Do consumers really understand “native advertising” labeling?

There’s no question that “native advertising” – paid editorial content – has become a popular “go-to” marketing tactic. After all, it’s based on the time-tested notion that people don’t like advertising, and they’re more likely to pay attention to information that looks more like a news article than an ad.

Back in the days of print-only media, paid editorial placements were often labeled as “advertorials.” But these days we’re seeing a plethora of ways to label them – whether identified as “sponsored content,” “paid posts,” or using some kind of lead-in descriptor such as “presented by …”

Behind all of the verbal gymnastics is the notion that people may not easily distinguish native advertising from true editorial if the identification can be kept somewhat euphemistic. At the same time, the verbal “sleight of hand” raises concerns about the obfuscation that seems to be going on.

These dynamics have been tested. One such test, conducted several years ago by ad tech company TripleLift, used biometric eye-tracking to see how people would view the same piece of native advertising, that carries different disclosure labeling.

The results were revealing. Here are the percentages of participants who saw each ad, based on how the content was labeled:

  • Presented by” labeling: ~39% saw the content
  • “Sponsored by” labeling: ~29%
  • “Promoted by” labeling: ~26%
  • “Brought to you by” labeling: ~24%
  • “Advertisement” labeling: ~23%

Notice that the content that was labeled “advertisement” was noticed the least often. This provides yet more confirmation that people ignore ads.  When advertisers used softer/fuzzier terms like “presented by” and “sponsored by,” they achieved a bigger lift in the content being noticed.

It comes as little surprise that those same “presented by” and “sponsored by” labels are also the most potentially confusing to people regarding whether the item is paid content. And when people find out the truth, they tend to feel deceived.

Members of the Association of National Advertisers look at it the same way. In an ANA survey of its members conducted several years ago, two-thirds of the respondents agreed that there should be “clear disclosure” of native ads – even if there’s a lack of consensus regarding who should be responsible for the labeling or what constitutes “clear” disclosure.

Asked which labeling describes native ad disclosure “very well,” here’s what the ANA survey found:

  • “Advertisement”: 62% say this labeling describes native ad placements “very well”
  • “Paid content”: 37%
  • “Paid posts”: 34%
  • “Sponsored by”: 31%
  • “Native advertising”: 12%
  • “Presented by”: 11%
  • “Promoted by”: 11%
  • “Branded content”: 8%
  • “Featured partner”: 8%

Considering that the findings are all over the map, it would be nice if a universal method of disclosure could be devised. But the language that’s agreed upon shouldn’t scare away readers, since in so many cases native advertising isn’t directly pitching a product or service.  Labeling such content “advertising” would be as much of a misnomer as failing to divulge the company paying for the placement.

My personal preference for adopting consistent labeling language among the options above would be “Sponsored by …”  What’s yours?

The “creeping crisis” for newspapers seeps into yet another corner of the industry.

Newspaper revenue trend lines are problematic, to say the least.

The travails of the newspaper industry aren’t anything new or surprising. For the past decade, the business model of America’s newspapers has been under incredible pressures.  Among the major causes are these:

  • The availability of up-to-the-minute, real-time news from alternative (online) sources
  • the explosion of options people have available to find their news
  • The ability to consume news free of charge using most of these alternative sources
  • The decline of newspaper subscriptions and readership, leading to a steep decline in advertising revenues

Exacerbating these challenges is the fact that producing and disseminating a paper-based product is substantially more costly than electronic delivery of news. And with high fixed costs being spread over fewer readers, the problems become even more daunting.

But one relative bright spot in the newspaper segment — at least up until recently — has been local papers. In markets without local TV stations, such papers continued to be a way for the citizenry to read up on local news and events.  It’s been the place where they could see their friends and neighbors written about and pictured.  And let’s not forget high-school sports and local “human-interest” news items that generally couldn’t be found anywhere else.

Whatever online “community” presence there might be covering these smaller markets — towns ranging from 5,000 to 50,000 population — is all-too-often sub-standard — in some cases embarrassingly bad.

But now it seems that the same problems afflicting the newspaper segment in general have seeped into this last bastion of the business.

It’s particularly ominous in places where daily (or near-daily) newspapers are published, as compared to weekly pubs. A case in point is the local paper in Youngstown, Ohio — a town of 65,000 people.  Its daily paper, The Vindicator, has just announced that it will be shutting its doors after 150 years in business.

The same family has owned The Vindicator for four generations (since 1887).  It isn’t that the longstanding owners didn’t try mightily to keep the paper going.  In a statement to its readers, the family outlined the paper’s recent struggles to come up with a stable business model, including working with employees and unions and investing in new, more efficient presses.  Efforts to raise the price of the paper or drive revenue to the digital side of the operation failed to secure sufficient funds, either.

Quoting from management’s statement:

“In spite of our best efforts, advertising and circulation revenues have continued to decline and The Vindicator continues to operate at a loss.

Due to [these] great financial hardships, we spent the last year searching for a buyer to continue to operate The Vindicator and preserve as many jobs as possible, while maintaining the paper’s voice in the community. That search has been unsuccessful.”

Youngstown, Ohio

As a result, the paper will cease publication by the end of the summer. With it the jobs of nearly 150 employees and ~250 paper carriers will disappear.  But something else will be lost as well — the sense of community that these home-town newspapers are uncommonly able to foster and deliver.

For a city like Youngstown, which has seen its population decline with the loss of manufacturing jobs, it’s yet another whammy.

Because of the population loss dynamics, it might seem like local conditions are the cause of The Vindicator‘s situation, but some see a bigger story.  One such observer is Nieman Journalism Lab’s Joshua Benton, who writes:

“I don’t think this is just a Youngstown story. I fear we’ll look back on this someday as the beginning of an important — and negative — shift in local news in America.”

What do you think? Is this the start of a new, even more dire phase for the newspaper industry?  Is there the loss of a newspaper that has his your own community particularly hard? Please share your thoughts with other readers here.

Roads to … nowhere?

Google Maps admits its business listings are riddled with errors and outright fraudulent entries.

The news reports hit fast and furious this week when the media got wind of the millions upon millions of “faux” business listings on Google Maps, thanks to a new Wall Street Journal exposé.

It’s true that there are a ton of map listings displayed by Google on search engine results pages, but the latest estimates are that there are more than 11 million falsely listed businesses that pop up on Google searches on any given business day.

That number may seem eyebrow-raising, but it’s hardly “new news.” Recall the reports that date as far back as a half-decade — to wit:

  • In 2014, cyber-security expert Bryan Seely showed how easy it was to use the Internet’s open architecture to record telephone conversations and create fraudulent Google Maps listings and locations.
  • In 2017, Google released a report titled Pinning Down Abuse on Google Maps, wherein it was estimated that one in ten fake listings belonged to actual real-live businesses such as restaurants and motels, but that nefarious third-parties had claimed ownership of them. Why do this? So that the unscrupulous bad-actors could deceive the targeted businesses into paying search referral fees.

Google is owning up to its continuing challenges, this week issuing a statement as follows:

“We understand the concerns of those people and businesses impacted by local business scammers, and back in 2017 we announced the progress we’d made. There was still work to be done then, and there’s still work to be done now.  We have an entire team dedicated to addressing these issues and taking constant action to remove profiles that violate our policies.”

But is “constant action” enough? Certain business trades are so riddled with fake listings, it’s probably best to steer clear of them altogether.  Electricians, plumbers and other contractors are particularly sketchy categories, where roughly 40% of Google Maps listings are estimated to be fraudulent entries.

The Wall Street Journal‘s recent exposé, published on June 24th, reported on a search its researchers conducted for plumbers in New York City.  Of the top 20 Google search results returned, only two actually exist where they’re reported to be located and accept customers at the addresses listed.  That’s pretty awful performance even if you’re grading on a curve.

A measure of progress has been made; Google reports that in 2018 it removed some 3 million fake business listings. But that still leaves another 11 million of them out there, silently mocking …

The wider implications of the “deliver it to my door” mentality.

There’s been quite a bit of attention paid to the impact of online retail on bricks-and-mortar sectors like shopping centers.  More than a few of them have started looking like Potemkin Villages. Some forecasts predict that the number of indoor shopping malls in America will contract by as much as one-third in the coming years.

On the other hand, the changing dynamics of e-tailing are having the opposite effect when it comes to shipping logistics … because not only are consumers shopping online in record numbers, they’re also taking advantage of delivery options that are bringing merchandise directly to them in 24 or 48 hours – even same-day deliveries in some cases.

What this means is that the efficiencies in procurement, inventory and distribution that drove many distribution centers to be built in outlying locations aren’t exactly working in today’s “deliver it to me and deliver it to me now” mindset.

[This is why we’re hearing about solutions such as drone deliveries – but that’s still a ways in the future and could eventually begin to cause congestion in a new realm – up in the air.]

In the meantime, more delivery vehicles than ever are competing with commuter traffic on already-congested highways during peak time periods. A shortage of qualified truckers is spurring development of driverless trucking, while the delivery system as a whole is running at full capacity (if not full efficiency).

Of particular concern is the so-called “last mile” delivery aspect in urban environments. It isn’t merely the issue of traffic congestion.  It’s also city planning codes (outdated), parking restrictions (made even more difficult thanks to the current fad in “progressive” cities of adding bike lanes while removing on-street stopping and parking), and load limitations (adding even more challenges and complexity).

But nature abhors a vacuum, and there are some interesting developments happening to address the challenges. The use of data analytics is growing exponentially, with route maps, GPS data, and real-time expected-versus-actual travel time updates allowing for transport rerouting to happen “in the moment.”

Other novel solutions, such as smart lockers that receive multiple shipments in a central location, plus the use of mobile warehouses within urban areas enabling less reliance on the big remote distribution centers, are emerging.

Burgeoning ride-sharing services like Uber and Lyft are contributing to more congestion in urban areas – just think how many more ride-sharing vehicles are on the road today compared to taxi cabs in the past. But in rural or remote areas the opposite issue is in play – difficult accessibility.  This is where drone deliveries are a welcome development — including during in the wake of natural disaster occurrences where traditional transportation methods might be impossible — or at the very least highly dangerous.

What are your thoughts about the friction between “convenience and congestion”?  Will technology help us smooth out the rough edges — or are we in for even more frustrations?  Please share your thoughts with other readers here.

Facebook attempts to clean up its act.

Is it enough?

Watching Facebook these days as it pivots from diffusing one “rude development” to another seems a little like watching someone perform a combination plate-spinning and whack-a-mole act.

We’ll call it the Facebook Follies.  The question is … is it working?

Last month, Facebook issued its newest Community Enforcement Report – a document that updates the world about improvements the social media giant is making to its platform to enable it to live up to its stated community standards.

Among the improvements touted by the latest report:

  • Facebook reports now that ~5% of monthly active accounts are fake. (Still, 5% represents nearly 120 million users.)
  • Facebook reports now that its ability to automatically detect “hate speech” in social posts has jumped from a ~24% incidence in 2018 to ~65% today. (But this means that one-third of hate speech posts are still going undetected.)

Moreover, Facebook now reports that for every 10,000 times Facebook content is viewed by users:

  • ~25 views contain content that violates Facebook’s violence policy
  • ~14 views contain content violating Facebook’s adult nudity and sexual activity policy
  • Fewer than 3 views contain content violating Facebook’s policies for each of these categories: global terrorism; child nudity, and sexual exploitation

The community enforcement information is being reported as “wins” for Facebook … but people can’t be faulted for thinking that Facebook could (and should) be doing much better.

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Facebook CEO Mark Zuckerberg

On a different type of matter, this past week it was reported that Facebook has agreed to settle a class-action complaint that accused the social platform of inflating viewing metrics on Facebook videos by up to 900%.

Although details of the settlement haven’t been revealed, this development appears to close the book on criticisms that were lodged as far back as 2016, in which advertisers charged that Facebook hadn’t investigated and corrected errors in its metrics — nor allowed for third-party verification of the metrics.

It’s yet another agenda item that’s now been ticked off the list – at least in Facebook’s eyes. But now another controversy has now erupted as reported over the past few days in The Wall Street Journal.

Described in a front-page article bylined by veteran WSJ reporters John McKinnon, Emily Glazer, Deepa Seetharaman and Jeff Horwitz, Facebook CEO Mark Zuckerberg appears linked to “potentially problematic privacy practices” that date all the way back to 2012, when Facebook signed a consent decree with the Federal Trade Commission but that it may have violated subsequently.

Contemporaneous e-mail communications retrieved from the time period suggest that Zuckerberg was more than merely passively involved in deliberations about a particular app that claimed to have built a database stocked with information about millions of Facebook users. Purportedly, the app developer had the ability to display the Facebook user information to others — regardless of those users’ privacy settings on Facebook.  The e-mails in question detail speculation about how many other apps were stockpiling such kinds of user data, but the evidence shows little or no subsequent action being taken to shut down the data mining activities.

Another view.

These latest developments raise questions about the veracity of Facebook’s stated intentions to redouble its efforts to uphold community standards and focus more on user privacy, including moving toward encrypted and “ephemeral” messaging products that are better aligned with the European Union’s existing privacy laws that the United States may also be poised to adopt in the future.

Apparently Facebook recognizes the problem: It’s ramping up its global advertising spending to “rebuild trust” — to the tune of doubling its previous ad expenditures.  Here’s what Facebook’s marketing head Antonio Lucio is saying:

“There’s no question we made mistakes, and we’re in the process of addressing them one after the other.  But we have to tell that story to the world on the trust side as well as the value site.”

Ad-tracking company Kantar notes a big increase already in Facebook’s U.S. ad spending — up to nearly $385 million in 2018 compared to only around $50 million the year before.  As for the campaigns themselves, Facebook is relying on a number of big-name ad agencies like Wieden+Kennedy, Leo Burnett and Ogilvy for developing its various campaigns.

Another view.

There’s more than a little irony in that.

Considering the latest news items, what are your thoughts about Facebook? Are they on the right track … or is it “too little, too late”?  Are their intentions honorable … or are they simply engaged in “window dressing” to get people off their case?  Let us know your thoughts.

Pandora’s Box: Spotify is poised to become the #1 music streaming service in the United States.

This past month, digital marketing research firm eMarketer issued its new forecast on music streaming activities in the United States. What it shows is that Pandora, which has dominated the market ever since the category was created in 2000, will likely fall to the #2 position, overtaken by Spotify.

Based on a calculation of internet users of any age who listen to music streaming on any device at least once per month, Pandora jas occupied a narrow band of between 72 million and 77 million listeners since 2015.

During that same period, Spotify users have increased dramatically, from ~24 million to ~65 million Americans. And eMarketer projects that Spotify will overtake Pandora by 2021.  The chart below shows the trajectory:

Actually, the trend had been building since even before 2015. In 2012, Pandora had ~67 million users compared to Spotify’s paltry ~5 million.  But Pandora has been shedding users in recent years.  As the chart above illustrates, by 2023 Pandora will have lost nearly 10% of its users since 2014.

To be sure, Pandora still holds a robust ~35% of audio listener penetration in the United States as of this year. But Spotify is nipping at its heels with a ~32% share.  Amazon Music (~18%) and Apple Music (~16%) are further back, but with still-significant chunks of the marketing.  (It should be noted that there is overlap, as some listeners may engage with more than one music streaming service during the month.)

What has caused the change in fortunes? Christ Bendtsen, an eMarketer forecasting analyst, says this:

“Pandora lost users last year because of tough competition from other services attracting people to switch. Apple Music has been successful in converting its iPhone user base.  Amazon Music has grown with smart speaker adoption, and Spotify’s partnerships have expanded its presence across all devices.”

Speaking in particular about Spotify’s rapid surge, Bendtsen notes:

“Spotify’s initial growth was driven by its unique combination of music discovery, playlists and on-demand features. But now that all music streaming services [possess] the same features, Spotify’s future success will rely on partnerships with other companies.  It has teamed up with Samsung, Amazon, Google and Hulu to be on all devices and provide bundled offerings.  We expect more partnerships to come, leveraging multiple brands, devices and services to drive user growth.”

As for Apple Music, there’s a reason it lags behind other music streaming services in the rankings. That service operates on a subscription-only model and doesn’t offer any form of advertiser-supported free usage.  Forecasters expect it to remain in the #4 position with its “premium-only” business model.

More information about the eMarketer music streaming forecast is available here.

What are your own music streaming listening habits? Have they changed in recent years, and if so, how and why?  Please share your thoughts with other readers.

Music industry mashup: Streaming audio sets the pace.

… while digital downloads fade and physical music media sales hold steady.

The music industry revenue reports issued annually by the Recording Industry Association of America (RIAA) are always interesting to look at, because they chronicle the big trends in how people are consuming their music.

The 2018 RIAA report is particularly enlightening, as it finds that streaming audio now accounts for three-fourths of all U.S. music industry revenue. With more than 50 million Americans subscribing to at least one streaming service, those revenue stats certainly make sense.

Moreover, the RIAA report states that 2018 revenues from streaming music platforms amounted to nearly $7.5 billion. That compares to just $1.1 billion (~11%) for digital downloads and $1.2 billion (~12%) for physical media sales.

Equally significant, streaming revenues account for nearly all of the revenue growth experienced across the entire industry – and the growth is dramatic. Streaming revenues jumped ~30% between 2017 and 2018, whereas growth in the other segments was essentially flat.

Within the streaming segment, all three major sectors – premium subscriptions, ad-supported on-demand streaming, and streaming radio – experienced revenue growth.  But paid subscriptions continue to comprise the biggest chunk of revenue; they make up ~73% of all streaming revenues, or $5.4 million.

Ad-supported on-demand streaming is also proving to be quite popular with users, but while revenues grew by some 15% in 2018 to reach $760 million, it’s pretty clear that ad-supported streaming audio services lag behind in terms of generating revenues. Ad-supported streaming may account for more than one-third of all streaming activity … but only ~8% of streaming revenues.

The third segment — radio streaming services – looks to be a particularly bright spot. These services are evolving nicely, passing the $1 billion mare in revenues in 2018 for the first time.

But the main takeaway is this:  Streaming audio now represents the “mainstream” while digital downloads are going the way of the cassette tape in an earlier era. And physical media (CDs, vinyl) have stabilized to a degree that many observers might not have anticipated happening just a few years ago.

More information from the 2018 RIAA report can be viewed here.

What are your own personal music consumption preferences? Feel free to share your thoughts with other readers here.