Academic journal article The Journal of Consumer Affairs

Measuring Sponsorship Transparency in the Age of Native Advertising

Academic journal article The Journal of Consumer Affairs

Measuring Sponsorship Transparency in the Age of Native Advertising

Article excerpt

The Federal Trade Commission (FTC) considers false advertising as that which is "misleading in a material respect." The 1983 FTC Policy Statement on Deception is based on the following three elements: (1) There must be a representation, omission, or practice that is likely to mislead the consumer; (2) the act or practice must be considered from the perspective of the reasonable consumer; and (3) the representation, omission, or practice must be material. Given that advertising is a "paid form of persuasive communication that uses mass and interactive media to reach broad audiences in order to connect an identified sponsor with buyers," (Moriarty et al. 2015, 6, emphasis added), tactics and practices that hinder consumers' ability to identify advertising and its sponsor as such clearly fall within the category of deceptive. The FTC directly addressed advertising that is deceptive in format in its December 2015 Enforcement Policy Statement on Deceptively Formatted Advertisements:

Knowing the source of an advertisement or promotional message typically affects the weight of credibility consumers give it. Such knowledge also may influence whether and to what extent consumers choose to interact with content containing a promotional message (FTC 2015a).

Thus, clear communication of a persuasive message's sponsor, or sponsorship transparency (ST), is foundational to consumer choice and protection against deceptive advertising.

Communication that blurs the lines between paid for content (i.e., advertising) and editorial or entertainment content has raised the concern of regulators and scholars over the past few decades. Examples of this kind of communication include host selling during children's programs in the late seventies (Hoy et al. 1986), television infomercials in the nineties (Sandler and Secunda 1993; Singh et al. 2000) to advergames (Evans et al. 2013; Lee et al. 2012) and more recently, online native advertising (FTC 2013, 2015a; Wojdynski and Evans 2016).

Advergames are custom-made games "structured entirely around a given brand, which act as de facto ads in themselves. By blending a brand message with a fun and interactive gaming experience the ideal is to provide a clear link between the brand and the game, without interfering with player engagement" (IAB 2010, 9). Advergames are typically free of charge, available on companies' websites, easy to play, casual, and offer quick rewards (Redondo 2012). Examples include Kellogg's "Loopy Beach" game, which allows users to collect Froot Loops on a beach while avoiding crustaceans, and "Dikembe Mutombo's 4 1/2 Weeks to Save the World," an Old Spice-branded scrolling adventure game full of pop-culture references (and Old Spice products).

Native advertising is "the practice by which a marketer borrows from the credibility of a content publisher by presenting paid content in a format and location that matches the publisher's original content" (Wojdynski and Golan 2016, 3). Because online content is highly diverse in its purpose and presentation format, online native advertising can take many different forms, including sponsored news articles, sponsored social media posts, and sponsored links, to name a few. Scholars (Carlson 2015), regulators (FTC 2013), and even practitioners (Schauster et al. 2016) have expressed concern about consumers' ability to identify online native advertising in all of its permutations, and to consequently apply the same level of scrutiny to these messages as to other ads. By its nature, native advertising is presented alongside and intermingled with nonsponsored content on the same platform, whether it is a "promoted" post for Blue Apron meals appearing in a user's Twitter feed, or an in-depth article about a young ballet dancer published by the New York Times online as a "paid post" by shoe retailer Cole Haan.

Efforts that have examined individuals' ability to distinguish between advertising and editorial/entertainment content have predominantly relied on Friestad and Wright's (1994) Persuasion Knowledge Model (PKM) as a theoretical framework. …

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