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Consumer Trust Still the Biggest Hurdle for Native Advertisers

Media Companies, Marketers Have Their Work Cut Out for Them

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Not all content is equal -- at least when it comes to trust.

A new study conducted by Nielsen on behalf of InPowered, a technology startup, found that consumers are actually quite sophisticated in how they utilize different sources in the buying process. And they, in fact, favor third-party articles by journalists (what the research calls "trusted content").

At the same time, the data raises serious questions over whether native advertising threatens to upend this trust publishers have earned with their audience. This is a particularly prickly issue as it could become harder for readers to discern ads from editorial.

According to the Nielsen/InPowered study, 85% of consumers said they seek out "trusted content" and 67% said it drives their buying decisions. These same articles created a 15% lift in purchase intent vs. 10% for user-generated content like reviews on Amazon and only 8% for branded content on company/product web sites.

Trusted content like articles created a 15% lift in purchase intent vs. 10% for user-generated content like reviews on Amazon and only 8% for branded content on company/product web sites.

However, notably for native advertising, more than 60% of consumers said they were less likely to trust a product review if they know it was paid for by the company selling the product. And the study also calls into question whether overtly-branded, one-sided content marketing programs can succeed in a stand-alone format. Some 50% of those surveyed said that they do not trust a brand's own website for an unbiased assessment of a product.

The Nielsen/InPowered study of 1,000 consumers was conducted in a controlled lab setting in Nevada. It covered multiple categories, including autos, electronics, financial services and household durables. It will be released in full at ad:tech later this month.

While seemingly positive for journalism, the research underscores the delicate balance that is now in place as advertisers try to become publishers either in their own right or in sponsored-content partnerships with the media. And it could challenge the conventional wisdom that marketers don't need the press when they can go direct.

This sets up the "Great Native Narrative" for 2014 -- and perhaps beyond.

Can media companies find a way to elevate sponsored content so that it becomes more trusted than basic advertorials and a near equal to journalism? And, importantly, can they do so without whittling away the relationship they have with their audience, not to mention their journalists?

Meanwhile, on the other side, can brands adapt the current content-marketing paradigm as they invest in their own channels so that they aren't as self-serving? And will they be willing to make such an investment given the trust hurdles they need to overcome to get it right?

Working together
This can't be a discussion that happens in a vacuum, in which both sides go their own way to figure this all out. There's too much hanging in the balance for both publishers and advertisers. The two sides need to come together now, ideally armed with data on audience/consumer attitudes, to begin to set it right. This process could take years but there's potentially several interim solutions that could work.

The media owners could, for example, encourage more advertisers to embrace sponsored content that resembles TV product placements. Such posts would position the advertiser as a hero -- a lead character -- in clearly-labeled, more editorial-like narratives.

Meanwhile, marketers who hope to become publishers in their own right should seek to tie up to create content sites that are less self-serving. For example, an auto maker and an electronics company could team to create a site about connected commuting. Such an effort could be bolstered by licensing related content from the publishers, which all are eagerly making such offers as they search for new revenue streams.

Without such experimentation and critical thinking, however, there is clearly a risk that the promise of content marketing and native advertising could disappear into a black hole of trust. And that wouldn't be good for either side.

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