Yet more evidence native advertising doesn’t work

There’s no denying people are interested in native advertising.

On sites from Yahoo to The New York Times, this form of digital advertising has seen big gains in spending over the past few years, and study after study finds that advertisers are eager to try it out.

But once they’ve had a taste of native, many of them aren’t so gung ho.

Native advertising has low renewal rates, which means publishers either aren’t executing it as well as they could or advertisers aren’t seeing the return they’d hoped for.

Consider the numbers: A new study finds that two-thirds of advertisers who try native advertising abandon it.

That’s according to MediaRadar, an ad sales intelligence platform, which monitors more than 2.3 million brands across all media.

It found that renewal rates for native advertising last year were only 33 percent across all media sites. Of that number, 20 percent renew less than 20 percent of the time.

More experience, more renewals

Part of the problem may be inexperience on the part of some publishers.

MediaRadar found that sites with more established native ad programs had much higher renewal rates, 49 percent. These are sites where more than 50 advertisers are buying native, which means the publishers have had the time to eliminate any kinks in the programs.

By contrast, less-experienced publishers may still be in the experimental stage. If an advertiser has a less-than-ideal experience, it may abandon the experiment rather than stick around in hopes the publisher will fix the bugs that caused the problems.

“Even though renewal rates were low last year, there are sites that are successfully selling native ad space on a regular basis,” says MediaRadar co-founder Todd Krizelman.

“These are the publishers that have invested in the technology and additional personnel required to be successful.”

Flouting FTC native guidelines

Low renewal rates are clearly a problem, but here’s another.

Implicit in the notion of native advertising is deception-deceiving the reader into believing that what he or she is reading is a real story, when in fact it is advertising tricked out to look like a story.

The Federal Trade Commission in 2015 established rules designed to force sites to identify native ads as advertising.

Some publishers are complying with the rules but a number still are not.

While compliance is up from last year, it’s still not great. 

MediaRadar found 37 percent of digital publishers are still not native complaint, though that is down from 71 percent last year.

“More publishers have familiarized themselves with the rules and are observing them. But there is still room for improvement,” Krizelman says.

Those who are not complying are not doing so likely because they don’t think people will read their content if they know it’s an ad. They have a point. 

One has to wonder, if all publishers clearly labeled their native advertising as such, how much of it would actually be read? 

And would the numbers be high enough to please advertisers?

Tags: digital, ftc, native ads, native advertising, native advertising campaigns, research, studies