Reading list: native ad disclosures that work?

Eyal Peer & Dalia Shilian, Improving Consumers’ Ability To Detect Native AdvertisingUsing Identified Disclosure:

Native advertising of online content, such as articles embedded within news websites, is a covert attempt by marketers to affect consumer attitudes and behavior. Because such marketing can have detrimental consequences for consumers, regulators worldwide have begun mandating that disclosures accompany marketing content. Despite these mandated disclosures, studies repeatedly find that consumers still fail to detect native ads even when they include various disclosure labels. We argue that the failure of these and other such disclosures, (e.g., software licensing), results from consumers becoming so habituated to these notices that they fail to recognize or use them effectively. We propose an improved form of disclosure for native ads requiring explicit identification of the name of the company or marketing agent paying for the non-original content. Identified disclosure can be more effective because it is more salient and can vary between ads and platforms. In two studies, we show how adding identified disclosures to native advertising increases detection rates significantly and consistently. We also discuss important implications arising from using smart disclosures for consumer protection.

Payoff: at the end of the article, the authors note that Israel’s consumer protection authority has adopted its recommendations as a native advertising disclosure standard.