1. Running head: NATIVE ADVERTISING 1
Native Advertising:
Ethical Implications and Guidelines for Effective Utilization
Madeline J. Buchel
DePaul University

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Abstract
Native advertising is a technique that has grown in popularity in recent years; as digital
journalism continues to be on the rise, native advertising has become a “hot topic” in the
advertising world. As the format of native advertisements is constantly changing, particularly in
regards to in-feed ads, new ethical quandaries have arisen not just in the field of advertisement,
but in journalism as well. The purpose of this literature review is to examine what makes a native
advertisement ethical by defining deception in advertising while simultaneously investigating
how source credibility affects the effectiveness of native advertisements. This paper also
analyzes visual and rhetorical studies in its quest to provide five guidelines for both advertisers
and publishers on how to best maximize the effectiveness and the ethical soundness of native
advertisements.

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Native Advertising’s Place in the Current Digital Landscape
In June of 2014, The New York Times ran an article by Melanie Deziel entitled “Women
Inmates: Why the Male Model Doesn’t Work.” It discussed the specific plight of women
prisoners, complete with statistics and interviews with psychologists, leaders of advocacy
groups, and past inmates. At the top of the page, two small logos denoted that this real piece of
reporting was, in fact, a “paid post,” or advertisement—for Netflix and their original program,
Orange Is the New Black. This work by T Brand Studio, the branded content studio in The New
York Times advertising department, was highlighted by a variety of advertising publications (e.g.,
Moses, 2014; Sebastian, 2014). In particular, Moses (2014) quoted the tweets of a number of
journalists praising the narrative quality of this sponsored content. When considering the
“separation of church and state” language that is usually used to discuss the divide between
journalism and advertising, these reporters’ praise seems especially remarkable.
At the same time, there have been outspoken critics of this advertising approach, most notably
John Oliver, host of the popular HBO satirical news show Last Week Tonight, and blogger
Andrew Sullivan, creator of news site The Dish. According to a summary by Lichterman (2014),
Oliver argued on his show that native advertising acts “simply to trick readers since they won’t
click on traditional banner ads.” In a Digiday interview, Sullivan went one step further, saying,
“If [sites like The New York Times] wanted not to deceive, they would have these as ads, not as
paid posts” (Braiker, 2014). Sullivan also questioned the many terms that are used to refer to the
concept of native advertising, such as “sponsored content” and “branded content” adding, “as
soon as they start giving you gibberish, you realize they’re doing something naughty.”
The Federal Trade Commission (FTC) has defined native advertising as “the blending of
advertisements with news, entertainment, and other editorial content in digital media” noting that

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this phenomenon can also be described by the terms “custom content,” “brand journalism,” and
“advertorials” (Kurnit, 2014). In 2013, the Interactive Advertising Bureau (IAB) released a
playbook outlining the burgeoning field of native advertising with the goal of providing a
universal framework with which to discuss it. IAB admits there is “no universally agreed-upon”
definition of native advertising; however, the clear goal of the technique is “to deliver paid ads
that are so cohesive with the page content, assimilated into the design, and consistent with the
platform behavior that the viewer simply feels that they belong” (IAB, 2013). Six categories
were suggested to differentiate the various kinds of native advertising: in-feed ads, search ads,
recommendation widgets, promoted listings, in-ad (IAB standard), and custom/can’t be
contained. This is far from an exhaustive list of labels that the industry uses; however, for the
purposes of this paper, the focus will be on “native advertising” defined as IAB’s “in-feed ad.”
These two starkly different perspectives about native advertising from tad consumers present
an ethical dilemma for the advertisers as well as the publishers. Those who reproach native
advertising often use the word “deception” to criticize the practice (Wasserman, 2013).
However, in a similar way to how the advertising industry has found it difficult to agree upon a
definition of “native advertising,” what it means for an ad to be deceptive is up for debate among
academics, professionals, and various regulatory agencies. Therefore, this paper asks, “What
does it mean for an ad to be deceptive, and how can this be avoided while also creating ethical
native advertisements?” To answer the question, this paper examines the definition of deceptive
advertising, provides a review of what makes native advertising more or less credible, and
examines studies of visual rhetoric to propose how to create effective in-feed native
advertisements in an ethical manner.

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What is Native Advertising?
The 2014 Times “paid post” article on women inmates falls under the category of an in-feed
ad—“an endemic in-feed ad that is in a publisher’s normal content well, is in story form where
the content has been written by or in partnership with the publisher’s team to match the
surrounding stories, links to a page within the site like any editorial story, has been sold with a
guaranteed placement so the buyer knows exactly what context will surround it, and is measured
on brand metrics such as interaction and brand lift” (IAB, 2013, p. 8). According to the IAB
playbook, commonly used disclosure language associated with in-feed ads include
“advertisement,” “promoted,” “sponsored,” “presented by,” and/or “suggested.” Journalist Amar
Bakshi contextualizes the definition of native advertisement for online advertising—“it refers to
the practice of online publishers accepting payment from particular advertisers to publish
customized content that looks very similar—in terms of tone, presentation, and functionality—to
the independently produced news, editorial, and entertainment content on the site” (2015, p. 6).
Deception in Advertising
Since native advertising is frequently accused of being deceptive in nature, it is important
to understand what this truly means. In his 1975 conceptualization of deception in advertising,
Gardner acquiesces it is difficult to define. He proposes a definition that is prescriptive, not
proscriptive, suggesting that if an advertisement “leaves the consumer with an impression(s)
and/or belief(s) different from what would normally be expected if the consumer had reasonable
knowledge, and that impression(s) and/or belief(s) is factually untrue or potentially misleading
(p. 42),” then one can conclude that it is deception. However, as it is reasonable to assume there
will always be people who claim to not have knowledge of a certain brand or project and,

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therefore, feel misled, Carson, Wokutch, and Cox (1985) make the important distinction between
“consumers” and “intelligent and knowledgeable adults” and provide a revised definition
replacing “consumers” with “intelligent and knowledgeable adults (or a significant percentage of
intelligent and knowledgeable adults)” (p. 95). Thus, if someone who is educated on the content
of an advertisement is confused as to its true meaning, then it can be deemed deceptive and
problematic.
The Federal Trade Commission has long defined deceptive advertisements as those which
“mislead consumers into believing they are independent, impartial, or not from the sponsoring
advertiser itself” (2015, p. 1). Most recently, the FTC has extended this definition to specifically
address native advertisements; it maintains that regardless of medium, deception occurs when
consumers are misled about a source in a way that has the potential to affect their decision-
making process. In most of the anecdotes included in the FTC enforcement policy statement,
advertisers were instructed to clearly denote an advertorial or in-feed native ad as a “Paid
Advertisement” in order to ensure it is not deceptive to viewers (p. 4). The major difference
between academic definitions of deceptive advertising and the FTC’s wording is the FTC
stresses advertisement can only be deceptive if it is likely to affect the behavior of the viewer of
the ad. While certain findings suggest viewers are most likely to recognize an advertisement if
disclosures are positioned in the middle or bottom of an article, it is important to note
experimental studies would have to occur with virtually every native ad to accurately determine
if a “Paid Advertisement” label changes how the viewer chooses to interact with the product or
brand after seeing it (Wojdynski & Evans, 2015).
When it comes to native advertising, it is essential to keep in mind that if every ad was a
native ad, they would cease to be effective because consumers would adapt their approach to

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media in light of that fact. This is one of the arguments against both deceptive advertising and
native advertising—a Kantian approach to the ethics of native advertising would claim that, for it
to be an ethically sound practice, every advertisement should be able to be a native advertisement
(Carson et al., 1985). However, while native advertisements would cease to be effective should
that be the case, it is important to address the healthy skepticism that all intelligent and
knowledgeable adults should exhibit when approaching any kind of media, whether it be a news
article or an in-feed advertisement (Carson et al., 1985).
The trouble with native advertisement comes when even if a skeptical approach is employed,
the reader of the in-feed ad is not aware of the agenda at hand. Amar Bakshi, a former journalist,
addresses this by pointing to a Scientology in-feed ad in The Atlantic as an example. Not only
was an in-feed ad used for a controversial topic, such as religion, the article was written in a tone
not in keeping with the publication’s other articles. While it is possible to argue that writing a
native advertisement in a different style from the parent publication has the potential to make it
easier for readers to identify the article as an advertisement, it is jarring to the reader and, by
most definitions of deceptive advertising, is not enough to constitute an acknowledgment of the
sponsored nature of the article. Most egregiously, in the case of The Atlantic’s Scientology
advertisement, the comments section was painstakingly monitored and all negative comments
were removed (Bakshi, 2015).
Advertising is strategic action, not strictly communicative action, and this should be
considered before accusing any native advertising of being deceptive. However, it is essential
that the consumer, the intelligent and knowledgeable adult, is able to consciously acknowledge
the strategic action at play. When comments sections are censored, or controversial opinions are

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presented in the form of an ostensibly unbiased news article, native advertising does have the
potential to become problematic and should be avoided at all costs.
Michael Sebastian writes in his 2014 AdAge article, “Confusing the consumer about the
source of the ad is simply an unintended consequence of creating more engaging ads.” Native
advertising is designed to entertain and appeal to the reader—if ads that look like trailers or
television shows don’t offend anyone’s ethical sensibilities, if consumers are fine with
discovering new music by hearing it in a commercial, then why do ads that match the tone of a
publication face backlash? Perhaps, the backlash is only deserved when the in-feed ad is jarring
to the reader, when there has been no effort put in for it to seamlessly match the agenda of the
article. As Worzel puts it, “The greatest sin of The Atlantic…may be licensing bizarre and
uninteresting content that falls well outside the walls of the magazine’s brand” (2013).
Source Credibility in Advertising and Journalism
Source credibility is a major tenant of effective and ethical journalism and advertising, and
this is no less true when applied to the practice of native advertising. Source credibility is defined
as “a message source’s ability or motivation to provide accurate or truthful information”
(Kelman and Hovland, 1953). Source credibility is equated with the trustworthiness of the ad,
and so it is essential that an in-feed ad is both placed within a publication that is trusted by its
target audience while simultaneously not threatening the credibility of that publication by its
content. For both publisher and advertiser, it is important to keep in mind that if a controversial
or opinion-based product or brand is natively advertised it can imply endorsement by the
publication. This can upset the consumer’s view of both the advertiser and the publication as a
credible and trustworthy source, leading to an ineffective ad with potentially negative

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associations and consequences, such as a perceived lack of authenticity of the product, brand, or
publication.
A study found that a source’s impact on the persuasiveness of an ad is strongest when the
source is revealed before the user receives the message (Nan 2013). When applied to native
advertising, this suggests it is best to prominently feature the publication’s name and its
association with the article, since the publication is its source. Since this is the case with almost
all in-feed ads, which must use disclosure statements according to the FTC, this can perhaps
account for the continued success of these kinds of articles and native advertising as a practice.
This can additionally enhance the effectiveness of in-feed ads since the reader will almost always
be aware of the publication since they have chosen to either physically open it or access it
electronically. For example, if an online reader was to click on a Buzzfeed in-feed ad,
“Buzzfeed” is the first thing the reader sees digitally, providing immediate endorsement and
validation of the advertisement’s credibility.
The same idea can be extrapolated to the logos these publications and brands utilize.
According to multiple studies, the trustworthiness of a source is most influential for consumers
in determining its credibility (Berlo et al., 1969; Whitehead, 1968). When the source credibility
of brand logos was analyzed, it strongly influenced trusting and distrusting beliefs and attitudes
toward the brand; logos were one of the first visual elements looked to when interacting with a
website (Lowry et al., 2014). Not only does this signify that viewers pay attention to the brand
that is advertising, and so it is important to make that clear in a native ad, but it also can imply
that consumers are aware of “sponsored content” and similar tags on in-feed advertisements. In
order to ensure the most ethically sound advertisement is created, this research could suggest
advertisers should consider incorporating the “sponsored content” or “paid advertisement” label

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into their brand name or logo to confirm the average reader will see it. The ability to be aware of
brand logos and labels can potentially negate the common ethical criticism of native advertising
that it is deceptive to the consumer.
Some scholars acknowledge a difference between visceral and discretional judgment when it
comes to source credibility in the field of journalism (e.g., Reich, 2011). Visceral judgment is
highly subjective and intuitive, whereas discretional judgment is based on legitimate reasoning
about the credibility of a source (Reich, 2011). Most journalists employ discretional judgment
when it comes to their sources but every so often, utilize visceral judgment (Reich, 2011). For
example, discretional judgment takes into account a source’s credentials, their past work, their
awards, and any other tangible proof they are a credible source. A reader would utilize
discretional judgment when evaluating an article in a journal and making sure it is peer-
reviewed. However, a reader might employ visceral judgment when reading something that
agrees with his or her previously established schemas; despite the fact a blog post may not be a
credible source by discretional standards, if the reader agrees with its sentiment, he or she may
be more likely to take a more intuitive approach to its credibility. When a reader is evaluating the
credibility of a publication when engaging with an in-feed ad, it is likely they are also utilizing a
combination of the two methods; this suggests that advertisers should match their native
advertisements with publications that are relevant, logical fits to the brand in order to be more
naturally accepted by the consumer.
Finally, native advertising at its best has the opportunity to appeal to the aspects of
consumers that respond to “slice-of-life” advertisements as opposed to fantastical or emotional
visuals. In a study where the same model was presented in a “slice-of-life” visual, a “fantasy”
visual, and an “emotional” visual, the model in the slice-of-life approach was viewed by

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respondents as being more experienced, more trustworthy, and more liked, regardless of
ethnicity or gender (Clow et. al, 2011). Due to the visual nature of in-feed native advertisements,
where they are meant to resemble the style of the publication’s articles, they are likely to appeal
to the reader as more realistic and relatable. Applied hypothetically, this could mean that an in-
feed advertisement in Vogue magazine discussing how a modern businesswoman styles a
particular outfit from Marc Jacobs could be viewed as more credible or trustworthy by readers
than a Marc Jacobs campaign overflowing with celebrities and opulent luxury.
Visual Rhetoric and Elements in Native Advertising
As previously shown, some argue that native advertising can be deceiving because of the very
nature of its format, but visual studies have shown consumers still process the copy of an
advertisement, regardless of how distracted they are by its visuals.
Research suggests the usage of pictures in print advertisements can be a distraction to
consumers, leading them to peripherally process copy and have more positive associations with
the brand or product since they are not evaluating the claims of the ad as closely as they might
without the pictures; a study suggested that an individual’s attitude toward a brand was
significantly more positive when the picture was large and the text small, as opposed to an ad
with a small picture and large text (Rossiter & Percy, 1978).
However, a study found that even when presented with ads which contained photographs that
had “virtually no information about the product,” people could recall a large number of product
attributes (Mitchell, 1986). Furthermore, when subjects were asked to complete a questionnaire
critically evaluating an ad, their attitudes toward the brand became more negative, possibly

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because they were cognitively processing a response that was initially more emotionally
influenced.
If applied to in-feed native advertisements, both of the aforementioned studies imply it is
most effective to generate an emotional response through copy and visual elements. Perhaps
brand logos should not be minimized as much as possible, but instead written in a font that
matches the article, so as not to interfere with the desired effect of the advertisement. Mitchell’s
findings serve to negate any ethical qualms this might inspire, since it appears individuals will
still process the copy, and most importantly in this regard, the disclosure statements, regardless
of how distracting or uninformative visual elements of the advertisements are.
When considering where to place the all-important disclosure statement, or sponsored content
disclaimer, in native advertising, analysis of visual studies offers specific and clear suggestions
for the most ethically appealing design. Recent studies show viewers are most likely to recognize
an advertisement when disclosure statements are placed in the middle or bottom of the content;
however, this increased recognition leads to an increase in negative responses to the
advertisement (Wojdynski & Evans, 2015). Nonetheless, studies of online reading behavior have
shown information near the top left corner of the page is most likely to be seen by viewers
(Nielsen, 2006). Furthermore, additional research suggests consumers are better able to
acknowledge advertising when disclosures are placed before or above the content (Boerman et.
al, 2014). When taking the results of these studies into account, it is important to remember the
purpose of native advertisement is to engage consumers in an entertaining and seamless
fashion—it is no wonder, then, that subjects responded negatively to the placement of disclosure
statements in the middle of an in-feed ad, or at the end, since these jarring statements could be
irritating to a reader. Additionally, it would seem that placing a disclosure statement in the

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middle or at the bottom of sponsored content, when the reader has already agreed to engage with
the ad, would be less transparent and ethically murkier than simply being straightforward with
the consumer and placing a disclosure statement at the top left corner of the page.
Suggested Guidelines for Effective and Ethical Utilization of Native Advertising
The following guidelines draw on the above analysis of experimental and meta-analytical
studies and the reaction of the popular press in an attempt to clarify what makes a native
advertisement both ethical and effective at this point in time.
1. Include A Disclosure Statement
From an ethical perspective, it can be argued the responsibility of the advertiser for the
implications of a native advertisement leaves his or her hands as long as the viewer possesses the
capability to be aware he or she is looking at an advertisement. The various examined definitions
of deception in advertising share in this underlying idea: if the viewer can consent to the ad
through the utilization of a disclosure statement, preferably to the top left of the page, then any
other rhetorical or visual strategies used to imitate the tone or design of the publication it is
contained within fall soundly on the side of ethical. While it appears the FTC believes it is also
acceptable by ethical standards for a viewer to not know he or she is viewing an ad as long as
that lack of knowledge does not affect their subsequent behavior, the work of scholars on the
topic would suggest this is an opportunity for further experimental research to determine if
whether the consumer is aware he is viewing an ad or not has any tangible effect on behavior.
2. Utilize Native Advertising for Hedonic & Relevant Products
Simply because a native advertisement is ethical, however, does not necessarily imply it will
be effective. The analysis of research and the climate in the popular press surrounding native

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advertising suggests it is most effective to utilize in-feed advertisements for two major kinds of
products and brands: those which are hedonic, and those which are relevant to the publication.
The Orange Is the New Black in-feed article in The New York Times was, for the most part,
positively accepted for three reasons: the advertisement was for a television show, which is a
product used for pleasure; female incarceration is a topic Times readers would be interested in;
and the writing style used by the author was consistent with that of the publication.
3. Do Not Utilize Native Advertising for Controversial or Polarizing Brand/Product
The Atlantic’s Scientology article, on the other hand, broke the cardinal rule of effective
native advertising, according to Bakshi—do not use native advertising for a controversial topic
or a topic where the public may have differing opinions. Scientology is a religion, a serious
topic, that was written about in The Atlantic in a way that did not match the style or flow of the
publication. Since native advertising is a relatively novel and somewhat ethically ambiguous
technique in the eyes of the general public, it is best not to compound any of that discomfort with
a product, brand, or kind of faith that could also inspire feelings of doubt or dissonance within
the reader.
4. Place Disclosure Statement at Top Left Corner of Page
Visually, the only crucial element is the disclosure statement that the in-feed advertisement is,
indeed, a native ad. The IAB suggests a variety of terminology that can be used to achieve this;
an opportunity for further research would be to explore which phrasing of the disclosure
statement receives the most positive response from subjects. Studies suggest placing this
disclosure at the top left corner of the page, so it is before the content (Nielsen, 2006; Boerman
et. al, 2014). Research implies it may make for a more successful advertisement to feature the
disclosure statement close to the logo, while simultaneously maximizing the emotional impact of

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the visual elements of the ad; however, more explicit research should be conducted on this matter
to determine to what extent this is the case when it specifically comes to native advertising
(Rossiter & Percy, 1978; Mitchell, 1986; Lowry et. al, 2014; Wojdynski & Evans, 2015).
5. Feature Publication Logos Prominently in In-Feed Ads
Source credibility studies support the claim that logos are one of the primary visual elements
looked to when clicking on a website; additionally, they can be highly influential in determining
how a consumer perceives the trustworthiness of an advertisement, an article, or an in-feed ad
(Lowry et al., 2014). In The New York Times’ well-received in-feed ad regarding Orange Is the
New Black, the Times’ logo appears at the top of the page, followed by the logo of the “T Brand
Studio,” the native advertisement studio that created the ad at the top left of the page, with the
words “Paid Post” and the Netflix and Orange Is the New Black logos appearing in the center
beneath the Times’ logo (Deziel, 2014). Additionally, as one scrolls through the article, all of
these logos at the top continue to follow the reader while taking up only about one-eighth of the
screen space. This is a prime example of how to most ethically and effectively incorporate brand
and publication logos into an in-feed native advertisement.
Conclusion
It is not to say that it is impossible for a native advertisement to be ethically ambiguous
or offensive, or that every in-feed ad achieves its strategic objectives. One must only look at the
failed case of The Atlantic’s in-feed ad about Scientology to understand the concerns some
advertisers and journalists harbor toward the practice. However, what should be taken away is
that ethical dilemmas and ineffective creative are problems which arise in all kinds of
advertisements, from out-of-home to Super Bowl commercials. As long as there are official
guidelines and definitions that can be agreed upon by the advertising and journalism

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communities, there is no reason that native advertising, which can be inspiring, informational,
and innovative at its best, should be reprimanded for being a deceptive or inefficient technique.

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