Internet users are not tricked into believing native advertising is pure editorial, according to the latest research.
Rather shoppers absorb the information in such advertising and use it as part of the process of deciding what to buy.
The research, by Navdeep S. Sahni and Hirkesh S. Nair of Stanford University and published in the INFORMS journal Marketing Science, confirms native advertising as an effective way to reach consumers.
“We found little evidence that native advertising ‘tricks’ Internet users into clicking on sponsored content and driving those users directly to the advertisers,” says Nair.
“Instead, we found that Internet users seem to view native ads as advertisements, and they use the content to deliberately evaluate those advertisers.”
The researchers studied native advertising at a mobile restaurant search platform against various formats of paid search advertising to more than 200,000 users.
“One of the interesting findings of the research is that while native advertising benefits advertisers, we see no evidence of consumers getting deceived,” says Sahni.
“More to the point, users who see a native advertisement continue with their product search; they’re more likely to later click on the advertiser’s organic listings and make a purchase.
"In effect, consumers often follow a process of conducting their own due diligence incorporating the information they receive through native advertising.”
Previous research shows that people are good at distinguishing native or sponsored ads from other digital content.
But the ads still exert significant influence on shopping behaviour.
“Native advertising is a relatively new form of advertising,” Sahni says. “Advertisers and publishers have embraced this because of the rise in mobile browsing behavior, and because banner ads are hard to implement on mobile screens, and are known to be not very effective.”
Making native ads more prominent is unlikely to change behavior.
“The mechanism through which such advertising works is not clicks. The consumers we observe don’t inadvertently click on an ad and buy a product without knowing they saw the ad," says Sahni
"Instead, they internalise the ad and may later search for the product in question or visit the advertiser’s page.”
Another study found that health advertorials, or advertisements made to look like general news, can mislead by reducing skepticism and expectations for truth in advertising.
The Dartmouth College-Stanford University study found that unlabeled advertorials, compared to those marked as advertorials and regular advertisements, were likely to increase favourable attitudes to advertising messages and purchase intention.
This form of advertising appears to be on the rise as advertisers try to embed their ads in the stories we read and the photos we see in almost every platform of social media," says co-author Jeff Hancock, a professor of communication at Stanford University.
"Understanding how these advertorials operate cognitively can improve guidelines for the prevention of misleading or confusing consumers."
In the US, the Federal Trade Commission has guidelines on native advertising, recommending using a clear label of "advertisement" and placing disclosures in front of or above the headline.
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