Brands gain or lose trust from consumers based on transparency and type of sponsorship agreement with online reviewers

Sponsored marketing efforts online can create less trust with consumers when consumers do not have clear understanding of the sponsorship terms. That is according to a study co-authored by Alexander Pfeuffer, assistant professor of advertising. The article, “Effects of different sponsorship disclosure message types on consumers’ trust and attitudes,”was published in International Journal of Advertising.

Pfeuffer and his co-author, Jisu Huh (MA ’00, Ph.D ’03) of the University of Minnesota, collected responses from more than 700 American adults when exposed to a variety of different sponsorship disclosures. The study participants watched designed product reviews and were surveyed. Their responses measured the level of consumer trust created based on the review.

Online product reviews are increasingly influenced by compensation from marketers, which causes a higher degree of bias and subjectivity.

“Based on the study insights, brand managers may benefit from offering sponsorship in the form of a free product for review, rather than offering payment for a review or a commission,” Pfeuffer said.

Consumer opinions of brands was higher when the online reviewer revealed they received a free product from the brand as opposed to financial compensation.

Pfeuffer says consumers react differently to varying levels of sponsorship and brands should limit the perception of sponsor-influenced bias from reviewers.

“The kinds of sponsorship deals that signal highly partial product reviews would cause negative impact on consumers’ trust in the product reviewer and attitude toward the sponsoring brand, compared to other kinds of sponsorship arrangements signaling higher impartiality,” said Pfeuffer.

Based on this study, Pfeuffer recommends more detailed sponsorship disclosure guidelines from the United States Federal Trade Commission and other global advertising regulation bodies. Online product reviews are increasingly influenced by compensation from marketers, which causes a higher degree of bias and subjectivity.

“Current guidelines are often vague and differ in their recommendations about the types of sponsorship that should be disclosed and the wording and information that should be included,” Pfeuffer said.

The consumer perception on sponsorships online can help more than marketers and consumers. Pfeuffer says content creators in online mediums can learn from this when negotiating their sponsorship deals. Findings suggest content creators are less likely to experience fractured audience trust if they accept a free product rather than compensation, like payment or commission.

You can read the study in its entirety by visiting this link.

Editor’s note: Jisu Huh was also the recipient of the 2018 Distinguished Alumni Scholar Award.