As 2016 comes to an end, the media industry faces an uncertain future.

Fake news has flooded Facebook, captivated the attention of people across the nation, and likely influenced a presidential election. A BuzzFeed report found that the top 20 fake news stories about the election were shared 1.4 million times more than the top 20 real news stories. While this huge disparity speaks to the nature of how Facebook presents content, it’s also indicative of a scary stat: Trust in mass media among Americans has plummeted to 32 percent, an all-time low. When Americans don’t trust verified news sources, they’re more likely to trust those that present a false narrative.

This drop in trust has triggered a lot of self-examination within the media industry. And when it comes to trust, it’s hard not to talk about the ramifications of native advertising.

Native advertising has become a crucial part of publishers’ business models. At companies like Slate, The Atlantic, and The Daily Beast, native ads—sponsored articles or videos that resemble traditional editorial work—now account for the majority of digital ad revenue. But we still know relatively little about how consumers perceive native content, whether they identify it as advertising, and how it impacts publisher trust.

This fall, Contently partnered with The Tow-Knight Center for Entrepreneurial Journalism at CUNY and Radius Global Market Research to understand how consumers identify and perceive native content. Through focus group studies and a survey of 1,212 adults who regularly access the internet, we found:

• 54 percent of respondents have felt deceived by native advertising in the past.
• 77 percent of respondents did not interpret native ads as advertising.
• 44 percent were not able to correctly identify the sponsor of the native ad they read.
• When a trusted publisher features native advertising for an untrustworthy brand, 43 percent of consumers lose trust in that publisher.
• Conversely, when a trusted publisher features native advertising for a trustworthy brand, 41 percent of consumers gain trust in that publisher.
• “Sponsored” is the clearest label for native advertising to consumers.
• Consumers have a much easier time recognizing native advertising on Facebook than on publisher sites.

To dig into the full results of this study, download “Fixing Native Advertising: What Consumers Want From Brands, Publishers, and the FTC” and check out the infographic of our findings below.

And if you have any questions, contact me at lazer@contently.com.