Effects of Advertising

Company

Utilizing native advertisements is a successful and profitable investment for brands (Boland, 2016). Sharethrough (2018), a native advertising agency, published a report with Interpublic Group indicating native advertisements were looked at 25 percent more often than traditional banner ads. Also, by placing ads natively, advertisers are gaining the perceived authority of the source (Conill, 2016).

In regards to brand attitude toward the sponsor, Sweetser et al. (2016) found that awareness of the content being advertising did not negatively impact the perceived trustworthiness of the sponsor.  Although this attitude is dependent on the quality of the content within the advertisement.

Medium

The biggest impact native advertising holds for the mediums presenting it is gained ad revenue. Native advertisements are predicted to take up more than 74 percent of all advertising revenue by 2021 (Boland, 2016).

However, the use of native advertising may have a negative impact on the credibility of the medium particularly a print or news source (Cameron & Ju-Pak, 2000). The Society of Professional Journalists code of ethics (2019) states journalists should act independently and “deny favored treatment to advertisers.” The code of ethics goes on to highlight the importance of “distinguishing news from advertising and shun hybrids that blur the lines between the two.” As sponsored content by definition is the blurring of the lines between editorial content and advertisements, its ethicacy may be called into question. 

Schauster et al. (2016) took a qualitative look at professionals in the fields of journalism, public relations, and advertising to gauge their professional opinions on native advertising. The researchers found that while their participants believed native advertising to be a necessity in the financial sustainability of the modern news model, professionals in the field found it overall unethical.

Conill (2016) further points out that by placing ads natively, advertisers are gaining the perceived authority of the source. However, it is surmised that there is a distinct difference between source credibility and message credibility. If this distinction between message and source credibility can be made by consumers, it could aid the discussion that disclosure is sufficient in differentiating advertisements from editorial content (Appleman & Sundar, 2016).