Consumer Responses to Covert Marketing Communications: A Case of Native Advertising Disclosure in News Contexts

Abstract

This study examines how the language clarity and visual prominence of disclosures about native advertising impact consumer responses to native advertising. Drawing on the persuasion knowledge model’s (PKM) change of meaning principle and the covert advertising recognition and effects (CARE) model, an experiment with 600 U.S. adult internet users shows that (a) use of “advertisement” (vs. “brand voice”) strengthens perceived sponsorship transparency and subsequent advertising evaluations, (b) perceived sponsorship transparency transforms the negative indirect effect of use of “advertisement” (vs. “brand voice”) to positive, and (c) this positive indirect effect is enhanced during high prominence disclosure. In short, if consumers see clear and conspicuous ad disclosure for native advertising, they infer the advertiser’s credibility, but this perception can improve persuasive effectiveness if the advertiser is seen as transparent. The theoretical, managerial, and social implications are discussed.