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With brands, affiliates and everyone in between rushing to post more content on their websites to bring up their SEO ranking and lure in more visitors and customers, a new study questions consumers trust of content – specifically “sponsored content”.

In recent years, more and more online marketers have begun using sponsored content as a way to bring attention to products/services and offers. Typically this means that the site where the content appears has received some sort of compensation (whether it’s the product free to review, a fee for posting the content or the website was paid to write the content) from the brand to place what looks to be an article on their site. In the old days of print publishing, these were often called advertorials and typically clearly labeled as such.

These days it’s often hard to tell the difference between editorial content and sponsored content. This confusion or deception has lead to new disclosure laws from the Federal Trade Commission (FTC) requiring that posting such sponsored content must include a disclaimer (either right after the content or somewhere easily visible on the website) that lets visitors know the website received some form of payment or something of monetary value or some compensation to put this content on their site.

But according to a recently released study by Contently, most respondents are not trusting of sponsored content. That is a problem since the building blocks of most websites include cultivating a following a loyal visitors by gaining their trust as a subject authority or valued resource.

The study, conducted in June, 2014, asked readers some of the most important questions about how they think about branded content, from what’s conveyed by the term “sponsored content,” to how likely they are to click on it, and how heavily factors like age and education play into those behaviors.

Trust in Sponsored Content (Adults 18-65)
Trust Attitude % of Respondents
Generally trust

4.8%

Only trust if trust publication

18.8

Only if I trust brand already

22.5

No, generally don’t trust

53.9

Source: Contently, July 2014

Most publishers assume that readers know what it means when a post is labeled “Sponsored Content.” But the majority of readers can’t agree on one clear answer.

What “Sponsored Content” Means on Online News Article
Meaning % of Respondents
A sponsor wrote the article

12.6%

A sponsor paid for its name to appear next to content

18.0

News site wrote it, but sponsor’s money paid

20.0

Sponsor paid and influenced the article

48.2

Source: Contently, July 2014

Here are some of the study’s other key finding:

  • Two-thirds of readers have felt deceived upon realizing that an article or video was sponsored by a brand
  • 54% of readers don’t trust sponsored content
  • 59% of readers believe a news site loses credibility if it runs articles sponsored by a brand
  • As education level increases, so does mistrust of sponsored content
  • And yet, respondents rated branded content as more trustworthy than Fox News, and nearly equally trustworthy as MSNBC, indicating that content has a mistrust problem overall

But even if readers don’t understand what branded content means, do they prefer it to the much-maligned banner ad? If you work in digital media, the answer may surprise you. 57% of readers said that they’d prefer that their favorite blogs and news sites run banner ads instead of sponsored articles.

Preference For Sponsored Articles From Favorite News Sites vs. Banner Ads
Preference % of Respondents
Yes, Sponsored posts more interesting

18.27%

Yes, Banner ads are annoying

25.54

No, rather have banner ads

57.20

Source: Contently, July 2014

Respondents were also asked if they ever felt deceived after realizing an article was sponsored by a brand.

  • Yes… 66.6%
  • No… 25.8%
  • Not aware of seeing sponsored content… 7.6%

Two-thirds of respondents are also less likely to click on an article sponsored by a brand compared to regular site editorial.

How Likely Are You To Click On An Article Sponsored By A Brand?
Likely % of Respondents
More likely

0.74%

Just as likely if it looks interesting

32.84

Not as likely

66.42

Source: Contently, July 2014

When readers do click, how likely are they to trust what they click on? A little more than half of respondents said that they generally don’t trust content from brands. Among those who said that they do trust sponsored content, preexisting trust in the brand, and not the publication, was the biggest factor in doing so, by a factor of 23% to 19%.

Do You Trust Sponsored Content?
Trust % of Respondents
Generally

4.8%

Only if I trust the publication

18.8

Only if I trust the brand already

22.5

No, generally don’t trust

53.9

Source: Contently, July 2014

Unsurprisingly, says the report, respondents with graduate degrees were nearly twice as likely to distrust sponsored content as those with high school diplomas.

For publishers, this brings up a big question: How is sponsored content affecting the way readers think of them? Are they losing credibility? The majority of respondents said that news sites are losing credibility when they run articles sponsored by a brand.

Do You Think News Site Loses Credibility Running Brand Sponsored Articles?
Response % of Respondents
No, business is business

17.7%

No, so long as the articles are good

23.6

Yes

58.7

Source: Contently, July 2014

And the likelihood of feeling that way increases as education level increases, which may be troublesome to publishers that boast a highly educated readership. This is one area, though, where millennials were more lenient, with only 49% of respondents aged 18–29 saying that a news site loses credibility if it runs sponsored content.

Print advertorial is seen as higher quality than online sponsored content, though sometimes seen as less honest. And interestingly, says the report, banner ads are seen as very transparent.

The report concludes by acknowledging that sponsored content is booming, but it’s clear from the survey data that brands and publishers still have a long way to go to earn readers’ engagement, attention, and trust