Stagwell (STGW) Releases News Advertising Study Revealing It is Safe for Brands to Advertise Adjacent to Quality News Content Despite Overblown Fears

Rhea-AI Summary

Stagwell (STGW) has unveiled a comprehensive study revealing that ads placed next to news stories on politics, inflation, and crime perform as effectively as those placed next to traditionally 'safe' topics like business, entertainment, and sports. This survey, which included 50,000 U.S. adults, debunks common myths surrounding 'brand safety' for advertisers, particularly among key demographics like Gen Z, affluent households, and moms. The results suggest that advertisers can benefit from engaging with news content, which could help support quality journalism financially. The findings will be further discussed at Stagwell's 'Future of News' summit in New York.

Positive

• The study shows ads next to 'risky' news topics perform as well as 'safe' topics, potentially increasing ad placements in news.
• Survey data highlight minimal differences in purchase intent across varied news topics (65-69% for Gen Z, 70-72% for affluent households).
• Stagwell's findings could lead advertisers to support quality journalism, aiding financial stability in news media.
• The survey incorporates a large sample size of 50,000 U.S. adults, providing robust data.
• Initiation of 'Future of News' studies and events could foster important discussions on advertising in news.

Negative

• The study's findings contradict widely-held 'brand safety' practices, potentially causing hesitation among conservative advertisers.
• A minimal difference of two to four percentage points in purchase intent might not be compelling enough for all advertisers.
• There is a risk that advertisers might still avoid controversial topics despite the study's results.
• The financial impact on Stagwell remains uncertain despite potential positive outcomes.

Groundbreaking 50,000-respondent survey shows ads placed adjacent to stories covering politics, inflation and crime perform as effectively as ads placed next to business, entertainment and sports stories.

Results debunk common 'brand safety' myths among key demographic groups for advertisers including Gen Z, affluent American households, moms and more. 

NEW YORK, May 15, 2024 /PRNewswire/ -- Americans are smart enough to know the difference between a news story and an ad, underscoring the current standards used for 'brand safety' are too broad and limit advertisers from engaging with valuable consumer audiences. This is just one of the many insights revealed in a study of 50,000 U.S. adults that Stagwell (NASDAQ: STGW) released today.

Experience the full interactive Multichannel News Release here: https://www.multivu.com/players/English/9266651-stagwell-global-future-of-news-study-advertising/

Recognizing that news is the foundation of a thriving democracy and a critical marketing vehicle, Stagwell is launching a series of 'Future of News' studies and events to fuel discussions on the importance of advertising in news.

Stagwell's inaugural research for the series examines the concept of brand safety—the measures taken to ensure a brand's advertisements don't appear alongside content that could potentially harm that brand's reputation. Because the current approach to brand safety disproportionately hurts the news industry, Stagwell created a study to determine the real impact of ad adjacency.

The groundbreaking survey reveals that ads placed adjacent to news topics such as politics, inflation and crime perform as effectively as those placed next to business, entertainment and sports stories.

"Our research shows brands shouldn't fear advertising on news—but rather relish it.  News junkies, who make up 25% of Americans, are one of the most valuable yet under-tapped marketing audiences," said Mark Penn, Chairman and CEO of  Stagwell. "Instead of feeding the vicious cycle of news demonetization that hurts quality journalism the most, advertisers should kickstart a virtuous cycle of investing in news that allows brands to reach valuable audiences and gives quality news content the financial stability it needs to thrive."

Additional findings include:

• Among Gen Z, the average purchase intent for brands whose ads were placed next to high-quality news articles on the Middle East conflict was 65%, compared to 66% for inflation and 67% for crime—differences that are statistically insignificant. Purchase intent was 69% for sports (widely considered a 'safe' news topic) illustrating a minimal four percentage point difference between the 'riskiest' and 'safest' topics.
• Among more affluent American households, the average favorability ratings for brands whose ads were placed next to high-quality, yet political news articles on former President Trump and President Biden were each 72%—just two percentage points less than brands whose ads were placed next to a non-political entertainment story.
• Among moms, the average purchase intent for brands whose ads were placed next to articles on inflation (a potentially negative story), and business (a more neutral story) were each 70%, showing no difference between the two. Purchase intent was only two percentage points less for brands whose ads were placed next to a news story about crime with the words "subway shooting" in the title—words that get blocked as a matter of course with today's brand safety practices.

"Brand safety considerations have become prevalent in the media and marketing industries, but they require serious scientific evaluation and more rigorous metrics to assess whether brands really face dangers from news adjacency," said Dritan Nesho, CEO of HarrisX, which conducted the study. "Our study shows clearly and repeatedly that ads next to news content that is currently considered 'not brand safe' performs on par with ads next to what is currently considered 'brand safe.'" 

Stagwell is committed to initiating data-driven discussions with advertisers about their investment in news. This topic and more will be discussed at tonight's inaugural Future of News summit which will be held at Stagwell's global headquarters in New York.

Interested parties can request a copy of the research here. For additional questions, please contact hello@stagwellglobal.com. 

Methodology

The Future of News Study was conducted among 49,990 U.S. adults from March 29 to April 19, 2024. HarrisX, a Stagwell company, conducted the quantitative survey-based online interviews. The sampling margin of error is +/-0.44% for the total study.

The survey data was weighted to a nationally representative sample of American adults across key demographics, including age, gender, region, race/ethnicity, education, income. Click here to read the full methodology.

About Stagwell
Stagwell (NASDAQ: STGW) is the challenger network built to transform marketing. We deliver scaled creative performance for the world's most ambitious brands, connecting culture-moving creativity with leading-edge technology to harmonize the art and science of marketing. Led by entrepreneurs, our 13,000+ specialists in 34+ countries are unified under a single purpose: to drive effectiveness and improve business results for their clients. Join us at www.stagwellglobal.com.

About HarrisX
HarrisX is a leading global research consultancy that regularly conducts major market research, public policy polling and social science studies and consulting engagements in more than 40 countries around the world. It is a proud member of Stagwell Global (STGW). Learn more at www.harrisx.com.

Contact:
Kara Gelber
pr@stagwellglobal.com

 

 

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SOURCE Stagwell Inc.

FAQ

What did Stagwell's study reveal about advertising next to news content?

Stagwell's study found that ads placed next to news stories on politics, inflation, and crime perform as effectively as those next to business, entertainment, and sports stories.

How many respondents participated in Stagwell's advertising study?

The study included 50,000 U.S. adults.

What was the purchase intent for brands advertised next to risky news topics among Gen Z?

The purchase intent among Gen Z for ads next to high-quality news articles on the Middle East conflict was 65%, compared to 66% for inflation and 67% for crime.

How did affluent households respond to ads placed next to political news?

For affluent households, favorability ratings were 72% for brands advertised next to high-quality political news about former President Trump and President Biden.

What did the study find about moms' purchase intent for ads next to news stories about inflation and crime?

The study found that moms' purchase intent was 70% for ads next to articles on both inflation and business, with only a two-point drop for ads next to articles about crime.

What is the margin of error for the survey?

The sampling margin of error for the total study is +/- 0.44%.

What is the significance of Stagwell's future events?

Stagwell's 'Future of News' studies and events aim to foster discussions on the importance of advertising in news, potentially influencing industry standards.