Lower Your Expectations: How Source, Claim Explicitness, and Disclosure Specificity Impact MLM Distributor Earnings Estimates

Nathaniel Evans, Bart Wojdynski, and Haoyue Xiang (Ph.D. Student), "Lower Your Expectations: How Source, Claim Explicitness, and Disclosure Specificity Impact MLM Distributor Earnings Estimates”. Accepted for presentation at the 2025 American Academy of Advertising annual conference, Pittsburgh, PA, March.

Abstract: Based on the need to understand how consumers process, evaluate, and respond to (MLM) multilevel marketers’ social media marketing efforts, we investigate how variations in earnings claims (implicit vs. explicit), post source (distributor vs. company), and earnings claim disclosure type (none (control) vs. earnings-only vs. earnings-plus-cost) in a social media post impact consumers’ earnings and cost expectations. Findings indicate that disclosure type had a significant impact on perceptions of earnings, likelihood of earnings, and costs. For those exposed to a disclosure that featured either earnings-only or earnings-plus-cost information their expected earnings and likelihood of earnings was significantly lower compared to those exposed to a post without any disclosure. Policy and theoretical implications are discussed.