 30 76.6Onlineadvertorials 61 25 72.75 60 70Ad’sthatareliterallyplacedinstream 53 25 57.25 50 70Advertorials 51.9 10 70.25 65 46.6Promotedtweets 48 30 60 30 56.6Videos 44.7 65 25.5 55 50Music 44 50 31.25 55 50Sponsoredposts 44 30 57.5 30 46.6Infeedads 37.2 30 52.5 30 26.6


Analysis of the two questions indicate that native advertising does not appear to be

restricted to any specific advertising type, but instead is identifiable by whether it

includes the elements unique to native advertising as outlined in the previous section:

is labelled, is paid/supported commercially, and blends with the aesthetics of the site.

This finding was determined by examining the responses that reached consensus

versus those that did not. Those types of messages that did not achieve consensus

such as “music,” “photo”, “tweet “ “news” “in feed ads” etc. did not include a

description beyond the advertisement type.

The statements that achieved consensus did not focus on a type of advertisement, but

instead on the type of content or the nature of the advertisement.

• “Branded content” (70.9% consensus)

• “Sponsored content” (74.5% consensus)

A comment offered in Wave One that did not achieve consensus in Wave Two

provides further insight into why many of the examples may not have achieved

consensus. It suggests that native advertising has more to do with content and not

the location or placement of the ad.

“For example, if there was an article on a news site and that article was about the

number of home burglaries in the area and how those had increased and then some

safety solutions (i.e. the brand motivated content), then yes, it is native. It looks like a

piece of news, contains burglary statistics etc.”

This point reiterates the important element of aesthetics and blending contextually

with the site where the advertisement resides.

An analysis of the differences in opinion between expert groups revealed that the

only examples of native advertising that the publishers supported were two

publisher-centric statements. An example, “Anything written or controlled by an

editorial team which would be written or published without advertising alignment”.


This statement achieved 100% agreement by the publisher group but only 48%

agency agreement, and 35% brand agreement).

The publisher group was also strongly opposed to the suggestion that an advertorial

is an example of native advertising rating only 10% agreeance to this statement. In

contrast, agencies (70%) and brands (65%) tended to agree with this suggestion.

Confusion with other terms

In an attempt to distinguish native advertising from other terms such as sponsored

content, branded content, and advertorials, the experts were asked to define these

terms and rate their agreeance to these definitions. They were also asked to provide

suggestions for how native advertising is different to these terms.

Qualitative responses from Wave One revealed a diverse mix of opinions. Some

suggested that native advertising; sponsored content and branded content is, “the

same thing”. Whereas, others felt that “Content marketing is a catch all term”. One

expert suggested, “I like to view it on a scale, starting with advertorial, sponsored

content, branded content, native advertising, where the whole point of native is to

make it as relevant as possible for both the audience and the brand”.

In Wave Two the experts reached consensus on how to define sponsored content,

advertorials, and branded content, but were unable to reach consensus on how native

advertising is different to these terms (as outlined in Table 4.3).


Table 4.3 Consensus achieved for definitions of other terms

Question2:Sometimesnativeadvertisingisusedinterchangeablywithtermssuchassponsoredcontent,brandedcontent,andadvertorials.Howisnativeadvertisingsimilaranddifferenttotheseterms?


STATEMENTS Consensus Publishers Agencies Brands AcademicsSponsoredcontent

Contentonapublisherswebsite,notthebrandwebsite 78 90 65 85 83.3

Advertorials

Looksmorelikeanadvert,inthatittriestopersuade.Itismoreobviousandithasanadvertisingmessage

73 80 78.7 70 63.3

BrandedContent

Ismoresubtleandreliesonthestrengthofthehostcontent/brandalongwithanassumptionthattheassociationwillleadtoapositiveviewofthepayingclient

75 60 89.7 85 60

Appendix D provides an overview of the statements that did not achieve consensus

Sponsored content achieved consensus when suggested that it was “content on a

publishers website, but not a brand website” (78% consensus). Advertorials were

considered to “look more like an advert [than the other terms], in that it tries to

persuade. It is more obvious and is has an advertising message” (73% consensus).

And Branded content was considered to be a “subtle form of advertising that relies

on the strength of the host content/brand along with an assumption that the

association will lead to a positive view of the paying client” (75% consensus).

Overall there were quite a few statements that did not reach consensus that offered

suggestions on how to define each of the terms and how native advertising was

different. The lack of agreed statements demonstrates the confusion and differences

of opinions around the existing terms and what they are specifically.

Further there was also confusion about whether native advertising was the same as

sponsored content, an example of sponsored content, or whether sponsored content

was an example of native advertising. The expert panel provided contradictory

responses. The below figures (4.1. 4.2. and 4.3) demonstrate the differences in

opinion.


Figure 4.1. Native advertising and sponsored content share the same definition

Figure 4.2. Native advertising is an umbrella term

Figure 4.3. Native advertising is an example of sponsored content

Branded Content Advertorial

Sponsored Content

Sponsored Content

Branded Content Advertorial

Native Advertising

Native Advertising

Native Advertising = Sponsored Content


Summary of Key findings RQ1:

• The most widely agreed definition by the IAB did not achieve consensus

because of the concept of ads “belonging” and the notion that consumers

would “feel” an ad belongs to a website. It was also missing the

important element of “tagging”.

• The expert groups identified three key elements that are unique to native

advertising: 1. It is paid advertising, 2. Is clearly labelled as an

advertisement, and 3, should fit the aesthetic of the site/platform in

which it resides.

• Experts struggled to clearly distinguish other terms and as well as how

native advertising was different from these terms. They were confused

about whether they were the same thing, or if native advertising was an

umbrella term, or whether native advertising was an example of

sponsored content.

• Various ad types were explored to determine what types of

advertisements are considered to be examples of native ads.

Interestingly, native advertising is not limited to one type, but instead is

only considered a native advert when it encompasses the elements listed

above. Native advertising is focused on content and blending contextually

and should not be an obvious advertisement, but should be “tagged” or

labelled.

4.2 RQ2: WHAT ARE THE ANTICIPATED RISKS FOR BRANDS ADOPTING A NATIVE ADVERTISING STRATEGY?

In Wave One the experts were asked to outline the risks associated with using native

advertising. The experts identified 12 potential risks in Wave One. The key areas of

concern were misleading consumers, disrupting the value of the publishing

environment, and annoying consumers.


Analysis of the results from Wave Two highlighted a strong concern across all expert

groups that native advertising’s greatest risks include misleading consumers (87%

consensus) followed closely by the potential “backlash if you [the brand] appears to

be too covert” (79%). Additionally, concern was expressed that “readers may feel

deceived by the brand” (75%) and “turn the audience off” (74%). See Table 4.4.

Table 4.4 Risks associated with native advertising Question8:Whatdoyouthinkaretherisksassociatedwithusingnativeadvertising?


STATEMENTSTHATACHIEVEDCONSENSUS Publishers Agencies Brands Academics

Misleadingconsumers 87 65 92.5 85 100

Backlashifyouappeartoocovert 77.5 60 82.5 80 90

Readerfeelsdeceivedbythebrand 75 50 87.5 75 75

Riskturningofftheiraudiences 74.5 75 86.25 50 75Biggestriskisthatthecontentsucks 70.5 75 81.25 50 60

STATEMENTSTHATDIDNOTACHIEVECONSENSUS

Consumersbeingmis-sold 68.5 50 76.25 55 85Becausethereisnocurrent"standard"whenitcomestonativeadvertising,consumerswillbeofferedavarietyofdifferentversionsandthusbecomemorescepticalastowhattheyarebeingserved

65 75 65 45 75

Theconsumercouldbemistakenintothinkingtheproduct/serviceisendorsedbythepublisher

64 55 77.5 60 50

Annoyingconsumerswithlessrelevancethanneeded 62 50 92.5 65 10

SEObecauseGooglecanconsideritapaidlinkresultinginmanualpenalty

61.11 50 87.5 75 75

Disruptingthevalueofthepublishingenvironment 54.5 50 51.25 70 50

Risksforbrands/advertisersistheabilitytotrack,generaterightreach,deliveryonKPI'sandROI's

49.5 45 61.25 50 30

One expert offered, “If people figure out they've been duped, they are upset. Not only

at the advertisers, and the media, but all advertising and media in general”

The risk of creating content that “sucks” (70.55% consensus) rated quite high as a

key concern for agencies (81%) and the publishers (75%) who are responsible for

developing and creating the content for the brand. Interestingly, brands didn’t feel


this was an issue (50%). Is that because they are in control of the brand message?

Academics (60%) also didn’t appear concerned by it. One expert explained that

“creating content that sucks”...“can easily happen with native advertising if it is not

given enough attention” by those responsible for creating the content.

While many of the risks highlighted in Wave One did not achieve consensus, such as

annoying consumers, consumers being mis-sold, and consumers mistaking the

product/service as endorsed by the publisher, they did achieve high scores (between

62-69% agreeance) which demonstrates that they are an important consideration

across the expert groups. These are detailed in the Table 4.4.

The area deemed the lowest risk was the ability for advertisers and brands to track or

generate the right reach or delivery on KPI’s (49%).

An analysis of the expert groups revealed that each group has different concerns.

Interestingly the risk of disrupting the value of the publishing environment (55%

agreeance) was more of a concern to the brands (70% consensus) than it was to the

publishers (50% agreeance). Brands are also not concerned about turning off

audiences (50% agreeance) but are concerned with misleading audiences (85%

agreeance).

Conversely, publishers are moderately worried about misleading consumers (65%

agreeance), and less about deceiving readers (50% agreeance), and disrupting the

value of the publishing environment (51.25% agreeance), but they are worried about

the risk of turning off audiences (75% consensus) and that consumers will become

sceptical of other content that isn’t native advertising because there is no native

advertising standard (75% consensus).

Interestingly, all of the expert groups except for the publishers, identified that there

was a high risk with “SEO, because Google can consider a paid link resulting in

manual penalty” (academics 75%, brands 75%, agencies 87.5% agreeance).

Because the publishers only viewed this as a moderate risk (50% agreeance) this

statement did not reach consensus at only 61.1% agreeance across all groups.


Another statement that also did not reach consensus was the idea of consumers being

mis-sold. Agencies (76.25% agreeance) and academics (85% agreeance) considered

this to be a risk when using native advertising, whereas publishers and brands were

not concerned.


• The greatest risks when using native advertising include: Misleading

consumers, turning off audiences, producing poor content and deceiving

readers

• While may risks did not achieve consensus they did achieve fairly high

scores which indicates that there are quite a few considerations when

using native advertising

• Publishers, brands and agencies are concerned about different areas of

risk. Publishers worry about turning off consumers and consumers

becoming sceptical, whereas brands and agencies are most worried about

misleading audiences and readers feeling deceived by the brand.

• Interestingly brands were more worried about the risk of disrupting the

publishing environment than publishers.

4.3 RQ3: HOW SHOULD NATIVE ADVERTISING BE REGULATED AND WHO SHOULD ETHICALLY BE RESPONSIBLE FOR THIS?

Regulation and responsibility

The experts were asked to nominate who they consider should be responsible for the

regulation of native advertising to ensure that it doesn’t offend or is misleading.

Specifically, the experts were asked to nominate whether they believe the brand,

publisher, or agency is responsible for regulation. They were also asked if a separate

regulatory organisation should be responsible for regulating native advertising.

Results are outlined in Table 4.5.


Table 4.5 Responsibility for regulation of native advertising

STATEMENTS Overall% AverageByGroup%

Question6:Whoshouldberesponsibleforregulatingnativeadvertisingtomakesurethatitdoesn’toffendorismisleading?Thepublisher?Theagency?Thebrand?Theself-regulatoryorganisationthatregulatestraditionaladvertising

Consensus Publishers Agencies Brands Academics

Publishers,producers,agenciesandclientsshouldallselfregulateiftheyproduceordistributeit.

89 100 85 75 100

Publisher 81 100 62.5 80

100

Question7:Howimportantisitforpublishers/brands/agenciestodifferentiateforconsumersthatnativeadvertisingispaidadvertisingfromnon-advertisingcontent?

Importantthatthereaderdoesnotfeeldeceivedormislead 87 100 80 80 95

Extremelyimportant,transparencyiskey 80.5 100 73.5 80

75

One expert commented, “Self Reg. Organisations, and Professional bodies (e.g.

TCC, MFA and IAB) and Govt. should educate the advertising industry and media

industry about regulatory information. In addition, the media also have

responsibility to review information from professional bodies and self-regulatory

organisations and Govt.”

In fact most respondents felt a sense of responsibility, one media expert offered, “All

media professionals have an overriding responsibility to ensure commercial

messages are legal, decent, honest and truthful regardless of the medium or tactic

used.”

Overall, consensus was reached in Wave Two in favour of shared responsibility in

the self-regulation process. The statement, “publishers, producers, agencies and


clients should all self regulate if they produce or distribute it” achieved consensus of

89% across all groups.

Interestingly, the experts also agreed that although all groups are responsible, the

final responsibility of regulating native advertising content should lie with the

publishers (81% consensus). “The publisher is ultimately the owner of all of the

content they create, so they should be self-regulating it”.

This statement was strongly supported by publishers, (100% agreeance), brands

(80% agreeance) and academics (100% agreeance) but was not as strongly supported

by agencies (62.5% agreeance) who were more in favour of equal responsibility

across all three groups (85% agreeance).

Transparency is important

To further explore the regulatory and ethical considerations related to native

advertising, the stakeholders were questioned about their views on the importance of

identifying native advertising as paid content. The statements that achieved

consensus on transparency are detailed in Table 4.6.

Wave One exposed various opinions. One expert provided insight into the view for

not distinguishing native advertising content from non-paid content. Suggesting,

“I'm in favour of allowing people to advertise products to their audience without

indicating that they are being paid to do so. The Internet has done away with any

argument that we should maybe control things in this way. Just like it has done with

copyright in a lot of cases and individual privacy etc. If somebody has been smart

enough to gather an audience that somebody else is willing to pay to be in front of,

good luck to them”.


Table 4.6 Importance in identifying native advertising as a paid advertisement Question7:Howimportantisitforpublishers/brands/agenciestodifferentiateforconsumersthatnativeadvertisingispaidadvertisingfromnon-advertisingcontent?


STATEMENTS Consensus Publishers Agencies Brands AcademicsImportantthatthereaderdoesnotfeeldeceivedormislead 87 100 80 80 95

Extremelyimportant,transparencyiskey 80.5 100 73.5 80

75

This study revealed that the majority of experts were in favour of labeling as a means

of differentiating Native Advertising. Consensus was achieved across all expert

groups agreeing that it is “important that the reader does not feel deceived or

mislead” (87% consensus). And again, it is “extremely important, transparency is

key” (80.5% consensus).

One expert offered, “I feel it is important. We need to treat consumers with respect.

We need to identify the source of the information, otherwise we are misleading”.

Another echoed this view; “It is absolutely essential that we have a situation where

consumers always know an ad is an ad. Then it is no longer a native ad, and instead

is merely a well placed ad”.

And another, “Ethically, consumers should be able to differentiate paid vs. non-ad

content”

These views support previous findings that the experts believe native advertisements

should be labeled and clearly distinguished as paid content. It is also strongly linked

to the risks about misleading and the potential to turn off consumers identified in the

previous section.


Process for creating and approval of native advertising

To better understand regulation considerations for native advertising, the experts

were asked to discuss their views on who should be responsible for the creation,

writing and approval processes for native advertising content. The statements that

received consensus are outlined in the Table 4.7.

Table 4.7. Responsibility for creating and approval of native advertising content

Question5:Whoshouldberesponsibleforcreating,writingandpublishingthecontentfornativeadvertising?Thebrand?Theagency?Thepublisher?Isthereanapprovalprocesstomakesurethecontentmeetstherequirementsofnativeadvertising?


STATEMENTS Consensus Publishers Agencies Brand AcademicsAgenciesshouldensurethatthecampaignmatchestheirownethicsandrepresentsgoodvaluetotheirclient

87.5 90 96.2 55 100

Publishershaveanoverridinglegalobligationfortheadstheycoverandtoensurethecontentisrelevanttotheiraudience

80.9 79 74.5 85 100

Approvalprocessistheresponsibilityofallthree–thebrand,agencyandpublisher

78 90 77.5 45 100

Thereshouldbeacollaborationbetweenallpartiesinvolved 72 65 90 65 50

Thepublisherofthecontent,withguidancefromtheagencyandbrand 71 85 62.5 95 50

Thepublishershouldhavetheultimatecontroloftheproductionofthecontentfromideationtopublishing

54 90 42.5 70 25

This study has identified that the creation of native advertising content is a highly cooperative process between brands, agencies and publishers. The statement “There should be a collaboration between all parties involved” achieved 72% consensus. This was achieved primarily because of the agency group’s strong agreeance to this statement (90%) versus brands (65%) publishers (65%) and academics (50%) moderate agreeance to the statement.

While this statement does not offer insight into how the work is divided between the groups, it does highlight that all parties consider that various parties are required for the production of the content in some form.


The exact process of how native advertising content is created was not identified in this study; however, the experts indicated that internal processes exist to facilitate the process. One expert detailed that in his experience, the “Brand provides very clearly brand architecture, guidelines, and objectives. Agencies are to create, write publish to input on how to best fit the content to their platform, and launch”

While the responsibilities each group share some similarities there are slight

differences between each. Table 4.8 displays a break down of responsibility by

group. Responsibilities were extracted from the statements that received consensus in

Table 4.7.

Table 4.8. Responsibilities by group to create native advertising Group Responsibilities

Publisher • Primarily responsible (in essence leading) other groups in creating and writing

content with guidance from agency and brand

• Final approval of creative, design and written elements

• Collaborate with agency and brand to create and write content

• Publish content on their site

• Carry the overriding legal obligation for the advertisements they cover

• Ensure the content is relevant to their audience

• Regulate content to ensure it is not misleading

Brand • Collaborate with agency and publisher to create and write content

• Approval of creative, design and written elements

• Brand architecture, guidelines, objectives


Agency • Approval of creative, design and written elements


• Ensure the campaign matches the agencies own ethics and represents good value

for the client

• Collaborate with publisher and brand to create and write content

Importantly while this study has identified that the process of creation and approval

is the responsibility of all three, overall the experts agree that the publisher carries

the bulk of the responsibility both in driving the creation process and the overall


legal obligation. “Publishers have an overriding legal obligation for the ads they

cover and to ensure the content is relevant to their audience” (80.9% consensus).

One publisher offered his views in Wave One, “The publisher should have the

ultimate control of the production of the content, from ideation to publishing.

Creative elements from a brand or an agency can be discussed and incorporated

when genuine and relevant to the content and the user experience. At [publisher] we

only publish content produced out of the partner studio team for native content. Our

clients are allowed two rounds of approvals to ensure we meet client objectives.

And another, “Ultimately the editor or owner of the publishing platform should be responsible for what is published. If an agency wanted to submit copy, this would be considered and potentially edited by the editor. Nobody would give an ad agency carte blanche to publish an "article" directly onto a respected site. Equally, nobody can stop them from adding native advertising as article/blog comments where possible and done cleverly this can elicit results”

Interestingly, while the publisher was nominated by all stakeholder groups as the party most responsible legally there was no consensus reached when the stakeholders were asked if the publisher should have ultimate control over the process from ideation to publication of the process of native advertising (54% consensus). This statement was rejected by agencies (42.5% agreeance) and academics (25%)


• While all groups agree that each is responsible there is a belief that

publishers hold the primary power and the final responsibility for

approval of the native advertising content.

• The creation of native advertising is considered to be a collaborative

process between the agency, brand and publisher. It is viewed as a

shared responsibility and is not owned by any one party. There is strong

disagreeance to the idea that it is owned by the publisher despite

literature suggesting that it was created in response to diminishing print

revenue streams, but there was agreeance that the publisher should have

the final responsibility.


• Transparency was a key concern amongst the expert groups to ensure

readers do not feel deceived. The importance of “tagging” or labelling

native advertisements was discussed repeatedly.

4.4 RQ4: WHAT IS THE FUTURE FOR NATIVE ADVERTISING?

Native advertising is used to counter savvy customers and add value, not because

of ad blockers

To determine how native advertising is likely to evolve in the future, it was first

important to establish the reasons behind why native advertising is used. Experts

were asked to comment on whether they believed native advertising is used to

counter advertising avoidance online, and if brands are using native advertising as a

strategy against ad blockers. The statements that achieved consensus are detailed in

Table 4.9.

With regard to advertising avoidance, findings indicate that, yes, native advertising is

often used to connect to consumers and break through advertising clutter. The

following statement “A key objective of using native advertising is to use the best

platform to best reach consumers and be able to differentiate in a very cluttered

market, so not so much considered about ad blocking”, reached 77% consensus

across the expert groups.


Table 4.9 Native advertising and ad blockers

Question10:Doyouthinkyouthinknativeadvertisingisbeingusedtocounteradvertisingavoidanceonline?Arebrandsdeliberatelychoosingnativeadvertisingoverotherformsofonlineadvertisingasastrategytocounteradblocking?


STATEMENTS Consensus Publishers Agencies Brands Academics

Nativeadvertisingisbeingusedmainlybecausetheyknowit’sthebestwaytoreachtheirconsumer-byaddingvalue,andmakingyourcommunicationavalueexchange

77% 95% 82% 55% 73%

Keyobjectiveofusingnativeadvertisingistousethebestplatformtobestreachconsumersandbeabletodifferentiateinaveryclutteredmarket,sonotsomuchconsideredaboutadblocking.

77% 95% 89% 50% 66%

Idon’tthinkitisaconsciousdecisiontocounteradblocking,ratherIthinkitsadvertisersrespondingtoconsumersbeingmoresavvyanddemandingmoreintelligentformsofadvertisingratherthanjustaplainolddisplayadwhichtheycanignore.

75% 95% 74% 85% 56%

Idon'tthinkthemainmotive[forusingnativeadvertising]isawaytodealwithadblocking

70% 75% 92% 70% 40%

However with regard to ad blockers, findings indicate that using native advertising is

not a main motive for using native advertising (70% consensus).It extends beyond

this to engagement and adding value. One expert commented, “Initially I think this

is why there is a considerable interest in native advertising but it’s also the

engagement with relevant audiences”

And another “Yes they’re doing it to avoid ad blocking, but moreover they’re doing

it because they know it’s the best way to reach their consumer – by adding value, and

making your communication a value exchange”

Many of the respondents comments echoed the same sentiment that while native

advertising is sometimes used to counter ad blocking, it doesn’t appear to be the

primary reason for using native advertising as a strategy. Interestingly however,


academics disagree with this statement (40% agreeance).

Overall, consensus was achieved for the following statement: “I don’t think it is a

conscious decision to counter ad blocking, rather I think its advertisers responding

to consumers being more savvy and demanding more intelligent forms of advertising

rather than just a plain old display ad which they can ignore” (75% consensus).

Native advertising is often utilised because “it’s the best way to reach their

consumer - by adding value, and making your communication a value exchange”

(77% consensus). This statement achieved a strong consensus across all groups

except for brands who only offered 55% agreeance to this statement.

Further, this study identified that a “key objective of using native advertising is to use

the best platform to best reach consumers and be able to differentiate in a very

cluttered market, so not so much considered about ad blocking” (77% consensus).

Again, this statement was strongly supported by all groups except brands who only

offered 50% agreeance to this statement.

The future of native advertising

Findings indicate that overall most experts believe native advertising is an important

and ongoing area of growth within digital advertising.

In terms of how it is likely to evolve in the future, experts predict that as technology

develops we will continue to see better, more accurate targeting and optimisation

through data (75% consensus), and that the way to drop cookies on readers that go

from the content to the ads will be developed (74% consensus). The statements that

achieved consensus are detailed in Table 4.10.

How native advertising is used is also predicted to evolve further, with experts

suggesting that how brands share stories will likely change (87.9% consensus)

moving towards becoming more dynamic, particularly on social media (69.9%).

Additionally, we are likely to see a new hierarchy of format types/cost structures

evolve (79.4% consensus).


Table 4.10 The future of advertising

Question9:Howdoyouseenativeadvertisingcontinuingtoevolve?(Format,platforms,itsuseetc.)


STATEMENTS Consensus Publishers Agencies Brands AcademicsAstechnologyevolves,howwepresentcontentandstoriesaboutbrandswillalter.

87% 90 89.75 70 100

Asnativeadvertisingbecomesmoreandmorecommon,therewillneedtobeahierarchyofformattypes/coststructureswiththekeytothisbeinginthewayinwhichthecontentinamplified.

79% 90% 76% 65% 100%

Bettertargetedandoptimizedthroughdataandresponses 75% 65% 65% 80% 100%

Theabilitytodropacookieonreadersthatgotothecontentfromthead 74% 95% 60% 80% 80%

Usingownedchannelsmorepredominantlyratherthancontentreferralplatformsorpaidforaudiences.

70% 85% 76% 40% 75%

Moredynamiccontentonsocial 69% 65% 79% 40%

85%

Interestingly, there is a belief (70.5% consensus) among agencies, academics and

publishers that brands will “move towards using owned channels more

predominately instead of content referral platforms or paid for audiences”. Brands

however, disagree with this statement (40% agreeance). If this statement is true, this

raises questions about what this means for the future of native advertising. Does this

eliminate the need and use of native advertising in the future? Or would native

advertising as a concept evolve?


• The key objectives for using native advertising are to counter savvy

consumers who are demanding more intelligent forms of advertising

from brands, and not because of ad blockers as predicted in the

literature.


• Native advertising is also used because it is the best way to reach

customers, and add value in the communication exchange between

the reader and brand.

• Native advertising is about using the best platform to best reach

consumers and differentiate the ad message in a very cluttered

market.

• Native advertising is predicted to have a strong future. It is predicted

that technology will alter how brand stories and content are shared

and presented in the future.

• It is predicted that native advertising will become more targeted and

optimized through data and responses as technology evolves.

4.5 SUMMARY OF KEY FINDINGS AND CONCLUSION

This chapter has presented the results from leading experts around the world to

further understand what native advertising is and identify the ethical and regulatory

considerations from the broader stakeholder perspective. In summary this study

found:

Understanding native advertising

• The experts did not agree with the most widely agreed definition for native

advertising presented by the IAB. Highlighting their disapproval of the word

“belonging” and idea that consumers “feel” something towards a native

advertisement.

• There is high degree of confusion amongst the experts as to how to

distinguish native advertising from other terms such as sponsored content,

advertorials and branded content. However they did identify and agree to

three elements that are unique to native advertising. These include: It is paid

advertising, It identifies as an advertisement, and the advertisement is

consistent with the aesthetic of platform where it resides.

• Various ad types were explored to determine what types of advertisements

are considered to be examples of native ads. Interestingly, native advertising

is not limited to one type, but instead is only considered a native advert when


it encompasses all three elements listed above. Native advertising is focused

on content and blending contextually and should not be an obvious

advertisement.

Risks and ethical considerations

• The experts identified several potential risks that should be considered when

using native advertising. These include the potential to: mislead consumers,

turning off audiences, producing poor content and deceiving readers.

• This study identified that there are different risk considerations between the

different groups. In particular brands and agencies tend to be concerned more

about consumer-centric risks such as misleading audiences and deceiving

readers, where as publishers tended to be worried about the turning off their

audience and the possibility of producing “bad” content.

Regulation

• There was strong support across all groups for native advertising to be self-

regulated. There is a belief that publishers, producers, agencies and clients are

all responsible if they produce or distribute native advertising.

• While all groups agree that each is responsible self-regulating there is a belief

that publishers hold primary and the final responsibility for approval and self-

regulation of native advertising content.

• The creation of native advertising is considered to be a collaborative process

between the agency, brand and publisher. It is viewed as a shared

responsibility and is not owned by any one party. There is strong

disagreeance to the idea that it is owned by the publisher despite literature

suggesting that it was created in response to diminishing print revenue

streams.

• Transparency was a key concern amongst the expert groups to ensure readers

do not feel deceived. The importance of “tagging” or labelling native

advertisements was discussed repeatedly.


Reasons for using native advertising

• The key objectives for using native advertising are to counter savvy

consumers who are demanding more intelligent forms of advertising from

brands, and not because of ad blockers as predicted in the literature.

• Native advertising is also used because it is the best way to reach customers,

and add value in the communication exchange between the reader and brand.

• Native advertising is about using the best platform to best reach consumers

and differentiate the ad message in a very cluttered market.

Future for native advertising

• The experts predict that native advertising has a strong future and will

continue to evolve in format type and offering. It is likely to become more

dynamic. It is also predicted that technology will alter how brand stories and

content can be shared and presented in the future.

• It is predicted that native advertising will become more targeted and

optimized through data and responses

The next chapter will present a discussion on the key findings and discuss the

implications of these findings for practitioners and theory and offer suggestions for

future research.

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Chapter 5: Discussion

5.1 INTRODUCTION

Native advertising has quickly become an important part of the digital suite of

advertising tools within the online market place. Globally it is estimated that

approximately $59.35 billion dollars will be invested towards this approach in 2018

in the hope that it will offer a higher level of engagement with their target market

(PWC report cited in Niekerk, 2017).

Yet limited research has investigated native advertising from the perspective of the

different stakeholder groups. The purpose of this study was to unpack and explore it

further, looking first to understand what it is and how it is both similar and different

to other terms currently in use. And secondly to investigate the stakeholder’s view of

the ethical and regulatory responsibilities during the process of creating and

publishing native advertising content using theories relating to power and

responsibility, consumer empowerment. And finally, their views on the risks such as

credibility, trust and deception associated with native advertising.

Chapter One presented an introduction to the concept of native advertising, the

purpose behind the research, and provided a general direction for this study.

Chapter Two explored current and relevant literature relating to advertising within

the online environment, identified gaps in the literature and outlined proposed

research questions. It also investigated native advertising’s emergence and

importance, and how it may have impacted consumer empowerment. Theories

related theories relating to consumer empowerment and the power-responsibility

equilibrium theory were introduced to explore native advertising and similar

approaches such as advertorials.

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Chapter Three provided an outline of the methodological approach and justification

for the Delphi technique.

Chapter Four presented the results according to the four research questions.

This final chapter seeks to interpret, evaluate and discuss the results in connection to

the reviewed literature, and the theoretical model of the Power-Responsibility

Equilibrium and risk. Implications for theory, regulators and practitioners will also

be presented.

5.2 KEY THEMES FROM THE STUDY

The overarching research question that has guided this study is:


In the previous results chapter the four key research questions were used to organise

results. These four questions were:

1. What are the elements that define native advertising and make it unique to


2. What are the potential risks when adopting a native advertising strategy?




The subsequent analysis of the research results led to the emergence of several key

themes. These themes include:

1. Different stakeholders, different priorities,

2. Power,

3. Responsibility,

4. Risk.

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5.3. DISCUSSION

5.3.1. DIFFERENT STAKEHOLDERS, DIFFERENT PRIORITIES

Although consensus was not achieved for a definition for native advertising, this

study identified three key elements that the stakeholders consider to be unique to

native advertising. These include:

1. Native advertising should be clearly labelled as an advertisement

2. Native advertising is paid content

3. Native advertising should fit the aesthetic of the site.

While some of these elements are arguably not unique to native advertising,

importantly knowing these elements helps narrow and identifies a starting point for

further research into a definition. These elements also help to distinguish native

advertising from other similar approaches.

In investigating how native advertising might be defined, it became clear that

reaching consensus on other statements was not going to be achieved. This study

identified that each of the different stakeholders- advertisers, brands, publishers, and

academics, view native advertising differently. Each has different priorities and

desired outcomes for the implementation of native advertising and as such see native

advertising from different perspectives. The differences in priorities might explain

why so many different definitions exist with industry and literature and why there

has been confusion and difficulty in reaching consensus for a specific definition for

native advertising.

Vroom’s (1964) Expectancy Theory suggests “individuals, acting through self-

interest adopt courses of action perceived as maximising the probability of desirable

outcomes for themselves” (Isaac, Zerbe, & Pitt, 2001). Applied to this research, we

can identify that it is likely that some stakeholder groups may have a vested interest

in ensuring native advertising is defined, or perceived in a particular way to satisfy

their needs, whereas others may not be as motivated or need to define it because it

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does not impact their desired outcomes. This study identified that publishers

priorities were focused on generating revenue, brands priorities were focused on

finding ways to connect with consumers, agencies priorities focused on creating

strategic value, and academics were focused on critiquing and informing industry

practitioners, and policy makers.

Publishers – Priority to generate revenue

This research suggests that publisher’s priorities for using native advertising are

primarily finance driven. They view native advertising as way to generate revenue

from brands. Native advertising is a service they can offer, as they own the platform

and have access to the audience. Publishers also view native advertising as way to

produce new content for their readers in the hope of establishing and increasing

readership, which is extremely important to them (Probst et al., 2013).

When publishers were asked how they viewed advertorials, product placement, and

sponsored posts in relation to native advertising, publishers strongly advocated that

native advertising was different to other modes of advertising. Suggesting that

advertorials “Look more like an advert, in that it tries to persuade. It is more obvious

and it has an advertising message” another commenting that they view “sponsored

content, branded content and advertorials are far more flexible and accommodating

in terms of brand mentions with the copy of the content – native advertising should

not do this unless there is a relevant and genuine link from the content to the brand

URL”

It is in a publisher’s best interest to present native advertising as a new concept,

rather than agree that it is an advertorial that has been around for years. Further,

because advertorials have been typically positioned in print or even on television,

perhaps online publishers are not as familiar with advertorials as other stakeholders.

By positioning native advertising as a new advertising product, publishers are more

likely to generate interest and offer new hope for brands and agencies in their attempt

to connect with consumers.

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Brands – Priority to Connect

Brands priorities are focused largely on finding ways to increase consumer

engagement, generate brand awareness and drive sales (Harms et al., 2017). This

study identified that brands primarily use native advertising to connect with savvy

consumers and counter ad blockers. They understand that their consumers are

searching for different, more intelligent forms of advertising rather than the types of

advertising they have become accustomed to, and as such brands know they have to

utilise different methods to connect with them (Fisher, n.d.; Eliasson, 2017).

The Uses and Gratifications Theory (UGT) offers a framework to understand why

people seek out specific media to satisfy needs, applied to this study, consumers visit

specific sites to seek gratification in the form of content that is either entertaining or

informative (Harms et al., 2017; Severin & Tankard, 2001; Tutaj & van Reijmersdal,

2012). Brands are aware of this and have a strong understanding of what their

consumers are interested in, where they interact, and the type of content they

consume. They also know that consumers visit specific sites because of the type of

content offered and the value they can receive from that site. Brands understand that

they by adding their content into the mix through native advertising they can become

part of and control some of the conversation with consumers.

As such, brands view native advertising as a vehicle to connect with their consumers

in a more intelligent way on platforms they are visiting.

Agencies – Priority of Strategic Value Agency’s priorities are focused on representing their clients (the brand’s) interests

through developing and implementing successful campaigns to meet their clients

sales and marketing objectives (Bergen, Dutta, & Walker Jr, 1992; Hackley &

Hackley, 2017).

This study found that agency motivations for using native advertising are to cut

through advertising clutter, to counter ad blockers, to connect with savvy customers,

and more importantly, as a way to add value. Agencies tend to view native

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advertising as more than just an advertising vehicle; they view it strategically as part

of a bigger picture to deliver value in the communication exchange with consumers.

According to marketing literature, value is considered to be an attribute or

characteristic of a product or service that either exceeds a customers expectations or

enhances the consumers experience or improves their lifestyle (Walters & Lancaster,

1999). Providing value has also been found be a critical element when businesses

attempt to establish and maintain relationships with customers (Ravald & Grönroos,

1996). In the context of native advertising, value is provided to the consumer

through the delivery of quality content that extends beyond a basic advertising need

and offers the consumer additional information or entertainment that the consumer is

looking for.

In terms of how they define native advertising, agencies don’t view it as a new idea,

but instead as an evolution or combination of several advertising approaches –

product placement, advertorials (online and print), branded and sponsored content.

How native advertising is defined doesn’t appear to serve any interests for the agency

and therefore they aren’t as concerned with ensuring that it is clearly separated from

other approaches, unlike publishers. However they do acknowledge that native

advertising is not exactly the same as the other approaches and has some differences.

Academics - Priority to Critique and Inform Academics priorities differ from the other stakeholder groups in relation to native

advertising as they are removed from the need for financial outcomes. Their priority

is to understand native advertising, critique, analyse and inform industry and policy

makers.

How academics view native advertising is consistent with the agencies view. They

don’t see native advertising as a new idea, but rather as an evolution and combination

of existing ideas. They have a strong understanding of the different types of

advertising approaches and how each operates. They also have no need to define

native advertising as a distinctly new approach as publishers do.

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Summary

This research provides valuable insight for regulators and industry operators as it has

identified that each stakeholder has different priorities and desired outcomes for

utilising native advertising which impacts their perception of native advertising.

Specifically, this research provides reason as to why there has been confusion and

difficulty in discussing and defining native advertising. Native advertising is

important to the stakeholders for different reasons and as such is utilised for different

reasons. Importantly, the findings highlight the importance for stakeholders working

together to clearly articulate how they view native advertising and their expectations

for using it when working together.

In summary, the priorities and perceptions of native advertising for each stakeholder

group are:

• Publishers view native advertising as a way to generate revenue from

advertisers on their platform. Native advertising is a product they offer. It is

important that native advertising is positioned as a new product offering and

not an old approach that has been around for years. Native advertising offers

publishers new hope to claw back revenue in a struggling industry.

• Brands view native advertising as a way to cut through clutter and connect

with their consumers in a space that is highly fragmented. Their priority is to

create favourable attitudes towards the brand and generate sales.

• Agencies priorities are fixated on meeting the brands objectives and are

answerable to the brand. Agencies view native as way to add value in the

communication exchange with the customer. It is often utilised as part of an

overall campaign strategy to connect with consumers.

• Academics have very different priorities from the other stakeholders, as they

are not connected to consumers. Their priority is to understand and critique

native advertising and to inform regulators and industry operators.

Table 5.1 below summarises the priorities of the stakeholders identified in this

research and how it impacts their perception of native advertising.

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Table 5.1.

Stakeholder priorities and their perceptions of native advertising

Stakeholder Priorities Perceptions of native advertising

Publishers • To attract advertisers for their platform and generate revenue from them

• Attract and maintain readers / subscribers

• An opportunity to generate advertising revenue and therefore positioned as a new advertising approach online

Brands • To find an approach that offers them the ability to connect with customers

• To find a way around ad blockers

• Cut through ad clutter • Increase customer engagement • Generate sales

• A new advertising approach online which offers them hope to connect with customers in a difficult market

Agencies • To generate strategic value • Generate money for the agency • Establish a reputation for their

creative strategies and campaigns

• Keep brands happy • Meet brands objectives

• A combination of various types of advertising and an evolution of the advertorial. How it is defined doesn’t add any value to them.

Academics • Critique and inform industry and policy makers.

• Research

• A combination of various types of advertising and an evolution of an advertorial

• Consistent with the agencies’ view

5.2.1 POWER

Throughout this research, the concept of power has been discussed in relation to

stakeholder responsibility. Simply put, the application of the Power-Responsibility

Equilibrium (PRE) suggests that those with more power have more responsibility

(Davis, Fredrick and Blomstrom, 1980). Power is defined as “the potential ability to

influence behaviour, to change the course of events, to overcome resistance, and to

convince people to do things they would not do otherwise” (Pfeffer, 1992, p. 29).

The ethical responsibility of native advertising is considered to be a shared

responsibility between agencies, brands, and publishers. All are considered to be

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power holders to varying degrees, through the information they provide, by offering

their approval on ideas and content, to publishing the content.

While the exact degree of power and responsibility varies according to each task,

most of the stakeholders agree that it is fairly equally distributed.

From the perspective of the publishers, however, there is a different view. This

research suggests there is an obvious wrestle of power from their side to control the

process from ideation, creating and publishing, through to how it should be defined

and regulated. Publishers consistently exerted strong opinions, positioning

themselves as the leader in the process.

There are several reasons why the publishers feel a sense of control over native

advertising. These include:

1. Native advertising is a product offering on their platform directed to their

audience.

2. Native advertising offers publishers the opportunity to generate revenue from

advertisers using their platform.

3. Publishers can choose to accept or reject content from advertisers. They have

control over the delivery and execution of content.

4. A publisher is held responsible for content published on their platform. In

2015 the FTC in America announced that it would start to hold the publishers

accountable for native advertising content that is considered misleading or

deceptive on their platforms. The involvement of the publisher in the creation

of the content now means that content is considered to be the responsibility of

the publishers and the advertiser (Sluis, 2015).

5.2.2 RESPONSIBILITY

This research has investigated the concept of responsibility in connection to power

has been investigated. Broadly responsibility is defined as the “moral obligation to

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act” (Murphy, 2009). In business the concept of responsibility extends beyond just

meeting basic legal requirements to include ethical considerations of consumers.

Further, it assumes that stakeholders should be held accountable for the foreseeable

consequences of their decisions (Caudill & Murphy, 2000; Murphy, 2009). Being

ethically focused extends beyond self-regulation and is often incorporated into

organisational values and corporate social responsibility (Murphy, 2009).

This study identified that all stakeholder groups feel a strong sense of responsibility

both legally and ethically when using native advertising, and demonstrated a strong

understanding for why this was important. While specific internal procedures or

policies relating to ethics were not the focus of this research, the stakeholder groups

repeatedly discussed their focus and commitment towards being transparency with

consumers.

The Importance of Transparency

Being transparent with consumers and identifying native advertising as an

advertisement was identified as one of the key areas of importance for the

stakeholder groups in this study. The experts repeatedly stressed the necessity for

native advertisements to clearly feature a label such as “advertisement”, “paid” or

“sponsored” so that readers are aware that the content they are consuming is paid

advertising.

Transparency was considered important two key reasons; firstly, because the

stakeholders believed that ethically consumers should be able to identify the

commercial intent of the information as advertising, and secondly, because they

believed that labelling reduces the potential risk of misleading or deceiving

consumers.

As identified in this study, because native advertising extends across various

platforms and format types, there is issue around standardising labelling and

disclosure. Currently publishers can choose to use a variety of labels and placements

to disclose their content such as “Sponsored”, “Brand Voice”, “Presented by”, “From

our advertisers”, “Supported by”, etc. The lack of consistently in labelling can create

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confusion for consumers about what the content is and what the label means

(Contently, 2015; Hill, 2016; Wojdynski & Evans, 2016).

In addition to this, there is a question around whether labelling is effective or not.

Recent research suggests that a label may not be enough to protect consumers from

feeling misled or deceived. Ad disclosure is sometimes not enough to for readers to

recognise that the content is an advertisement (Wu et al., 2016). Recent research

found that only 17 out of 272, or less than 8% of participants in the study were able

to recognise that native advertising was an ad even with a label (Wojdynski & Evans,

2016). However, there is some evidence to support that other factors such as using

brand elements throughout the advertisement may help to increase advertisement

recognition (Jiang et al., 2017).

Responsibility and regulation

Native advertising is challenging to regulate for several reasons. Firstly, it is difficult

to recognise native ad content (Wojdynski & Evans, 2016), secondly, native

advertising can extend across national and international markets (Katsirea, 2016;

Matteo & Dal Zotto, 2015), and finally, as confirmed in this study, because there is

no set format style. As such native advertising can extend into any form such as

video, tweets, pictures, or as editorial content across various platforms making it

extremely difficult to identify and standardise for regulation (Katsirea, 2016; Matteo

& Dal Zotto, 2015).

In Australia, and similarly in various parts of the world, stakeholders using native

advertising are bound by and must comply with consumer laws relating to being

deceptive and misleading. Stakeholders are responsible for publishing information

that is accurate and not misleading.

Additionally, stakeholders are held accountable by self-regulatory bodies within

industry and by consumers groups. In Australia, self-regulation organisations (SRO)

are funded through levies that are paid through media buying agencies

(Adstandards.com.au, 2018). Self-regulatory bodies make decisions on whether

advertising is offensive or misleading, based on a code of ethics. Advertisers are not

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bound by these regulatory guidelines and can choose to ignore them at the risk of

some penalty or removal by the media on which the advertising is placed (IAB,

2016).

When the stakeholder groups were questioned about the difficulty in regulating

native advertising and their views on how it should be controlled, all expressed a

strong sense of stakeholder responsibility. This research found that each group

(agencies, brands and publishers) are involved in the process from creation to

distribution of content should be responsible for their contribution to minimise risk

and to ensure high ethical standards.

However, while each believed they were individually responsible, there was a strong

belief that the publishers should hold the most responsibility ethically in ensuring

content is correctly labelled and identifiable to consumers. The stakeholder’s likely

hold this view, as the publishers are the last stage in the content creation process, and

are responsible for the communication exchange with the consumer.

The research identified a strong preference for self-monitoring and less favour

towards outside parties adding further restrictions around native advertising is likely

due to the perception that tighter regulation will stifle creativity and flexibility. Even

though there is support for the idea of labelling native advertisement, it was felt that

tighter regulation would make the content more obvious as an advertisement and

destroy the inherent nature of native advertising which is to blend seamlessly into the

surrounding content (Sahni & Nair, 2016).

5.2.3 RISK

This study has identified various risks associated with adopting a native advertising

strategy. Risk is considered to be the potential to lose or gain something of value

such as financial wealth. It is also considered to be the intentional interaction with

uncertainty (Cline, 2004; Kahneman & Tversky, 2013). The types and degree of risk

(high and low) were found to vary amongst the stakeholders according to their

priorities and desired outcomes for using native advertising.

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Risks for publishers

This study found that publishers tend to be more concerned about the risks associated

with losing their audiences through content that doesn’t meet consumers needs for

entertainment or information, than they are concerned about the possibility of

misleading or deceiving their audience. This is a startling finding given that

publishers are considered by the stakeholder groups to hold the most responsibility

ethically and legally for native advertising content.

Publishers may face an ethical dilemma if they have to choose between misleading

the consumers or providing entertaining content.

This finding may also explain why 40% of publishers in a recent study were found to

not be following transparency guidelines set by the FTC (MediaRadar Report in

Forbes, 2017). Perhaps the risk of losing audiences was considered more damaging

than the risk of customers feeling deceived? Or perhaps they view them as only

guidelines, and not regulation? More research into this area would be valuable to

understand why the guidelines are not being fully followed.

Bahski (2014) offers insight suggesting that because the existence of publishers is

fragile, it is highly likely that they will be willing to take greater risks to stay afloat.

As highlighted in the literature, publisher revenue is down, paid readership has

become increasingly difficult to obtain as consumers move from printed magazines

and newspapers to online sources, also the increased fragmentation of channels

means that consumers are now able to tap into niche sources to fulfil their content

needs (Anderson et al., 2017; Bakshi, 2014; Herrman, 2016; Ponkivar, 2014). In the

mid 80’s in Australia publishers like The Age and The Sydney Morning Herald were

earning $100 million a year on average, now they are “struggling to stay afloat”

(Funnell, 2016).

Studies into risk taking suggest that people or organisations are more likely to be risk

seeking when they are below their desired level (Kahneman, 1979; West & Sargeant

& Miciak, 1999) such as being behind where the company wants to be financially, or

behind in their objectives. At this point in time, given the difficulties publisher are

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facing with revenue streams, perhaps the risk of misleading or deceiving readers is

lower on the spectrum of importance versus the potential to attract advertising spend

from brands?

Another risk that publishers are concerned about is the possibility that their

audiences might become skeptical of other publisher content that isn’t native ad

content. Research into skeptism and advertising suggests that skeptism often leads to

less trust in the source, that consumers will start to rely less on the information from

that source, and that generally consumers will give it less attention (Obermiller,

Spangenberg, & MacLachlan, 2005). Thus it is likely that if consumers become

skeptical of the native advertising content, they may also be skeptical of the

publishers content.

Choosing to ignore these risks could potentially damage a publisher’s presence in the

market. Recent research found that along with innovation and adoption of new

technology, ethical decision making and a strong sense of social responsibility is

considered to be of upmost importance to consumers if a publisher wants to ensure

long-term viability in the marketplace and maintain audiences (Pavlik, 2013).

Risks for agencies

Agencies identified the greatest number of potential risks associated with native

advertising. As shown in Table 4.2, these risks included misleading consumers,

readers feeling deceived by the brand, turning off audiences, below par quality

content, consumers feeling missold etc. Importantly, none of the risks directly impact

the agency, but instead are risks that are likely to impact the publisher and the brand.

However, given that agencies are often the link between both parties, it is likely that

they are concerned about the risk to both.

The risks that agencies are most concerned about are the possibility of “misleading

customers” and “annoying consumers with less relevance than needed”. Specifically,

agencies are worried the content they create will not be rich enough to satisfy the

consumers needs for information they are seeking, and instead will result as just

being annoying or irrelevant.

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The greatest risks to agencies are financial risks, connected to their relationship with

the brand and the effectiveness of the campaigns they develop. The responsibility of

the decision to utilise native advertising as a campaign strategy is often through an

agency recommendation, so success is strongly linked to their efforts. Further any

negative associations or backlash from using a native advertising strategy may

threaten an agency’s credibility and potentially future relationships when working

with brands.

Risks for brands

Of all the risks identified, brands are most concerned about the potential that

consumers will feel they have been misled or deceived through consuming native

advertising content. As identified in the literature, research has found that consumers

who feel deceived can respond in various ways including losing respect or trust for

the brand, doubting future communication from the brand (Darke & Ritchie, 2007) a

loss in sales, or even boycotting the brand (Martin & Smith, 2008).

The responses regarding the potential for consumers to feel deceived or tricked are

quite strong for a brand, raising the question about why a brand would be willing to

take the risk in the first place? Perhaps brands feel that the potential financial reward

outweighs the risk to potentially lose consumers?

Risk theories suggest that for individuals or businesses to take risks there are two

variables involved – how risky the situation is considered (risk perception), and the

tendency for the business or individual to take the risk (risk propensity) (Sitkin &

Weingart, 1995). In this context, perhaps brands see the risk of consumers feeling

deceived or misled as lower because the brand is involved in the process of designing

the content and therefore has more control over ensuring they aren’t deceived

through labelling, or perhaps the option of not using native advertising and not

connecting with the audience is a greater risk than using native advertising?

The literature suggests that brands have struggled in recent years to connect with

consumers because of ad blockers and advertising clutter (Endicott et all, 2006; Yoo,

2009; Borges 2009; Johnson, 2013; Budak, Goel, Rao, & Zervas, 2016). Native

advertising offers brands the chance to cut through this and engage with audiences in

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a value adding way. Perhaps brands view these risks as lower because they feel they

are able to mitigate these risks by being transparent through labelling.

Summary of Risks

As outlined above each stakeholder group (agencies, brands and publishers) are

concerned about different risks and have differing risk outcomes when choosing to

adopt a native advertising strategy. Table 5.2. below outlines these risks and details

who is most at risk, the potential effects, the actions to minimise risk, and who

should be responsible to minimise the risk to both the consumer and stakeholder.

Table 5.2. Summary of risks when using native advertising

Risks and Responsibilities Associated with Native Advertising

Risk Who is at

Risk Potential Effect

Action to Reduce Risk

Who is Responsible

Outcome

Misleading Consumers

Consumer Customer potentially unable to evaluate information adequately

Clear labelling Clear language to avoid the potential of misleading consumers into thinking the content is unbiased Increase use of brand elements

Publishers to ensure labelling and native content is able to be recognised as advertising and is different from publisher content

Maintain customer relationship Customer able to adequately interrupt information

Brands Loss of trust Loss of customers

Brands and Agencies should also be responsible for checking that the final product is acceptable.

Deception

Consumers Irritated / upset Increased Scepticism towards brand communication in future (Darke & Ritchie, 2007).

Clear labelling Clear language to avoid the potential of misleading consumers into thinking the content is unbiased Increase use of brand elements

Publishers to ensure labelling and native content is able to be recognised as advertising content and is different from non advertising content Brands and Agencies should also be responsible for checking that the final product is acceptable.

Maintain customer relationship Customer able to adequately interrupt information

Brands Potential to damage relationships, new and existing Loss of trust towards brand, and future

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communication (Darke & Ritchie, 2007). Less favourable attitudes towards brand (Craig, et.al, 2012) Boycotting product (Martin & Smith, 2008)

Agencies Damaged relationships with other stakeholders and consumers

Turning off audiences

Publishers Loss of readership

Good content that is clearly labelled as an advertisement

Publishers to ensure content meets needs and wants and is clearly recognisable as an advertisement

Bad Content

Publishers Loss of readership

Create content that is more engaging and targeted to meet customer needs and wants

Publishers, agencies and brands all responsible to ensure content meets readers needs and wants and is engaging

Engagement with content Potential for sharing of content with peers

Agencies Potential to lose brand as a client

Consumers becoming more sceptical of future content of site

Publishers Readers not trusting content produced by publisher Potential loss of readership

Clear distinction between paid and non-paid content on platform – whether that is labelling, announcing it on video, etc. Clear language

Publishers to ensure native advertisements are clearly recognised as paid content through labelling and potentially other identifiable design elements

Consumers will understand the difference between advertising and publisher content and maintain trust with the reader

Annoying consumers with irrelevance

Brands

Lack of effectiveness in connecting with customers Loss of dollars spent on advertising

Create content that is more engaging and targeted to meet customer needs and wants

Agencies and Brands

Higher engagement

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Agencies Potential strain between brand and agency for failed campaign

SEO -Google may consider native advertising a paid link resulting in penalty

Brands

Impact communication from brand Brand website may drop in Google rankings

Ensure appropriate links are included so Google is aware content includes paid advertising and is not promoted as an editorial piece by Google.

Publishers, brands, and agencies to ensure technical links are correct and not misleading for Google

Avoid penalties from Google

Agencies

5.3 IMPLICATIONS FOR THEORY

Through application of the Power-Responsibility Equilibrium (PRE) theory, this

research has examined the relationship of power and responsibility from the

perspective of the stakeholders in the native advertising process and highlighted their

ethical and regulatory concerns. Overall, the findings indicate that the stakeholders

demonstrate a strong commitment towards acting ethically and expect that all power

holders should be responsible towards the consumer through transparency and

labelling and in their contribution towards creation and publishing of the content.

This study has identified that there are various levels of power in creating and

publishing native advertising content. Publishers hold a higher degree of power in the

creative process and in the communication exchange with consumers, because they

own the platform and are responsible for publishing content. Brands hold power over

the type of content, the brand message, and approval to publish, whereas agencies

hold the least amount of power and are held accountable by the brand.

The following figure 5.1 visualises the findings of this study. It depicts the

relationship between power and responsibility and how they interrelate to influence

the balance or disruption of the equilibrium.

103

This diagram adds the inciting variable of risk as a determinant of whether the

equilibrium will be disrupted or restored. The risks identified in this study include

ethical and business risks such as include misleading consumers, deception, through

to creating content that is annoying or irrelevant. The perceived risks are different for

each stakeholder and vary from low to high-level risks.

Responsibility is depicted here as high or low responsibility. Depending on the

degree of power and the height of the risk, the equilibrium is either disrupted or

restored, when the power holder demonstrates a high or low level of responsibility,

by taking action.

If the power holder determines that the risk is low and demonstrates a low level of

responsibility, the balance of the equilibrium is disrupted. In contrast, if the power

holder determines that the risk is high, and they demonstrate high levels of

responsibility, the balance of the equilibrium is restored.

The degree of responsibility enacted is likely influenced by the stakeholder’s level of

power, and the perceived risk.

Figure 5.1. Model of Power, Risk, and Responsibility.

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5.4 IMPLICATIONS FOR PRACTITIONERS

In addition to the theoretical contributions, the findings of this study have identified

various practical implications for both regulators and content creators.

Implications for Policy Makers

This research provides valuable insight for regulators into how each of the

stakeholder groups view native advertising and their different priorities for using it,

and why there has been difficulty and confusion in defining native advertising to

date.

The inability to reach consensus based on the different stakeholder priorities provides

reason for a higher level of authority to be involved to dispel confusion and bring

clarity to the approach. It is highly unlikely that the stakeholders will otherwise be

able to reach an agreement for how it should be defined or enacted.

In terms of regulation, this study contributes to the need for industry bodies to review

native advertising practices and how to best regulate this approach. While this study

has highlighted that stakeholders demonstrate a strong commitment and enthusiasm

to act responsibly and be transparent with consumers, their primary strategy for

doing so is through labelling.

As discussed, labelling is not always an effective method for signalling to consumers

that content is advertising (Wojdynski & Evans, 2016). This is important for policy

makers to understand and highlights the need for further consideration into how

native advertisements should be identifiable to consumers beyond those outlined in

the current guidelines.

Further, as leaders such as the European Union introduce more robust regulation

such as the General Data Protection Regulation, the need to review how native

advertising and its impact on consumer protection becomes more imperative. To

brands and publishers, the risks also become higher. On one hand, some experts

predict that the new data laws will provide more opportunity for quality native

105

advertising as consumers can opt in if they see value in the content, or conversely

they will choose to ignore it (Arnold, 2018; Mali, 2018). Either way, transparency

and the ability to recognise the content as advertising will be key to avoiding fines

and significant penalties if the stakeholders are found in breach (eugdpr.org, 2018).

This is a difficult task given that the nature of native advertising and its effectiveness

lies in its ability to blend seamlessly into content, without disrupting the viewers

experience on a platform.

Implications for content creators

This study has highlighted important considerations for stakeholders involved in the

process of developing native advertising content. Given that stakeholders have

different perceptions of and priorities for using native, it is important that all parties

involved are clear in expressing these when working with clients or other

stakeholders. Clear understanding of the ethical expectations and clarification

around what their role entails, should be discussed to ensure consistency in direction

and the delivery of a high level of ethical standard.

Further, it is important that those adopting native advertising strategies understand

the types of risks associated with using native advertising. These risks are not the

same across publishers, brands and agencies, but vary according to the priorities and

motivations for using native advertising. Publishers risk the loss of readership,

consumer backlash, credibility, and loss of advertising revenue. Brands face a

potential loss in sales or trust if consumers feel deceived or mislead.

Because of the inherent nature and seamless design of native advertising into

surrounding content, regulation is difficult; all stakeholders need be vigilant in their

involvement to ensure that their decisions are ethical and socially responsible.

106

5.5 LIMITATIONS OF THE STUDY

Due to the small sample size, the findings of this study may not be generalisable to a

larger population.

However, the experts who did participate were of a high calibre and had extensive

experience and knowledge in the area of digital marketing and advertising.

Participants had a minimum of 10-20 years experience. The findings represent

opinions from experts from various backgrounds and from different areas of the

world.

Given the nature of digital advertising and the rapid pace at which it progresses,

some of the findings or the opinions of the experts may have changed since the time

of data collection and therefore may no longer reflect their current view.

Despite these limitations, the findings from this research provide valuable insight

into how native advertising is viewed from the perspective of key stakeholders and

acts as a good starting point for further research.

5.6 OPPORTUNITIES FOR FUTURE RESEARCH

Given that native advertising is a relatively new term (introduced in 2011), there are

still many areas yet to be explored and understood within this approach. This study

has provided a good starting point for future research and has highlighted several

areas that researchers could explore. These include:

1. This study has presented a model that has added the variable of risk into the

context of how stakeholders use their power to exhibit responsibility. Further

research could explore this connection to confirm and clarify this model and

gain a deeper insight into the risks and their influence.

107

2. Through exploring the ethical and regulatory considerations in this research,

some of the participants discussed that they had internal policies and

procedures to ensure that they exercised ethical responsibility towards the

consumer in their native content delivery. Further research could explore the

types of internal processes and checks used by content creators when

generating content, and importantly, to explore their effectiveness.

3. Further research is needed to explore better ways to signal to consumers that

content is native advertising without stifling the creative flexibility and

effectiveness of the content.

4. As identified in the literature review and results, ad blockers were identified

as a potential threat. Future research could investigate how labelling and ad

blockers impact native advertising and examine if native advertising is a

viable option in the future if ad blockers begin to pick up native

advertisements?

5. As discussed above, this study identified three elements that the stakeholders

believe are unique to native advertising. These three elements are similar to

advertorials. Further research could explore where the differences or

similarities are in these three elements. Perhaps there is a difference in the

degree of subtly in delivery of the brand message? Or the suggested increase

in value in content? Or perhaps the main differences lie in the design and

application of labelling? There is room for this to be explored further

explored and clarified.

5.7 CONCLUSION

In summary this thesis has provided initial research into understanding native

advertising from the perspective of the stakeholders involved in the creation of native

advertising content.

108

Specifically, this study identified four key areas of importance:

1. How native advertising is perceived and how it should be defined varies

according to the different priorities of the stakeholder. This is driving the

confusion when discussing native advertising’s definition within industry and

academic literature.

2. The concept of power was discussed within this study. Each stakeholder

carries different levels of power and therefore their level of responsibility

changes in connection to this power. This study highlighted the power

struggle from publishers to own the process of native advertising. Native

advertising is important to publishers for several key reasons – because it

offers them an opportunity to generate revenue, because brands are accessing

their readership, and because native advertising offers content for their

readers.

3. The findings revealed that all stakeholders feel a strong sense of

responsibility and are ethically focused in their creation of native advertising

content. Each group felt that transparency was important because it

demonstrates ethical responsibility, and because transparency is thought to

mitigate risk.

4. There are various risks and levels of risks associated with native advertising.

These risks vary across the stakeholder groups and not shared equally. Each

is exposed to different risks for different reasons. Risk was found to be

connected to both power and responsibility in the context of native

advertising.

To summarize this discussion, a model was offered demonstrating how the

different levels of risk, the level of power influence the balance of power and

responsibility.

110

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Appendices

APPENDIX A – WAVE ONE QUESTIONNAIRE

NATIVE ADVERTISING - WAVE ONE QUESTIONNAIRE

1 A definition used for native advertising is:

“Paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong”(IAB, 2013).

What aspects of the above definition do you agree with? What aspects do you not agree with? What key elements would you add?

2 Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms?

3 What are some examples of native advertising? For example is an article on a news site native advertising? What about paid search ads, video, tweets and other ads that appear on social network sites?

4 What should NOT be considered native advertising?

5 Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is there an approval process to make sure the content meets the requirements of native advertising?

6 Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? The brand? The self-regulatory organisation that regulates traditional advertising?

7 How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non-ad content?

8 What do you think are the risks associated with native advertising?

9 How will native advertising continue to evolve? (Format, platforms, its use etc.)

10 Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? Do you think ad blockers will become sophisticated enough to pick up on native advertising?

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APPENDIX B - WAVE ONE RESPONSES

Wave One Responses Question 1: What aspects of the above definition do you agree with? What aspects do you not agree with? What key elements would you add?

Participant 1

Agree that its paid, assimilated, platform relevant and so on. However, where the challenge lies is the concept that the consumer feels they belong because there is a fine line between misleading and not misleading the consumer. I would probably say that the ad are environmentally and contextually relevant versus setting a dimension around who they feel.

Participant 2

I am not sure about 'consistent with the platform behaviour'. Too vague. What is meant with an ad that is consistent with the platform behaviour? No idea. Also problematic is 'the viewer simply feels that they belong': a) viewers differ, some may think, other don't; b) what is belong? I believe that ads belong to a newspaper but I would not call them native advertising. And: personally I do not believe that native ads belong to FB, although I am aware of the fact that they often appear...

Participant 3

It's rare that a paid ad cannot be recognised, no matter how cohesive. Therefore I don't believe that users attribute a sense of belonging to the ads unless they are completely masked as editorial content.

Participant 4

I don’t agree necessarily that the viewer thinks the advert “belongs”. That statement could be interpreted as patronising the user. Lots of users will be very aware that the native advert is exactly that – an advert despite it being very consistent with the content/design of the page. I would add something along the lines of “the user does not feel that the advertising is intrusive”.

Participant 5 I agree with the definition. I might add that there is an element of storytelling without the hard sell.

Participant 6

I agree that native advertising should look and feel like the site they are on and look “native” to the site. I wouldn’t disagree with any part. I do feel that native ads should be tagged up so that readers/customers are aware the content is paid for but still in line with the aesthetic of the site.

Participant 7

I think this definition limits native advertising to editorial content, whereas branded content that leans and leverages from that media platform can take so many formats and appear on many different channels in a multitude of guises. The definition also assumes that the viewer ‘feels’ something, whereas in the majority of best in class examples of branded content – the viewer is only responding to the content (laughing, crying, sharing) not feeling whether it ‘belongs’ or not.

Participant 8

I agree with the statement. However a key element in successful advertising is disruption. To be effective and generate ROI the message must stand out from rather than belong to the platform.

Participant 9

I agree with this definition. My one concern with native is that the industry definition includes a lot of disparate buckets in which nearly all advertising can be described as native from text links in the footer to custom sponsored content.

Participant 10

I agree with most of it. The trouble is the phrase "that they belong" that sounds like a euphemism for the viewer thinking of them as actual content rather than a paid ad. By that definition, car ads in a print auto magazine would be "native" but we just call it an "ad" with a good media placement.

Participant 11

The definition of native advertising that we have developed internally and use is: quality content, inspired by a brand, delivered in-stream. We do often add to this that it needs to be "clearly signposted" as the aim is not to fool the audience, but to add to their experience by giving them quality content that they may not have had if it wasn't funded by an advertiser.

Participant 12

I agree to a certain extent that Paid Ads can sometimes be cohesive with page content, however, the above definition is an ideal and perfect definition that doesn’t happen in reality. In most cases, paid ads are placed on platforms to best reach Target Audiences in terms of the viewership and lifestyle preferences. For example, an FMCG brand promoting beverage to teens will place their ads on key websites most visited by teens (i.e music), and simply adapt existing ads to fit into the paid ad format (not assimilated into the design), and not consistent with the platform behavior.

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Participant 13

I agree with the IAB definition. I think native advertising environments allow advertisers to align themselves with native editorial content. It should not be seen to be misleading or persuasive behaviour by publishers to have advertisers align with their editorial.

Participant 14

I think it is good practice for the native ad to be "so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong" but really native advertising is when the ad is not third party served but rather coded into the website.

Question 2: Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms?

Participant 1 It's all the same thing. We have just got better at it over the years and started calling it different things.

Participant 2 For me they are the same; the term native ads is used for social media (while sponsored of branded content is more general and advertorials are in print media).

Participant 3

Sponsored content is attributed to the sponsor and in order to deliver value, by definition, needs to be clearly indicated. Branded content is more subtle and relies on the strength of the host content/brand along with an assumption that the association will lead to a positive view of the paying client. Benefits tend to be accrued over a longer period of time. Advertorials are more likely to ignored unless they are camouflaged.

Participant 4 I think “Native Advertising” is a generic term that covers all of the above.

Participant 5

Sponsored content is content created by the publisher but then the brand pays money for the rights to be affiliated with that content. Branded content is content created by the brand for the publisher. Advertorial looks more like an adverts, in that, it tries to persuade – it is more obvious that it has an advertising message. Having said that, is there a need to determine the differences. They are all used incorrectly and the above is just how I partition them. I don’t really think there is any factual answer to your question.

Participant 6

From HuffPost perspective, we stand very firm on what native means to us. The content is brand inspired but written in a HuffPost tone of voice. Our perspective is that sponsored content, branded content and advertorials are far more flexible and accommodating in terms of brand mentions with the copy of the content – native advertising should not do this unless there is a relevant and genuine link from the content to the brand URL. Native Advertising should be content that provides the readers with relevant content in an environment that they are already familiar with – the content makes implicit links to the brand while the integration message, presented by text and the logo lock up are the explicit links to the brand and make the association clear.

Participant 7 As per above; native advertising and advertorials are narrow by editorial. I think content marketing is a better catch all term.

Participant 8

At a top level there are two forms of content in all media: editorial and advertising. Sponsored content, to me, implies a top level branding message not a content rich specific native campaign. Advertorials implies a written advertisement whereas native advertising is less editorial in nature. Branded content implies the tone of the creative within an advertisement.

Participant 9 Sponsored content is one type of native advertising which is native to the platform per the definition above.

Participant 10 Sponsored content, branded content, and advertorials don’t intend to mislead people into thinking they are not ads. Native ads are happy to confuse people

Participant 11

I like to view it on a scale, starting with advertorial > sponsored content > branded content > native advertising, where the whole point of native is to make it as relevant as possible for both the audience AND the brand. Advertorial is generally good for the audience and not the brand, and native is the quest to be just as good for both.

Participant 12 They are similar, just different in terms of output look and feel and the amount of branding to be seen by consumers.

Participant 13

Native content is written by an existing editorial team as publisher content, it does not take client objectives into account and would be published with or without advertiser alignment. Branded, sponsored and advertorial content is content commissioned by an

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advertiser to align to their campaign objectives.

Participant 14

Native advertising is not content but an ad unit that commonly contains a picture, title, text and a call to action, and links to an external website. Branded and sponsored content typically deals with content on the publisher's website, not the brand website.

Question 3: What are some examples of native advertising? For example is an article on a news site native advertising? What about paid search ads, video, tweets and other ads that appear on social network sites?

Participant 1 The definer that it is advertising is that it is paid, paid is advertising. How you pay, like sponsorships or paying a publisher to create an article is advertising to me.

Participant 2 again: native advertising is advertising on social media.

Participant 3

Given the extent that Google have gone to in order to make their paid ads appear like organic website listings, you could say that they are native advertising. An article on a news site or in print is only native advertising if it seeks to promote a product or service in a hidden way, which is generally against the editorial policy of any publications that have a reasonable readership. Blogs are different. They make their own policy. So if a blogger receives a payment to promote a product, then it's his job to do that in the most effective way and native advertising is key.

Participant 4

Advertorials are a great example of native advertising but also so is a very strategically placed paid ad banner. Dynamic content with social feeds is perhaps the most widely used form currently and its no surprise that if an advertiser wants a high level of engagement then this is the way to drive the message.

Participant 5

I think here you are focused on location, but I think it has more to do with content. For example, if there was an article on a news site and that article was about the number of home burglaries in the area and how those had increased and then some safety solutions (ie the brand motivated content), then yes, it is native. It looks like a piece of news, contains burglary statistics etc. No, I don’t consider paid search adverts native only because I don’t see them as integrated, and seamless with a search page. I suppose that if someone was on a cruise search and a paid advert popped up BUT the content of that advert was about ’10 tips before going on a cruise’, and the reader could not distinguish this as a piece of paid content then it could be considered. To date, I have not seen that – a piece of content that assimilates into the page. It doesn’t blend. Social Networking sites have done a better job of blending. They can have more storytelling in them. So, you become involved in the content, forgetting it is native. You can be going through your newsfeed and there is an article that is really interesting, but it is sponsored content.

Participant 6

Native advertising should be sponsored content that is sitting on a site, that looks and feels like the sites primary offering - whether that’s news, vids, music, photos etc- but is clearly tagged up to let readers/consumers know that the content is supported commercially.

Participant 7

Its so broad, and can range from digital partnerships (ie. This one with GE and The Guardian) http://powering-people-city.theguardian.com/ to this which was a Channel 9 TV that told the story of Qantas: https://www.youtube.com/watch?v=F0Ena1FhSKQ

Participant 8

These: http://www.copyblogger.com/examples-of-native-ads/. Print advertorials online advertorials, Video advertorials, Sponsored content, branded content, product placement, in feed ads, sponsored posts, promoted tweets, Google text ads

Participant 9

Yes, if it’s paid for by a sponsor (aka sponsored content). All items listed above would count as native according to the IAB definition. Obvious, paid search ads and tweets are currently mostly text, direct response ads intended to mostly drive clicks to a site. More like classic direct response advertising paid based on performance. Elegant sponsored content like the kind being done by the New York Times, Washington Post and other premium brands is the antithesis of these text links as it drives hearts and minds true to the goals of classic brand advertising.

Participant 10 If it is identified as an ad, then I don’t think they are native. Just an ad pretending to be content, that’s native.

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Participant 11

There is some confusion around this. When I and most other people in the media refer to Native Advertising, what we really mean is Native Content ie. content that is created for a brand that feels like other types of content that the media produces. The other side of "native advertising" is literally "ads" that are placed "in-stream" - ie. Facebook Sponsored Posts or Twitter Promoted Posts. Whilst these are technically called "native advertising" they are bascially just ads that have cleverly positioned to appear in the same place as content, but this is generally not what the industry is talking about when it talks about native advertising.

Participant 12 Agree that the examples provided are some examples of native advertising. Additionally, there is paid ad display.

Participant 13

Native advertising is anything written/controlled by an editorial team which would be written or published without advertiser alignment. If paid search ads, video, tweets etc would have been posted without advertiser alignment I would also consider these native.

Participant 14 Native advertising is often not third party served or managed by an exchange. Rather it is managed by the publisher and often coded into the website.

Question 4: Which types of ads do you think are incorrectly referred to as native advertising?

Participant 1

Ads like Facebook that are targeted and not content context relevant. E.g. Dollar shave club isn’t relevant to my news feed, but is targeted as I buy razors. That’s not native its display!

Participant 2 I would restrict the term to paid ads in social media that aims to hide being an ad.

Participant 3

All "ads" are by definition NOT native advertising. I'm unaware of any that are classed specifically as native advertising. Although I guess that a disguised advertorial could quality.

Participant 4 Display adverts or any advert that is placed within an obvious advert placement of a web page.

Participant 5 Sorry, not sure on this one. I am not immersed in this field and I am not widely read to be able to comment.

Participant 6 Advertorials where the content is obviously brand related and brought to you by that same brand.

Participant 7

I think using the word ‘ads’ is not the right way of looking at it. Native advertising is where you put the user and the content first, looking to fulfil an audience need or desire with content. Ads are where you push a message to someone not expecting a reaction.

Participant 8 Most paid search ads aren’t native. They are clearly labelled as ads.

Participant 9

None, it’s why I’m not a fan of the term “Native advertising”! http://www.adweek.com/news/advertising-branding/jason-kint-refocusing-digital-content-next-161104

Participant 10 I can’t think of good examples here.

Participant 11

Facebook Sponsored Posts or Twitter Promoted Posts, Yahoo in-steam ads, Outbrain, Taboola. These are not really native advertising, they are just ads that are positioned where content normally is.

Participant 12

If based on your definition of what native advertising is, then most ads are incorrectly referred to as native advertising (based on my answer on Question 1), unless Advertisers have the time, budget to tailor and customized content for each media buy specifically (which in reality doesn’t happen as it’s usually adaptation).

Participant 13 Anything commissioned by a client

Participant 14 Third party served display ads or dynamic ads that either statically or dynamically have the same design elements as the website.

Question 5: Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is there an approval process to make sure the content meets the requirements of native advertising?

Participant 1 All of the above. And there should be approval processes of some construct even if not the final content.

Participant 2 I don't understand this question. For me it is not important who creates the ad.

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Participant 3

Ultimately the editor or owner of the publishing platform should be responsible for what is published. If an agency wanted to submit copy, this would be considered and potentially edited by the editor. Nobody would give an ad agency carte blanche to publish an "article" directly onto a respected site. Equally, nobody can stop them from adding native advertising as article/blog comments where possible and done cleverly this can elicit results.

Participant 4 It should be collaboration between all of the above for it to work best.

Participant 5

I don’t think it matters. All I think that happens is that it changes the name of it to sponsored or branded content. At the end of the day, native content requires rich, compelling storylines that are seamlessly embedded so that the reader enjoys the reading experience without the obvious connection to a brand. I think anyone can write the content – it doesn’t detract from the ability to create native advertising.

Participant 6

The publisher should have the ultimate control of the production of the content, from ideation to publishing. Creative elements from a brand or an agency can be discussed and incorporated when genuine and relevant to the content and the user experience. At HuffPost we only publish content produced out of the Partner Studio team for Native Content. Our clients are allowed two rounds of approvals to ensure we meet client objectives.

Participant 7 The publisher of the content, with guidance from the agency and brand.

Participant 8

Agencies, every time. The approval process is the responsibility of all three. Brands should ensure the message and motives are befitting of their organisation. Agencies should ensure that the campaign matches their own ethics and represents good value to their client. Publishers have an overriding legal obligation for the ads they cover and to ensure the content is relevant to their audience.

Participant 9

It really depends on the type. If it’s sponsored content that seeks to actually fulfill brand goals by captivating audience’s attention then I would argue no one is better at this than publishers. Yes, there should be an approval process. Ultimately, it’s an advertisement paid for and conducted for the sponsor.

Participant 10 An agency should do them like most ads. Agencies have a slightly higher level of moral standards.

Participant 11

I firmly believe the same people who create the usual content for the publisher should also create native content. That way you're ensuring the quality is just as high, and not creating a tiered content team. That is why traditional advertorial (for magazines, newspapers TV, radio etc) has such a bad reputation - as the advertorial teams did not create the same high quality content as the regular content creators.

Participant 12

Brand to provide very clearly Brand architecture, guidelines, and objectives. Agencies to create, write Publish to input on how to best fit the content to their platform, and launch

Participant 13

If content is truly native it should be created, written and published by the publisher, blogger etc. Whoever owns the platform it is being published on. The approval process should be the same as normal content published by this medium.

Participant 14 The brand/agency should be responsible for the creating and writing of the content. Shouldn't the publishing be the publisher's role? I think so.

Question 6: Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? The brand? The self-regulatory organisation that regulates traditional advertising?

Participant 1 Regulating is a government/authority responsibility. Publishers, producers, agencies and clients should all self regulate if they produce or distribute it.

Participant 2 The publisher. Participant 3 Publisher.

Participant 4 It should be the publisher first and foremost followed by a regulating body such as the ASA.

Participant 5

Self Reg Organisations, and Professional bodies (eg TCC, MFA and IAB) and Govt should educate the advertising industry and media industry about regulatory information. In addition, the media also have responsibility to review information from professional bodies and self-regulatory organisations and Govt. Yes of course ASB should regulate native advertising – it is still advertising. Same as ACCC watches for misleading and deceptive conduct. It is all advertising and the same rule applies.

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Participant 6 We follow the INMA guidelines and we feel it is our responsibility to regulate our own native content to ensure our readers are not served offending or misleading content.

Participant 7 I think branded content is regulated by consumers – if it’s bad they’ll tell you or turn off, if it’s good they’ll share and come back for more.

Participant 8 All media professionals have an overriding responsibility to ensure commercial messages are legal, decent, honest and truthful regardless of the medium or tactic used.

Participant 9

There needs to be established rules by a self-regulatory group and/or regulator guidance as we’ve seen here in the States with the FTC. Publishers then need to stick to that guidance as ultimately violating it risks the trust of their audience which is their most precious asset.

Participant 10

Publishers (by self-regulation) and whoever (e.g. govt agencies / industry groups) regulates other ads. The trouble is that most webpage publishers do not have the kind of public profile major print publishing organisations have. If a webpage does something fly-by-night and get caught, they just pull up stakes and create a new webpage. To me, the internet is a public good like the airways, and thus there’s a place for government regulation.

Participant 11 The publisher is the ultimately owner of all of the content they create, so they should be self-regulating it.

Participant 12 The publisher with clear communication to other stakeholders

Participant 13 The medium creating, writing and publishing the content should be responsible in ensuring it doesn't offend or is misleading.

Participant 14 The publisher

Question 7: How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non-ad content?

Participant 1 Very important, not being transparent dilutes trust and trust is important to brands and publishers

Participant 2 If I were a publisher I would make sure that ads (including native ads) are indicated as ads, and/or that the audience understands that.

Participant 3

I'm in favour of allowing people to advertise products to their audience without indicating that they are being paid to do so. The internet has done away with any argument that we should maybe control things in this way. Just like it has done with copyright in a lot of cases and individual privacy etc. If somebody has been smart enough to gather an audience that somebody else is willing to pay to be in front of, good luck to them.

Participant 4

The more an advert is native, then the less obvious that its an advert so my view is that if it’s really, really clever, highly targeted, on message, on brand, in keeping with the design of the publisher site, then it becomes less important. However, if it is trying in anyway to be controversial or against the theme of the publisher content then it is important.

Participant 5 I feel it is important. We need to treat consumers with respect. We need to identify the source of the information, otherwise we are misleading.

Participant 6

Very - Transparency to our audience is paramount but we pride ourselves on producing relevant content that sees them coming back and engaging with our native advertising. If the content is relevant enough, the reader will still consume it as they trust we are providing them content they trust.

Participant 7 I think in editorial (print/online), it’s important to disclose, but beyond that new channels and media make it hard to put standard practices in place

Participant 8 Extremely important. Due to the fuzzy interpretation of cross border advertising legislation this will remain difficult to enforce.

Participant 9

Super important, see above. Advertisers don’t have the same vested interest here as publishers. Publishers need to protect the trust of their audience. Advertisers left to their own devices are trying to drive business.

Participant 10 It is absolutely essential that we have a situation where consumers always know an ad is an ad. Then it is no longer a native ad, and instead is merely a well placed ad.

Participant 11 Super important to signpost native content. The aim is not to fool the audience, and as content creators we should we super proud of the native content we are able to produce.

Participant 12

Ethically, consumers should be able to differentiate paid vs non-ad content. However, as an advertiser (brands), we would like client to think that the content they are seeing are non-ads. As for agencies and publishers, I believe it comes down to regulations and brands’ demands.

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Participant 13 Extremely important. Transparency is key Participant 14 I feel that it is important in making sure the reader does not feel deceived or mislead.

Question 8: What do you think are the risks associated with using native advertising?

Participant 1 Misleading consumers, Disrupting value of the publishing environment, annoying consumers with less relevance than needed, annoying clients with bad content

Participant 2 That the audience/users of the social medium do not trust the medium anymore. Participant 3 Being mis-sold. But you get mis-sold all day every day anyway.

Participant 4 That a consumer could be mistaken into thinking the product/service is endorsed by the publisher.

Participant 5

Backlash if you appear to be too covert. You need to have identifiers because you want the reader to be surprised that the content was advertising, but not angry because they didn’t know it was advertising.

Participant 6

Because there is no current “standard” when it comes to native advertising, there is generally a lot of education for agencies and clients as to what constitutes as native and because there is not a consistent message in market across different publishers, the risk is that consumers will be offered a variety of different versions and thus become sceptical as to what they are being served.

Participant 7 Unless done properly with quality by the publisher, they risk turning off their audiences

Participant 8 Lack of regulation. It is a great tactic for guerrilla marketing which has yet be exploited by unscrupulous marketers.

Participant 9 Audience trust. https://digitalcontentnext.org/blog/2015/11/19/playing-poker-betting-big-on-the-brand/

Participant 10 If people figure out they've been duped, they are upset. Not only at that advertisers, and that media, but all advertising and media in general.

Participant 11 The biggest risk is that the content sucks, which can easily happen with native advertising if not given enough attention.

Participant 12 Native advertising is part of an overall media buy, and the risks for Brands/Advertisers is the ability to track, generate the right reach, delivering on KPIs and ROIs

Participant 13 Loss in consumer trust is the biggest risk, again, transparency is key.

Participant 14

The risk is that the reader feels deceived by the brand, if the native ad copy promises genuine, insightful content, but delivers a sales page or form. There is also an SEO risk because Google can consider it a paid link resulting in a manual penalty.

Question 9: How do you see native advertising continuing to evolve? (Format, platforms, its use etc.) Participant 1 Better targeted and optimized through data and responses

Participant 2 advertisers will always try to find ways to reach consumers trying to hide the commerciality of the sender.

Participant 3 Everybody should be made aware that what they read (anywhere) may not be all it seems and may be promoting a product or service.

Participant 4 Social media is the way forward so more dynamic content on social is how it will evolve.

Participant 5

Technology will enable online paid adverts to be seamlessly integrated so that they do more than just have a banner advert or pop up. That kind of advertising is just annoying. As technology evolves, how we present content and stories about brands will alter.

Participant 6

As native advertising becomes more and more common, there will need to be a hierarchy of format types/cost structures with the key to this being in the way in which the content in amplified. Using owned channels more predominantly rather than content referral platforms or paid for audiences. And as content continues to be more in line with what is generally produced for a publisher, readers will continue to engage and the metric for this sort of advertising will need to have more rigour around engagement/dwell times and relevant audiences reading relevant content.

Participant 7

I think content marketing as a whole will continue to grow – native advertising as a phrase will die out I believe as it’s not an accurate description of what the industry is doing

Participant 8 The blur between paid for content and editorial will continue to be hazy. Native advertising will become an essential way of amplifying all traditional campaigns.

Participant 9

likely cleared rules around labels and consistent conventions in order to not surprise audiences. The advertising in the sponsored links boxes at the bottom of pages will continue to bifurcate from sponsored content as it should. They’re radically different

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forms of advertising.

Participant 10 We need to have some kind of format that identifies ads as ads. Im not sure what that will look like, but that’s what we need.

Participant 11

Yes, it's getting a lot more sophisticated, and brands are getting a lot better at making sure it works for them. We are starting to see brands doing long term native content plays, like Qantas with AWOL and Westpac with The Cusp.

Participant 12 Native advertising will continue to evolve in terms of format offers across different platforms.

Participant 13 I don't see native advertising going anywhere anytime soon. There are huge opportunities for further growth in native advertising.

Participant 14 Native advertising and native sponsored content, and the ability to drop a cookie on readers that go to the content from that ad.

Question 10: Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? Do you think ad blockers will become sophisticated enough to pick up on native advertising? Participant 1 Yes. At least including and thinking about it. Yes

Participant 2

Yes, these are the reasons for native advertising. I believe that ad blockers will become sophisticated enough to pick up on native. I also believe that advertisers will try to find new ways, etc.

Participant 3

No, ad blockers won't cope with native advertising. I believe we will see more and more of it as long as the numbers reveal a positive return on investment. It will find it's own market level for each sector.

Participant 4

I don’t think its a conscious decision made to counter ad blocking, rather I think its advertisers responding to consumers being more savvy and demanding more intelligent forms of advertising rather than just a plain old display ad which they can ignore. So its a necessary evolution of ad formats.

Participant 5

Yes, I do think it is to counter ad avoidance online BUT it is not limited to online. The same is true for print advertising, where newspapers are filled with native advertising. You read a newspaper and go from one article to the next and you are suddenly reading something interest, and it may only be at the end, or when you re-look at the tiny words ‘sponsored content’ that you realise that it is an ad. I cannot comment on ad blocking software.

Participant 6

Initially I think this is why there is a considerable interest in native advertising but it’s also the engagement with relevant audiences. As we discover more benchmarking and ROI for advertisers, there should be a more considered approach to spending on native advertising. Ad Blockers will probably become sophisticated enough to block the promo drivers to the content but not to block the content itself. This will see a reliance on pushing native advertising out through own channels more and more.

Participant 7

Yes they’re doing it to avoid adblocking, but moreover they’re doing it because they know it’s the best way to reach their consumer – by adding value, and making your communication a value exchange

Participant 8

No. I think brands are using native advertising to complement other forms of marketing and amplify their effectiveness. I think marketers are also using native advertising to increase their impact as many users will not regard the ad as a commercial message.

Participant 9

I think anyone who believes native advertising is a panacea to ad blocking is significantly mistaken and/or trying to drive their own self-interests. If what allows native advertising to avoid an adblocker is that the consumer/tech doesn’t know it’s an advertisement then the premise is flawed from the beginning. Ultimately native will be better labeled and will be blocked if it’s not driving consumer value.

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Participant 10

Of course. Of course. Sure, but unscrupulous advertisers will just find other ways through the blockers. The legitimate way to deal with this is that we need to be upfront with audiences that advertising pays for the content. If you use ad blockers, you shouldne be able to access the site (undless you turn off the blocker) . The time will come when this quid pro quo will b e more straightforward. There are two ways to pay for content. One is subsciprtion based, the other advertising based. There's nothing for advertisers to be asheamed of regarding this. Its just the facts we accept on television or radio. But folks on the web have b een giving away the content free for too long. We have to stop this and not feel guilty about it. But at the same time, we should not overly just try to get around ad blockers. Be upfront. If you use an ad blocker, you cant access the site. Thats fair.

Participant 11

Ad blockers will not be able to pick up native content, and publishers will continue to find ways around that if they do. Native advertising is the only thing that will always find a way around ad blockers.

Participant 12

Most Brands/Advertisers key objective of using native advertising is to use the best platform to best reach consumers and be able to differentiate in a very cluttered marker, and not so much considering ad blocking.

Participant 13

I think advertisers should only seek out native advertising if it meets their campaign objectives, not simply to dodge ad blocking sofware. There will always be a degree of advertiser avoidance, both on and offline, but native advertising should blend with traditional editorial and if it is done well, should not be identified in order to be ad blocked.

Participant 14

I think there is implicit behaviour that causes people to ignore standard looking display advertising, and native advertising is a method being used to prevent those heuristic responses. Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? I don't think the main motive is a way to deal with ad blocking. Do you think ad blockers will become sophisticated enough to pick up on native advertising? No.

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APPENDIX C – WAVE TWO QUESTIONNAIRE

INSTRUCTIONS: Please rate your agreement with EACH of the following statements on a scale of 0 -100 (where 0 is complete disagreement and 100 represents total agreement). Statements are based on participant responses from WAVE 1. Question 1: “Paid ads that are so cohesive with the page content, assimilated into the design, and consistent with the platform behaviour that the viewer simply feels that they belong”(IAB, 2013). What aspects of the above definition do you AGREE with? What aspects do you NOT agree with? What key elements would you ADD? STATEMENT RATING/100 I agree with this definition The above definition is an ideal and perfect definition that doesn’t happen in reality

It’s rare that a paid ad cannot be recognised, no matter how cohesive I don’t believe that users attribute a sense of belonging to the ads unless they are masked as editorial content

I don’t agree that users necessarily think the advert “belongs”. Lots of users will be very aware that the native advert is an advert despite it being very consistent with the content / design of the page.

I would add the “user does not feel that the advertising is intrusive” I think this definition limits native advertising to editorial content, whereas branded content that leans and leverages from that media platform can take so many formats and appear on many different channels in a multitude of guises

The definition assumes that the viewer ‘feels’ something, whereas the majority of best in cases examples the viewer is only responding to the content (laughing, crying, sharing) not feeling whether it ‘belongs’

The industry definition includes a lot of disparate buckets in which nearly all advertising can be described as native from text links to custom sponsored content

Platform behaviour and ad’s ‘belonging’ are vague ideas Ads should be tagged so that viewers are aware the content is paid for but still in line with the aesthetic of the site

Native advertising is when the ad is NOT third party served but rather coded into the website

I believe native advertising is quality content, inspired by the brand, delivered in-stream

Question 2: Sometimes native advertising is used interchangeably with terms such as sponsored content, branded content, and advertorials. How is native advertising similar and different to these terms? STATEMENT RATING/100 It’s all the same thing - We have just got better at it over the years and started calling it different things

There is no need to determine the differences. They are all used incorrectly. I don’t really think there is any factual answer to the question.

Content marketing is a better catch all term Native advertising: (Please rate your agreement)

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a. Is used mainly for social media b. Is less editorial in nature than advertorials, sponsored or branded

content

c. Written by an existing editorial team as publisher content d. Provides the readers with relevant content in an environment that

they are already familiar with - the content makes implicit links to the brand while the integration message, presented by text and the logo lock up are the explicit links to the brand and make the association clear.

e. An ad unit that commonly contains a picture, title, text and a call to action and links to an external website.

Sponsored Content: (Please rate each) a. Is more of a general term while native advertising is more about

social media

b. Is created by the publisher but then the brand pays money for the rights to be affiliated with that content.

c. Sponsored content is one type of native advertising. d. Content on the publishers website, not the brand website.

Advertorials: (Please rate each) a. Is used more for print media

b. Look more like an advert, in that, it tries to persuade. It is more obvious and it has an advertising message.

c. A written advertisement

Branded content: (Please rate each) a. Content created by the brand for the publisher b. Is more subtle and relies on the strength of the host content/ brand

along with an assumption that the association will lead to a positive view of the paying client.

c. The tone of the creative within an advertisement d. Typically deals with content on the publishers website, not the

brand website.

Sponsored content, branded content, and advertorials don’t intend to mislead people into thinking they are not ads. Native ads are happy to confuse people

Branded, sponsored and advertorial content is content commissioned by an advertiser to alight to their campaign objectives

Sponsored content, branded content and advertorials are far more flexible and accommodating in terms of brand mentions

I like to view it on a scale, starting with advertorial > sponsored content > branded content > native advertising, where the whole point of native is to make it as relevant as possible for both the audience AND the brand.

Question 3: What are some examples of native advertising? For example is an article on a news site native advertising? What about paid search ads, video, tweets and other ads that appear on social network sites? STATEMENT RATING/100 Examples of native advertising (Please rate each)

a. Advertising on social media b. Google listings and text ads c. Advertising that is paid d. Article only if it seeks to promote a product or service in a hidden

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way e. Advertorials f. Dynamic content with social feeds g. News h. Videos i. Music j. Photos k. Print advertorials l. Online advertorials m. Sponsored content n. Branded content o. Product placement p. In feed ads q. Sponsored posts r. Promoted tweets s. Just an ad pretending to be content t. Ad’s that are literally placed in stream u. Anything written / controlled by an editorial team which would be

written or published without advertiser alignment. v. Sponsored content that is sitting on a site, that looks and feels like

the sites primary offering - Whether that’s news, vids, music, photos etc.- clearly tagged up to let readers/consumers know that the content is supported commercially.

Question 4: Which types of ads do you think are incorrectly referred to as native advertising? STATEMENT RATING/100 Incorrect Examples (Please rate each)

a. Ads like Facebook which are targeted and not context content relevant

b. Paid search ads in social media c. ALL “ads” are by definition NOT native advertising d. Display adverts e. Any obvious advert placement of a web page f. Advertorials where the content is obviously brand related and

brought to you by that same brand

g. Facebook sponsored posts h. Twitter promoted posts i. Yahoo in-stream ads, Outbrain, Taboola j. Most ads are incorrectly referred to as native advertising k. Anything commissioned by a client l. Third party served ads or dynamic ads that either statistically or

dynamically have the same design elements as the website

Question 5: Who should be responsible for creating, writing and publishing the content for native advertising? The brand? The agency? The publisher? Is there an approval process to make sure the content meets the requirements of native advertising? STATEMENT RATING/100 Creating / Writing:

a. I don’t think it matters. b. The publisher should have the ultimate control of the production of

the content from ideation to publishing. c. If content is truly native it should be created, written and published

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by the publisher or blogger. d. Publishers should provide input on how to best fit the content into

their platform and launch e. Brands should ensure message and motives are befitting of their

organisation f. Brand provides brand architecture, guidelines and objectives g. Agencies to create and write h. The publisher of the content, with guidance from the agency and

brand i. There should be a collaboration between all parties involved

Approval: a. Approval process is the responsibility of all three – the brand,

agency and publisher b. Agencies should ensure that the campaign matches their own

ethics and represents good value to their client c. Publishers have an overriding legal obligation for the ads they

cover and to ensure the content is relevant to their audience d. Approval should be the same as any normal content published

by this medium Question 6: Who should be responsible for regulating native advertising to make sure that it doesn’t offend or is misleading? The publisher? The agency? The brand? The self-regulatory organisation that regulates traditional advertising STATEMENT RATING/100 Publishers, producers, agencies and clients should all self regulate if they produce or distribute it. Publisher Needs to be established rules by a self-regulatory group / regulator guidance as we've seen in the USA with the FTC.

Regulated by consumers - if its bad they'll tell you or turn off, if its good they'll share and come back for more.

Question 7: How important is it for publishers/brands/agencies to differentiate for consumers that native advertising is paid advertising from non-advertising content? STATEMENT RATING/100 Important that the reader does not feel deceived or mislead Extremely important, transparency is key I'm in favour of allowing people to advertise products to their audience without indicating that they are being paid to do so.

Consumers should be able to differentiate paid vs. non-ad content. However, as an advertiser (brands), we would like client to think that the content they are seeing are non-ads.

I think in editorial (print/online), it’s important to disclose, but beyond that new channels and media make it hard to put standard practices in place

Question 8: What do you think are the risks associated with using native advertising? STATEMENT RATING/100 Misleading consumers Disrupting value of the publishing environment Annoying consumers with less relevance than needed Consumers being mis-sold The consumer could be mistaken into thinking the product/service is

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endorsed by the publisher Backlash if you appear to be too covert Because there is no current "standard" when it comes to native advertising, consumers will be offered a variety of different versions and thus become more skeptical as to what they are being served.

Risk turning off their audiences Biggest risk is that the content sucks Risks for brands/advertisers is the ability to track, generate right reach, delivery on KPI's and ROIs

Reader feels deceived by the brand SEO risk because Google can consider it a paid link resulting in manual penalty

Question 9: How do you see native advertising continuing to evolve? (Format, platforms, its use etc.) STATEMENT RATING/100 Better targeted and optimized through data and responses Advertisers will always try to find ways to reach consumers trying to hide the commerciality of the sender.

More dynamic content on social As technology evolves, how we present content and stories about brands will alter.

As native advertising becomes more and more common, there will need to be a hierarchy of format types/cost structures with the key to this being in the way in which the content in amplified.

Using owned channels more predominantly rather than content referral platforms or paid for audiences.

native advertising as a phrase will die out I believe as it’s not an accurate description of what the industry is doing

The blur between paid for content and editorial will continue to be hazy. Native advertising will become an essential way of amplifying all traditional campaigns.

The ability to drop a cookie on readers that go to the content from that ad.

We need to have some kind of format that identifies ads as ads. I’m not sure what that will look like, but that’s what we need.

Question 10: Do you think you think native advertising is being used to counter advertising avoidance online? Are brands deliberately choosing native advertising over other forms of online advertising as a strategy to counter ad blocking? STATEMENT RATING/100 Native advertising is being used to counter advertising avoidance online I don’t think it is a conscious decision to counter ad blocking, rather I think its advertisers responding to consumers being more savvy and demanding more intelligent forms of advertising rather than just a plain old display ad which they can ignore.

Native advertising is being used mainly because they know it’s the best way to reach their consumer - by adding value, and making your communication a value exchange

Brands are using native advertising to increase their impact as many users will not regard the ad as a commercial message

Unscrupulous advertisers will just find other ways through the blockers. Key objective of using native advertising is to use the best platform to

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best reach consumers and be able to differentiate in a very cluttered market, so not so much considered about ad blocking. I don't think the main motive [for using native advertising] is a way to deal with ad blocking

Do you think ad blockers will become sophisticated enough to pick up on native advertising?

a. Ad blockers will be able to eventually pick up on native advertising

b. Ad blockers won’t cope with native advertising. c. Ad blockers will probably become more sophisticated

enough to block the promo drivers to the content, but not to block the content itself

d. Native advertising is the only thing that will always find a way around ad blockers

THANK YOU!

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APPENDIX D – QUESTION 2 - STATEMENTS THAT DID NOT ACHIEVE CONSENSUS

Question2:Sometimesnativeadvertisingisusedinterchangeablywithtermssuchassponsoredcontent,brandedcontent,andadvertorials.Howisnativeadvertisingsimilaranddifferenttotheseterms? Overall% Overall%byGroupSTATEMENTS Publishers Agencies Brands AcademicsIt’sallthesamething-Wehavejustgotbetteratitovertheyearsandstartedcallingitdifferentthings 42.8 50 50.25 35 33.33Thereisnoneedtodeterminethedifferences.Theyareallusedincorrectly.Idon’treallythinkthereisanyfactualanswertothequestion. 34 45 31.25 40 26.66Contentmarketingisabettercatchallterm 47.7 60 53.75 40 36.66Nativeadvertising:(Pleaserateyouragreement) a.Isusedmainlyforsocialmedia 34 25 21.25 35 56.66b.Islesseditorialinnaturethanadvertorials,sponsoredorbrandedcontent 31 15 26.25 65 26.66

c.Writtenbyanexistingeditorialteamaspublishercontent 40 65 20 60 36.66d.Providesthereaderswithrelevantcontentinanenvironmentthattheyarealreadyfamiliarwith-thecontentmakesimplicitlinkstothebrandwhiletheintegrationmessage,presentedbytextandthelogolockuparetheexplicitlinkstothebrandandmaketheassociationclear. 55 75 47.5 70 43.33e.Anadunitthatcommonlycontainsapicture,title,textandacalltoactionandlinkstoanexternalwebsite. 36 45 21 70 30SponsoredContent:(Pleaserateeach)

a.Ismoreofageneraltermwhilenativeadvertisingismoreaboutsocialmedia 29 15 13.75 25 63.33b.Iscreatedbythepublisherbutthenthebrandpaysmoneyfortherightstobeaffiliatedwiththatcontent. 47 80 20.25 35 70c.Sponsoredcontentisonetypeofnativeadvertising. 65 45 93.75 65 40Advertorials:(Pleaserateeach) a.Isusedmoreforprintmedia 68 65 83.75 30 76.66c.Awrittenadvertisement 61 90 56.25 60 51.66Brandedcontent:(Pleaserateeach) a.Contentcreatedbythebrandforthepublisher 60.45 40 63.75 90 50

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c.Thetoneofthecreativewithinanadvertisement 45 35 47.75 45 50

d.Typicallydealswithcontentonthepublisherswebsite,notthebrandwebsite. 66 75 79.75 60 46.66 Sponsoredcontent,brandedcontent,andadvertorialsdon’tintendtomisleadpeopleintothinkingtheyarenotads.Nativeadsarehappytoconfusepeople 39.9 25 47.25 35 45Branded,sponsoredandadvertorialcontentiscontentcommissionedbyanadvertisertoalighttotheircampaignobjectives 64.5 45 73.75 60 70Sponsoredcontent,brandedcontentandadvertorialsarefarmoreflexibleandaccommodatingintermsofbrandmentions 52 35 60 55 50Iliketoviewitonascale,startingwithadvertorial>sponsoredcontent>brandedcontent>nativeadvertising,wherethewholepointofnativeistomakeitasrelevantaspossibleforboththeaudienceANDthebrand. 54.5 80 36.25 70 50

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