How 'deceptive' sponsored news articles could be tricking readers -- even with a disclosure message

NarcosNetflixThe Wall Street Journal collaborated with Netflix to produce a sponsored feature related to ‘Narcos.’

Most online publishers use some form of native advertising — ads that look like news stories — to grow revenue. It is accepted practice to declare that this content is sponsored by a company, so that readers can differentiate between what is and is not news.

However, the way in which many publishers declare these ads could be “complicit with deception,” according to a new study by Bart Wojdynski, director of the digital media, attention, and cognition lab at the University of Georgia.

Wojdynski and Nathaniel J. Evans, assistant professor in advertising at the same university, led the study, which found that 60% of readers did not notice the sponsor disclosure label placed at the top of sponsored articles.

It also showed that readers are seven times more likely to recognise the labels that use some form of the words “advertising” or “sponsored,” than those which use more vague phrases like “brand voice” or “presented by.” Overall, only 20% of people in the study were aware that they were reading advertising, rather than objective, editorial content.

Many readers who notice the disclosure label are unaware that it is linked to the content of the article, thinking instead that they are looking at an unconventionally-placed banner ad, Wojdynski told Business Insider.

Advertisers are being “complicit with deception,” according to Wojdynski

This level of ambiguity could have consequences on how much we trust the organisations who give us news.

Wojdynski said: “I think the advertisers are well aware that they benefit from some ambiguity in the consumer’s mind about whether or not it’s paid advertising. Otherwise they’d put, in really big letters, right across the top: ‘This is a paid advertisement from the company name.’ They don’t want to do that because they know that consumers habituate themselves to ignore advertising online.”

He added that it is too early to say whether the forecast increase in native advertising spend — rising from $7.9 billion in 2015 to $21 billion in 2018, according to BI Intelligence — will affect the credibility of the news organisation’s journalism.

He added: “It’s not necessarily misanthropy on the part of the advertiser. I think in some cases the refusal to make things potentially clearer is a kind of tacit … they’re being complicit with deception.”

Position and language of disclosure

Anna Watkins, managing director of The Guardian’s sponsored content division, Guardian Labs, told Business Insider: “If the lines and labelling for sponsored content are not clear then you risk undermining the trust of the reader. This is why we are so black and white about what is editorially independent and what has advertiser influence.”

She added: “The Guardian has very clear guidelines on how it labels branded content. We only use two labels — ‘supported by’ and ‘paid for by’ — which distinctly demonstrate what content is editorially independent and what has advertiser sign-off.”

However, even within The Guardian’s guidelines, there is room for confusion: it may not be immediately obvious that “supported by” refers to advertising, for example.

In Wojdynski and Evans’ study, where 242 readers were given sample native ads, the terms “advertising” and “sponsored content” were seven times more recognisable than “brand voice” and “presented by.”

Apple News sponsored adBI Screenshot/AppleApple News announced this week that they will include sponsored content in its feed — in this format.

Another issue is the placement of the sponsorship disclosure. Wojdynski and Evans’ study suggests it is clearer to put the disclosure in the center of an article surrounded by a box (90% recognition,) rather than at the top of the page (40% recognition,) or at the bottom of the page (60% recognition.)

So what are the rules?

The Federal Trade Commission (FTC) recently released guidelines for native advertising, which aim to prevent “unfair or deceptive practices.”

This week, the FTC showed it was serious, after ruling that fashion retailer Lord & Taylor broke the rules when it failed to disclose it paid for an article in Nylon magazine, as well as paying 50 online “influencers” on Instagram to post photos of the dress.

There was no fine at this stage, but the FTC made clear that it has the ability to impose a $16,000 penalty per violation. Lord & Taylor is now required to launch an “internal monitoring program” and submit a report to the FTC to prove it has changed its process.

See one of the influencer posts below:

In the UK, the Committee of Advertising Practice, which is responsible for writing and maintaining the UK advertising codes, has guidelines which state that advertisers should be “wary” of terms including “sponsorship” and “in association with” and that the ad must be recognisable as such from the start.

Kunal Gupta, the CEO of publisher technology company Polar, argues that platforms like Facebook, Twitter, Instagram, LinkedIn, and Snapchat, which occasionally host sponsored content, must also take a share of the responsibility for enforcing disclosure.

“I think platforms are generally going to enforce clear guidelines (that they determine, not necessarily following the FTC), to ensure that advertisers are paying for the distribution of their content in these environments,” Gupta said in a blog post on Linkedin.

Orange is the new blackNew York TimesFrom The New York Times’ sponsored post ‘Women Inmates.’

Sponsored articles are becoming an important part of financially supporting objective journalism, with the blocking of more traditional banner ads becoming mainstream.

Commonly-cited successful examples of sponsored content include the Netflix and New York Times feature “Women Inmates” and the Netflix and Wall Street Journal article “Cocaineomics.”

Wojdynski praised sponsored content that is “exactly the type of content their audiences are going to their site for and it just happens to be underwritten by a company.”

However, the effectiveness of native ads is still difficult to measure. “For all the buzz around native advertising, you don’t hear a lot about measurement and ROI,” executive vice president of the Association of National Advertisers, Bill Duggan, told The Wall Street Journal last year. “The industry would benefit from a deeper understanding of the metrics that matter most for native.”

Disclosure: Business Insider runs sponsored posts — the disclosure message is marked at both the beginning and the end of each article using the word “sponsored.” Business Insider develops sponsored content with companies whose products and services we think our readers will find valuable or interesting.

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