Covert ads in the era of digital marketing

Year of production: 2020

Covert ads in the era of digital marketing

What do Kim Kardashian, Rihanna and Pharrell Williams have in common? Besides being rich and famous, they were amongst the 90 celebrities that were called out by advocacy group Public Citizen in 2017 for misleading their social media followers for the seemingly sincere endorsing of products they had in fact been paid to endorse (BBC, 2017; Public Citizen, 2017). This is a problem, as consumers tend to respond differently to celebrity-backed endorsements, therefore making secret advertisement deals foul play. 

In the same way sponsored content has almost unnoticeably snuck its way into our social media feeds, marketing texts have made their way to news media. What are native ads, how did we get here from good old pop-ups, how are we being manipulated and how can we recognise covert ads?

A new era in digital marketing

Pulizzi (2012) defines content marketing as storytelling in the same format as the publishing medium, which is used to create a positive outlook of the brand or product through constant content creation. However, this definition focuses on branding via the company’s own communication channels, such as the website, social media accounts, press releases, email lists, handouts or a whole new channel created specifically for a campaign. A good example of content marketing is John Deere’s corporate magazine The Furrow, which also educates its readers on innovations in the field apart from simply looking to sell machinery (Pulizzi, 2012). The term native advertising refers to publishing in a journalistic context and companies paying for the privilege of publishing on the pre-existing platforms of news media, such as websites or social media accounts (Õunpuu, 2017). 

The market for native ads is growing fast, with legislation and ethics unable to keep up. More than 61% of all display advertising in the United States (or 41.1 billion dollars) was projected to have been spent on native ads in 2019 (Mullin, 2018). In order to understand how we got here from the roots of the marketing industry that Mad Men has romanticised in pop culture, we need to understand how an ad’s worth is measured in the digital marketing era. 

In the early days of the internet, publisher-based click-through rates (CTR) were used – people would click on pop up and banner ads and advertisers would get paid for it (Wang, Xiong, Yang, 2018). Pretty easy, right? Nowadays, the CTR rate hovers around 0.05% on average, meaning most people avoid pop-up ads altogether by using Ad Blocker or similar software (Wang, Xiong, Yang, 2018). Digital marketers needed a new way to connect with consumers – enter native advertising

Native ads are inserted into the web stream of media they already consume, which made consumers engage with ads again, as they click, read and share sponsored content more readily (Wang, Xiong, Yang, 2018). New conversion-based (CVR) metrics are used to measure the success of native ads in how engagement with the ads is converted into actual business (Wang, Xiong, Yang, 2018). A good native ad is one that is fine tuned into the established editorial style of the publication; and even though it might be labelled as sponsored content, it is indistinguishable from other news stories and therefore often confused for original journalistic content (Shewan, 2020).

So, in short – native ads are ads posing as fact-checked and researched news stories that are meant to blend in with the non-sponsored content surrounding them. Almost any activity with the sole purpose of trying to increase the sales of certain goods or services can be seen as advertising. What worries regulators about this particular format of advertising is the possible deception of consumers, as the advertising disclosure is often unclear, incomplete or missing completely (Sahni & Nair, 2019).

Manipulating consumers or not?

As our information environment is changing and the sheer amount of data out there is reaching cosmic proportions, the information literacy skills that are necessary to filter out trustworthy and fact-checked information from content marketing have become increasingly important (Klaassen, 2018). However, studies show that even teenagers and university students (the target group that is usually regarded as the most digitally savvy) cannot identify hidden advertising, political agendas or content marketing in social media (Wineburg, McGrew, Breakstone, Ortega, 2016), which can lead to information disorders. 

Native advertising needs to be marked accordingly and be distinct from original content – this is where most ethics codes for journalists agree with researches and lawmakers, as eye-tracking research has shown that only consumers who viewed the disclosure of the sponsored nature of a native ad were able to distinguish it as advertising (Wojdynski & Evans, 2016). Consumers, however, often miss or misinterpret these disclosures, such as in sponsored social media posts where disclosures are now standardised by the platform (Boerman et al. 2017; Johnson, Hastak, Jansen, and Raval 2018) or where disclosures vary widely, as in native advertisements (Amazeen & Wojdynski, 2018).

Most researchers agree that it should be the responsibility of the publishing medium to clearly distinguish marketing from journalistic content, as the consumer usually lends the trust they have for mainstream media to new digital mediums, too (Himma-Kadakas, 2017). That would enable companies to present statements about their business in a newspaper with no fact check behind it at all, whilst consumers process the information as if it were a news story. 

The practice of marking and distinguishing ad content is therefore an act of disclosure for consumers that says: even though this might look like a news story, the facts have not been checked, third sources have not been included and we have been paid to publish this story as is, even if it might be misleading. In unmasking the work process behind stories or content that might appear to look like news, consumers can decide on the trustworthiness of the information themselves. That, all in all, is the biggest ethical as well as legislational dilemma with covert advertising: it deliberately affects “consumers’ ability to recognize, classify, and resist persuasive messages by making them appear as something they are not” (Wojdynski & Evans, 2019).

How to spot covert ads?

The legislation has yet to catch up with this new trend in digital marketing. Native ads are in the same grey area that television product placements were in for quite some time. Some countries have already distinguished content marketing and native advertising in their laws, regulating how readers should be informed about how and why the content was created. On a larger scale, however, there is still no one right way to go about it, which means that until regulation catches up, we must be more aware as consumers. 

There are two main strategies to identify covert ads according to Wojdynski & Evans (2019): disclosure-driven and context-driven. 

Disclosure-driven or top-down ad recognition usually demands some knowledge from the consumer about the publisher or advertiser to even scan the page for disclosures, which means consumers that are heavier users of the platform may become used to their style of disclosure and notice it better (Wojdynski & Evans, 2019). So – if you are a frequent visitor of certain pages or platforms, try and identify their style of disclosing ad deals and get accustomed to scanning content for clues, like a digital Sherlock Holmes.  

Context-driven or bottom-up ad recognition “involves the user coming to the conclusion that a message’s source and intent may be different than they first appear” (Wojdynski & Evans, 2019). This is rooted in the theory that the person receiving information can perceive one message completely differently depending on who is conveying the message and what they think about them (Sundar & Nass, 2001).

Researchers have found that whether the consumer detected sponsored content or not was more dependent on the consumer’s personal knowledge of digital advertising tactics and ad recognition, not how well the nature of the native ad was disclosed (Jung & Heo, 2019). That means the biggest weapon in our psychological self defense arsenal against being unknowingly manipulated is… our own individual knowledge.

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Photo of Maia Klaassen
Maia Klaassen

Maia works as a Development Specialist at the University of Tartu and the main focus of her job, as well as her research, is in the field of information disorders. As research suggests, it is not possible to fight against the destabilising effects of the phenomena without involving media and information literacy. Taking this into account, Maia balances her research with Media and Information Literacy (MIL) projects, both as a project lead and a youth trainer. Her main focus for the coming years will be to find and highlight best-practice MIL training that could be taken from the formal and informal education system, which tend to cater to the young, but also to the whole population. She is currently coordinating the Baltic MIL network, in order to create a multinational hub to fight disinformation. She also heads the Estonian Digital Research Centre, which looks after the interactive information manipulation risk matrix at