The role of trustworthiness in social media influencer advertising: Investigating users’ appreciation of advertising transparency and its effects

When social media influencers (SMIs) post sponsored content, it should be recognizable as such. However, there is no European Union-wide legislation governing sponsorship transparency, and monitoring practices differ significantly across member states. In Romania, where we conducted our study, such regulations are only just emerging, and there are weak monitoring policies regarding advertising disclosure on SMI branded posts. In this study, we examined how two different types of advertising disclosure commonly used on Instagram are likely to affect consumers’ behavioral outcomes, such as purchase intention and intention toward the SMI, mediated by the activation of conceptual persuasion knowledge (CPK), via negative affect and the trustworthiness of the SMI. We conducted a three-level between-subjects online experiment (N=248), manipulating the absence versus the presence of advertising, which came in one of two types, brand-unspecific (#ad, #sponsoredpost) and brand-specific (paid partnership with [brand]). Considering the mediation path via the trustworthiness of the SMI, findings suggest that the paid partnership disclosure had positive outcomes for purchase intention and intention toward the SMI.

A Path Toward a More Understandable Advertising Disclosure for Children

Children are heavily confronted with advertising messages in their media environments. Given the emotional nature of contemporary advertising and children’s still developing cognitive skills, young consumers are hardly able to cope critically with advertising attempts. So that children are able to detect the persuasive intent, advertising disclosures are viewed as potential supportive measures to mitigate harm that excessive advertising might cause to children. However, the effects of advertising disclosures on children’s awareness of persuasion, i.e., “persuasion knowledge,” appear to be mixed. Moreover, scholars of this research field lack a consensus about what kind of determining factors play important roles in terms of children’s persuasion knowledge activation through disclosures. The present study builds on persuasion knowledge literature and investigates whether the factors identified in this research field can be also transferred to advertising disclosures. The results of a literature review of previous disclosure research show that disclosures might need specific ‘features’ so that advertising disclosures can be effective among children. Furthermore, not all children appear to be equally likely to grasp the meaning of disclosures. However, individual factors other than age might be more important in this context, including environment and situation. Finally, opportunities for future research are discussed.

EXPRESS: Organizational Herding in Advertising Spending Disclosures: Evidence and Mechanisms

As firms use advertising to gain product market advantages and increase their valuation in financial markets, disclosing their advertising spending is influential—whether it erodes organizational competitive advantages in product markets or signals quality in financial markets. The authors argue that firms learn from peers’ decisions to reduce the uncertainty in their own advertising disclosure, and they empirically investigate information-based organizational herding in the context of advertising spending disclosure, where a 1994 reporting rule made advertising spending disclosures voluntary in the United States. The authors examine whether a firm relies on information from benchmark leaders or similar peers to resolve disclosure uncertainty. A novel identification strategy, which uses partially overlapping strategic groups, to mitigate simultaneity and correlated unobservables, shows robust evidence for herding effects among peer firms in the same strategic group. Moreover, firms are more likely to resolve disclosure uncertainty from similar peers rather than from benchmark leaders. The authors discuss how firms can use knowledge of competitors’ predicted advertising disclosure decisions conditional on their disclosure to their strategic advantage in product and financial markets.

How do followers infer the motives behind an influencer's advertising disclosures?

PurposeIn the context of influencer marketing, this study examines the effects of explicit advertising disclosure on consumers' inference regarding influencers' sincere recommendation intent, and its consequences for consumers' purchase intentions.Design/methodology/approachIn Study 1, participants were randomly assigned to the conditions of explicit advertising disclosure (e.g. #AD, #Sponsored) and subtle advertising disclosure (e.g. #ThankYou), and indicated their inference regarding influencers' recommendation motives and their own purchase intentions. One-way ANOVA analysis reveals the effect of advertising disclosure on consumers' purchase intentions and the PROCESS model indicates the mediating role of consumers' inferences regarding influencers' sincere recommendation intent. In Study 2, we implemented a 2 (explicit vs. subtle advertising disclosure) × 2 (moderate vs. large size of followers) between-subjects design, using a two-way ANOVA analysis. We analyzed the moderated mediation effect via the PROCESS model.FindingsConsumers are less inclined to purchase products when influencers express explicit advertising disclosures, compared to when the advertising disclosures are subtle (Study 1). These negative effects of advertising disclosure can be caused by consumers' inferences regarding influencers' sincere recommendation intent in terms of posting content (Studies 1 and 2). Additionally, the negative effect is particularly prominent when an influencer has a large (vs. moderate) number of followers (Study 2).Originality/valueBy examining (1) the effects of explicit advertising disclosure on consumers' inference regarding influencers' persuasion motives and (2) the role of the influencer's number of followers, this research provides both theoretical and practical insights for understanding how best to implement influencer marketing.

Democratic Transparency in the Platform Society

Following an host of major scandals, transparency has emerged in recent years as one of the leading accountability mechanisms through which the companies operating global platforms for user-generated content have attempted to regain the trust of the public, politicians, and regulatory authorities. Ranging from Facebook’s efforts to partner with academics and create a reputable mechanism for third party data access and independent research to the expanded advertising disclosure tools being built for elections around the world, transparency is playing a major role in current governance debates around free expression, social media, and democracy. This article thus seeks to (a) contextualize the recent implementation of transparency as enacted by platform companies with an overview of the ample relevant literature on digital transparency in both theory and practice; (b) consider the potential positive governance impacts of transparency as a form of accountability in the current political moment; and (c) reflect upon the potential shortfalls of transparency that should be considered by legislators, academics, and funding bodies weighing the relative benefits of policy or research dealing with transparency in this area.