Damage from Corrective Advertising: Causes and Cures

Abstract

Corrective advertising can be problematic because it undermines responses both to other products advertised by the corrected firm and to products advertised by second-party advertisers. However, a positive reputation insulates second-party firms from these carryover effects, provided that this reputation is based on an endorsement from an independent regulator. Furthermore, firm responses that include an explanation for the misleading claim prove to be effective in avoiding the negative side effects of correction. These findings add to the correction literature by (1) showing that this form of regulation can have much broader side effects than demonstrated previously, (2) identifying distrust as the mechanism by which these effects occur, and (3) suggesting strategies to protect firms from the negative side effects of correction. The findings also support the defensive consumer distrust model and help define the scope of this model.

The effects of disclosure format on native advertising recognition and audience perceptions of legacy and online news publishers

“…An unintended consequence of native advertising is that it may result in lower evaluations of the advertising industry and media institutions as a whole (Armstrong et al, 1982; Darke et al, 2008; but also see Semenik, 1980). Based upon the defensive consumer model, native advertising may produce general distrust toward advertising if consumers feel that they have been misled (Darke et al, 2008).…”

“…An unintended consequence of native advertising is that it may result in lower evaluations of the advertising industry and media institutions as a whole (Armstrong et al, 1982; Darke et al, 2008; but also see Semenik, 1980). Based upon the defensive consumer model, native advertising may produce general distrust toward advertising if consumers feel that they have been misled (Darke et al, 2008). Because consumers who feel deceived by native advertisements may believe that normative foundations of trust between consumers and advertisers have been violated, they may observe additional advertisements defensively, feeling like no one in the industry can be trusted (Darke et al, 2008; Pollay, 1986).…”

“…Based upon the defensive consumer model, native advertising may produce general distrust toward advertising if consumers feel that they have been misled (Darke et al, 2008). Because consumers who feel deceived by native advertisements may believe that normative foundations of trust between consumers and advertisers have been violated, they may observe additional advertisements defensively, feeling like no one in the industry can be trusted (Darke et al, 2008; Pollay, 1986). Likewise, because consumers may also put blame on the publisher for violating their expectations about the separation of editorial and advertising content (Carlson, 2015), they may feel more negatively toward journalism as an industry.…”

Legitimacy of consumer associations and perceived vulnerability of their users: Effects on intentions to trust consumerist associations

“…It is therefore essential that there be no doubt about the objectives these associations pursue, dispelling any suspicion of collusion between manufacturers and associations in the context of comparative tests (Roux et al, 2015). While UFC-Que Choisir is currently developing an initiative called 'La Note' to enable consumers to identify the best-ranked products in its comparative tests, the fact that professionals can obtain the right to use this 'grade' when they pay for a licence 6 could, despite the precautions taken by the association, be a source of confusion in a climate of acute scepticism (Darke et al, 2008).…”

“…Moreover, political, economic and health scandals have led to the widespread belief among consumers that the State is unable to protect their rights (Gabaix et al, 2012). Such a climate of confusion feeds into general feelings of suspicion that damage the trust placed in commercial businesses (Benedicktus et al, 2010;Darke et al, 2008), but also in organizations that work to support legitimate causes (Vestergaard, 2014), including consumer associations.…”