Native advertising, also called sponsored content, is a cross between traditional advertising and an editorial, hence the older name, advertorial (although this isn't used much in online spaces). From the news outlet’s perspective, native advertising is advertising: an organisation has paid for ad space, and is running an ad.
But from a reader’s perspective, it’s not so easy to tell. Sponsored content can sound authoritative, it often looks and reads exactly like the rest of the publication, and it’s very easy for readers to interpret sponsored content as actual news or news commentary. For a great example of native advertising, take a look at this feel-good story on Slate.com, sponsored by Wells Fargo, a financial company that's had more than a few brushes with controversy.
Buzzfeed are really good at native advertising. In fact, Buzzfeed are so good at it, they don’t even bother with traditional banner or sidebar ads anymore; they’re all about working
"with brands and agencies to craft custom social posts that are designed for sharing. Content ranges from humor to inspirational, and comes in various formats, lists to premium content like quizzes, infographics, and cinemagraphs. Custom social posts are crafted in an authentic voice that communicates a brand's aspirations and themes, and inspires consumers to share."
Source: https://www.buzzfeed.com/advertise
So while it looks like you’re reading a regular post or list, or doing a fun quiz, you’re actually consuming content that’s been bought and created by someone with something to sell. And you might not even be sold a specific product - the brand itself it often what native advertising is selling.
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