Study is One of First to Examine Effectiveness of Native Advertising

There is now research to prove a correlation between the serial position of a native advertisement and the ad’s effectiveness. This study is among the first to examine native ads in this way. Serial position is a term used to describe where native advertisements appear in a list of news articles or a social media stream.

Guiyang Xiong, assistant professor of marketing at Syracuse University’s Martin J. Whitman School of Management, joined forces with Pengyuan Wang, assistant professor of marketing at the University of Georgia, and Jian Yang, senior research director at Oath Inc., to examine native advertisements and evaluate how their effectiveness changes by serial position.

The study, “Serial-position effects on native-advertising effectiveness: Differential results across publisher and advertiser metrics,” shows that compared to traditional undisguised ads, native ad effectiveness changes in a predictive manner as ad serial position lowers. Native advertising is a form of paid media that appears in a form of media in a manner that looks natural. Sponsored posts on social media and news websites, for example, are a popular form of native advertising.

“Native ad is proliferating in the online ad industry, but it is under-studied in marketing literature,” said Professor Xiong. “The topic came about during a conversation with an industry expert at a leading web portal, and we looked into it.”

Advertising cost is based on serial position. The research pinpoints which positions typically give advertisers the best return for the price. One of the distinct findings of the study is that advertisers typically overpay for lower rank positions that are not as valuable as the price tag makes it seem.

The research distinguishes the impact on publishers as compared to advertisers. For publishers, the performance of a native ad only drops moderately when serial position becomes lower. But for advertisers, the impact of serial position on conversion rate and return on investment is extreme.

Moreover, the moderating effects of audience gender and age are asymmetric for publishers’ metrics versus advertisers’ metrics. The study gives tips to advertisers on how they can improve advertising performance based on this information.

During the research phase, the team of researchers examined large-scale field data on 120 native ads covering more than 180 million ad impressions.

Professor Xiong said the study is useful for marketing practitioners, including online ad publishers and advertisers, as well as advertising researchers

The study is forthcoming in the Journal of Marketing.

Kenneth Mintz
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