Journal of Promotion Management

ISSN: 1049-6491 (Print) 1540-7594 (Online) Journal homepage: https://www.tandfonline.com/loi/wjpm20

Fake Ads: The Influence of Counterfeit Native Ads

on Brands and Consumers

Jamie L. Grigsby

To cite this article: Jamie L. Grigsby (2020): Fake Ads: The Influence of Counterfeit
Native Ads on Brands and Consumers, Journal of Promotion Management, DOI:
10.1080/10496491.2020.1719958

To link to this article: https://doi.org/10.1080/10496491.2020.1719958

Published online: 29 Jan 2020.

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JOURNAL OF PROMOTION MANAGEMENT
https://doi.org/10.1080/10496491.2020.1719958

Fake Ads: The Influence of Counterfeit Native Ads on

Brands and Consumers
Jamie L. Grigsby
College of Business, Missouri State University, Springfield, Missouri, USA

ABSTRACT KEYWORDS
This research explores fake ads: social media posts created by Influencer advertising;
influencers that are designed look like ads but are unpaid. An native advertising;
experiment finds that consumers’ perceptions of fake and real persuasion knowledge;
pushiness; social
ads varies based on their social media experience. Influencers media marketing
may also be seen as pushy, which reduces attitudes toward
the brand featured in the post. Brands should monitor social
media for fake ads featuring their brand so that these posts
can be removed before they damage the brand’s reputation.
This research is limited by its reliance on Facebook ads; social
media platform could influence findings and invites
future research.

Introduction
Native ads, or ads that are designed to blend into the surrounding environ-
ment, are becoming increasingly popular with online advertisers (Campbell
& Grimm, 2019; Wojdynski & Evans, 2016). On social media, native ads
appear within a consumer’s feed and are designed to look like a friend’s
post. Advertisers believe that by blending in to the surroundings, native ads
are seen by consumers as less disruptive to the online experience as com-
pared to online advertising alternatives like pop-up ads (Campbell &
Marks, 2015; Lee, Kim, & Ham, 2016). However, researchers as well as the
FTC have expressed concerns that the persuasive intent of native ads may
not be transparent to consumers (Evans, Phua, Lim, & Jun, 2017; Kim,
2017; Wojdynski, Evans, & Hoy, 2018).
In particular, research has found that consumers often do not easily rec-
ognize native ads, even when they are labeled (Boerman, Van Reijmersdal,
& Neijens, 2014; Kim, Pasadeos, & Barban, 2001). Social media platforms
do typically include a standard disclosure label such as “promoted” or
“sponsored” on paid ads but not all labels are placed where consumers
notice them (Wojdynski, 2016; Wojdynski & Evans, 2016). Influencer
advertising further exacerbates this transparency issue. Influencer

CONTACT Jamie L. Grigsby jgrigsby@missouristate.edu College of Business, Missouri State University,

Springfield, MO, USA.
ß 2020 Taylor & Francis Group, LLC
2 J. L. GRIGSBY

advertising is a type of native advertising in which a social media user

receives compensation in exchange for featuring a brand or product in
their post(s) (Evans et al., 2017). This type of advertising typically employs
the use of influencers, or influential social media users with many followers.
While paid ads on social media will typically automatically be labeled with
the appropriate paid ad disclosure label, since influencer advertising is cre-
ated by a user, a label may or may not be employed (Evans et al., 2017).
Further, the appearance of the label itself can vary widely (Evans et al., 2017;
Wojdynski, 2016; Wojdynski et al., 2018; Wojdynski & Evans, 2016). The
label may appear at any place around the ad and may use varying termin-
ology such as “sponsored”, “paid ad”, or “promoted” (Wojdynski, 2016).
Recent popular press has uncovered another transparency issue: social media
users are creating fake ads; unpaid posts that are designed by the user to
look like influencer advertising in the interest of attracting brands to provide
the user with real, paid, advertising opportunities (Lorenz, 2018; Shamsian,
2019). The idea behind this tactic is that if a social media user looks like
they have already begun to attract brand attention, this may motivate other
brands to recruit them as well (Lorenz, 2018).
Another related issue is that recent controversies related to advertising
and promotion of content on social media, particularly Facebook, has cre-
ated a feeling of distrust among social media users (Grothaus, 2019).
Facebook allowed users’ personal data collected by Cambridge Analytica to
be used, without users’ consent, in targeted political advertising intended to
influence the election in 2016 (Ghosh & Scott, 2018). Facebook has also
been under fire for allowing controversial advertising messages such as
anti-vaccination information (Matsakis, 2019). The misuse of consumers’
data combined with the lack of transparency and credibility in advertising
on social media has created an environment in which consumers experi-
ence skepticism and mistrust, especially toward Facebook. A recent study
found that 60% of consumers surveyed do not trust Facebook and 55%
believe that social media contributes to the spread of false information
(Grothaus, 2019).
These environmental factors present interesting issues that are explored
in this research. How distrusting are consumers of paid and unpaid con-
tent? How do they interpret unlabeled content that may be fake advertis-
ing? In the presence of uncertain and incomplete information, do
consumers simply assume a post has persuasive intent? How do consumers
use advertising cues to detect posts with persuasive intent? And, should
this issue be important to marketers? How are brands impacted by fake
ads, which brands are featured in but did not create?
In exploring these questions, this research contributes to the literature in
several ways. First, in considering fake ads, it explores a novel topic; social
 JOURNAL OF PROMOTION MANAGEMENT 3

media posts that look like, but are not actually, paid ads. Research has
explored how to increase transparency of real ads, but less research has
examined how consumers perceive and interpret content that lacks trans-
parency. The current research is also one of the first to examine the influ-
ence of social media experience on perceptions of paid and unpaid social
media content. In doing so, it integrates the changing social media environ-
ment in which privacy and “fake news” are prevalent issues with native
advertising research to improve the understanding of how consumers’ per-
ceptions of native advertising have been influenced by their years of social
media experience. Finally, the research explores the implications of fake ads
for the brand. It explores the notion that influencers promoting products
(in the form of real or fake ads) may be seen as pushy and have a negative
influence on attitudes toward the brand. This research highlights the
importance of transparency in native advertising, carefully choosing influ-
encers, and monitoring social media for fake ads to maintain control over
how a brand is featured on social media.

Conceptual framework
Native advertising
Native advertising is defined as paid content that is stylistically similar to
the surrounding content in which it is embedded (Wojdynski & Evans,
2016). While native advertising has recently grown in popularity due to its
many uses online and on social media, historically it took the form of
advertorials (Wojdynski, 2016). Advertorials are paid ads in magazines or
newspapers that are designed to look like unpaid editorial content (Attaran,
Notarantonio, & Quigley Jr., 2015). Advertorials are now being used online
(Cambell & Marks, 2015; Wang & Li, 2017) and native advertising as a
paid ad strategy has expanded its influence on social media (Evans et al.,
2017; Kim, 2017), blogs (van Reijmersdal et al., 2016), and other websites
(Jiang, McKay, Richards, & Snyder, 2017).
Research on native advertising tends to explore how the ads should be
designed by advertisers to increase transparency and reduce deceptiveness
(e.g., Wojdynski et al., 2017). Concerns have been raised because not all
native advertising is appropriately labeled (Evans et al., 2017) but also
because research reports that even when a native ad is labeled, consumers
often do not notice and do not recognize the persuasive nature of the con-
tent they viewed (Wojdynski et al., 2017; Wojdynski & Evans, 2016).
Extant research has explored issues related to increasing transparency such
as label placement (Wojdynski & Evans, 2016), label wording (Evans et al.,
2017; Wojdynski & Evans, 2016), label design (Wojdynski, 2016;
Wojdynski et al., 2017) and measuring transparency (Wojdynski et al.,
4 J. L. GRIGSBY

2018) but has focused less on how consumers interpret social media con-
tent that lacks transparency. The current research takes a step toward filling
this knowledge gap.
Research has also focused on advertising that is brand-created, such as
brand posts on social media or advertorials on the New York Times’ online
site (Campbell & Marks, 2015; Kim, 2017; Sweetser, Ahn, Golan, &
Hochman, 2016). However, a significant portion of native advertising is co-
created with the participation of a consumer (Campbell & Grimm, 2019).
For example, if a recipe blogger is recruited to promote a brand in her
next recipe post, she will most likely take on the responsibility of writing
the post and the brand (depending on the terms of the contract) may have
only limited influence on the post’s content. For consumers viewing co-cre-
ated paid ad content, this also blurs the line between native advertising and
word-of-mouth and may make it more difficult for the consumer to recog-
nize the persuasive intent of the content (Campbell & Grimm, 2019). The
use of social media influencers in the co-creation of native advertising has
also created an incentive for other social media users to mimic the native
ad format in their posts (Baxter-Wright, 2018). Recent news media has
reported a relatively new phenomenon; social media users that hope to
attract brand sponsorship opportunities are creating posts that make it
appear as though they already have brand clients for which they are devel-
oping native ads (Shamsian, 2019). In other words, social media users that
want to become influencers are creating fake ads to attract attention from
brands (Lorenz, 2018). This highlights the importance of understanding
how consumers interpret consumer created or co-created content, some-
thing very little research has explored thus far in the context of native
advertising (but see van Reijmersdal et al., 2016 for an exception). The cur-
rent research also addresses this research gap.
The native advertising environment has also been impacted by social
media credibility concerns. Since the 2016 United States presidential elec-
tion, social media has been connected to the spread of “fake news”, or mis-
information in the form of verifiably false stories and advertising (Allcot &
Gentzkow, 2017). Facebook in particular generated controversy through
bias present in its Trending Topics tool (Carlson, 2018), the spread of pro-
Trump misinformation during the 2016 election (Allcot & Gentzkow,
2017), and the spread of anti-vaccination information (Hoffman et al.,
2019). Consumers believe that misinformation can come in the form of
articles and advertising and have developed a feeling of distrust toward
content they see on social media, especially Facebook (Nielsen &
Graves, 2017).
Together, these factors suggest an online advertising world in which
what posts are and aren’t advertising is unclear, trust is low, and skepticism
 JOURNAL OF PROMOTION MANAGEMENT 5

is high, such that consumers must use many cues to determine the persua-
sive intent of the poster. Relying on past native advertising research, the
current research uses a persuasion knowledge framework to explore the
implications of these new fake ads.

Persuasion knowledge
Early research on traditional advertising and sales tactics explored the
extent to which consumers were able to recognize attempts to persuade
them in the context of persuasion knowledge. Persuasion knowledge refers
to a schematic representation developed through experiences that enables
consumers to “recognize, analyze, interpret, evaluate, and remember per-
suasion attempts” (Friestad & Wright, 1994, p. 3). As consumers are
exposed to more persuasion attempts, they learn to recognize the most
commonly used tactics through the “change of meaning principle”
(Williams, Fitzsimons, & Block, 2004, p. 541). When a tactic becomes rec-
ognizable as having persuasive intent, the consumers’ interpretation of and
reaction to the tactic changes and the consumer begins to engage in coping
behaviors designed to handle the persuasive attempt. Coping behaviors
may include counterarguing with the advertising message (van Reijmersdal
et al., 2016), determining the fairness or effectiveness of the advertising tac-
tic (Yagci, Biswas, & Dutta, 2009), perceptions of risks, benefits, or privacy
concerns associated with the advertising (Ham, 2017), or negative affective
responses (van Reijmersdal et al., 2016). For example, researchers have
found that when marketing green products, promotional messages contain-
ing descriptive norm cues can trigger consumers’ perceptions of persuasive
intent. As a result, consumers reported negative attitudes and reduced pur-
chase intentions (Raska, Nichols, & Shaw, 2015).
In native advertising, existing research suggests that disclosure labeling
should be one cue that activates consumers’ perceptions of persuasive
intent. In fact, the very purpose of disclosure labeling is to “ensure that
native ads are identifiable as advertising” (FTC, 2015). When a consumer
sees disclosure labeling to identify paid content, such as “promoted” or
“sponsored”, this should activate the consumer’s persuasion knowledge
schema and they should begin to cope with the persuasion attempt (van
Reijermersdal et al., 2016). While existing research has typically found dis-
appointingly low rates of advertising recognition (such as 8% as reported
by Wojdynski and Evans 2016), this may be a result of a dichotomous
measure of advertising recognition. That is, most research asks participants
a question like “did you see any advertising on the page you viewed?” and
then records the response as yes or no (e.g., Krouwer, Poels, & Paulussen,
2017; Wojdynski et al., 2017; Wojdynski & Evans, 2016). Since the current
6 J. L. GRIGSBY

research is interested in capturing suspicions that a post may be an ad and

have persuasive intent (rather than consumers’ accuracy in identifying real
ads), it uses a continuous measure of consumer perceptions that a post is
likely to be an ad. Further, since the current research is interested in
learned interpretations of native advertising, it relies on an existing social
media format (Facebook) for its stimuli. Given the persuasion knowledge
model framework which argues that consumers learn commonly used
advertising tactics and develop coping mechanisms in response, it is
expected that consumers will be aware of the advertising disclosures used
by Facebook and use that information gained through experience to effect-
ively detect persuasive intent. In other words, consumers viewing a
Facebook post should recognize the disclosure label wording and placement
commonly used by Facebook (“sponsored”, at the top of the post) and
understand that it indicates a paid post with persuasive intent. Therefore,
the following is expected:
H1: The presence of a disclosure label will be positively related to consumer
perceptions that a social media post is an ad.

However, not all content with persuasive intent is properly labeled (Jiang
et al., 2017), and it is likely that consumers have learned this, perhaps by
clicking on a post they thought was not persuasive only to land on a
branded page. With experience, consumers might also realize that they do
not always notice disclosure labels right away. Past research on traditional
advertising indicates that as their persuasion knowledge schema develops,
consumers learn to look for less obvious cues to indicate the persuasive
nature of a message. For example, the presence of rhetorical questions in a
message can increase consumers’ perceptions of persuasive intent
(McQuarrie & Mick, 1996; Wentzel, Tomczak, & Herrmann, 2010). The
presence of negative comparisons with competitors (Jain & Posavac, 2004)
or biased endorsers (Kirmani & Zhu, 2007) can also indicate to consumers
that a message has persuasive intentions. The fact that consumers are sensi-
tive to some advertising tactics suggests that consumers are on the lookout
for cues in a post that indicate the post may have persuasive intent. The
most obvious cue that a social media user might use in a fake ad, especially
if they are trying to attract real advertising opportunities, is a brand name.
An influencer advertising post would include a brand name if the intention
was to promote a brand, so an influencer trying to show other brands that
they are capable of attracting and creating influencer advertising is also
likely to include a brand name (Ritschel, 2018). Past research in an adver-
torial context also supports the notion that consumers will be sensitive to
the presence or mention of a brand name (Krouwer et al., 2017).
Therefore, the following is predicted:
 JOURNAL OF PROMOTION MANAGEMENT 7

H2: The presence of a brand name will be positively related to consumer perceptions
that a social media post is an ad.

However, at the foundation of persuasion knowledge literature is the

idea that the skills and knowledge necessary to understand persuasive
attempts are learned and develop over time (Friestad & Wright, 1994). For
example, teaching advertising literacy in school significantly developed
children’s persuasion knowledge schemas and improved their ability to
understand persuasive messages (Nelson, 2016). In adults, providing infor-
mation to educate consumers on the marketing uses of video news releases
(VNRs) significantly influenced consumers’ perception and interpretation
of VNRs (Nelson & Park, 2015). Research has also found that understand-
ing advertising on social media requires new persuasion knowledge; that is,
interpreting native ads requires a new set of skills that may not be acquired
through experience with traditional advertising media (Lawlor, Dunne, &
Rowley, 2016). This suggests that adult consumers’ persuasion knowledge
for native advertising will vary based on the experience the consumer has
with native advertising. As a consumer’s social media experience increases,
their persuasion knowledge schema should develop because they will have
an increasing number of native advertising encounters from which to learn.
Since advertising is not always clearly labeled (Evans et al., 2017), consum-
ers regularly do not notice labeling (Attaran et al., 2015; Evans et al., 2017;
Kim, Lee, & Chung, 2017; Wojdynski & Evans, 2016), and social media
users are creating fake ads (Lorenz, 2018; Shamsian, 2019), it is expected
that social media consumers with a lot of social media experience will have
learned to be very suspicious of content that they do not recognize (i.e.,
content from someone who is not a friend). Essentially, these high-experi-
ence consumers will assume unfamiliar social media content is an ad unless
proven otherwise. Without the social media experience, consumers should
not be so highly suspicious. That is, consumers with relatively low levels of
social media experience should be less likely to assume everything is ad.
H3: Social media experience will be positively related to consumer perceptions that a
social media post is an ad.

It is predicted that consumers will be influenced by disclosure labels and

brand names on posts in different ways, depending on how much social
media experience they have. When a disclosure label is absent, it is
expected that those with high levels of social media experience will be auto-
matically suspicious. These consumers will have the experience to know
that if a post from an unfamiliar user (not one of their friends they follow)
appears in their stream, it is likely to be an ad. Therefore, additional cues
such as the presence of a brand name should not significantly influence
perceptions that the post is an ad for consumers with high levels of
8 J. L. GRIGSBY

experience. The consumer has already activated their persuasion knowledge

schema and is already interpreting the ad with skepticism. For consumers
with less social media experience, however, cues will be needed to activate
their persuasion knowledge schema. This is because consumers with less
social media experience have not yet learned to associate unfamiliar posts
with advertising. However, past research suggests that the presence of a
brand name is something consumers associate with traditional advertising
(Krouwer et al., 2017). It is expected that while consumers with low levels of
social media experience will not have a well-developed persuasion knowledge
schema for social media advertising, they will have a well-developed schema
for traditional advertising which will include knowledge of the brand name
cue. Therefore, it is predicted that for consumers with relatively low social
media experience, the presence of a brand name in a social media post will
significantly increase their perceptions that the post is an ad.
H4a: A three-way interaction is predicted such that when a disclosure label is absent,
brand name presence and social media experience will interact to influence perceived
likelihood that a social media post is an ad. For consumers with relatively low levels
of social media experience, it is expected that perceived likelihood that the social
media post is an ad will be significantly greater when a brand name is present
compared to when a brand name is absent. No difference depending on brand name
presence is expected for high experience social media consumers.

When a disclosure label is present, it is expected that consumers with

high levels of social media experience will notice the label. A relatively high
perception that the post is an ad is expected, since these consumers should
have experience looking for and recognizing the disclosure label. Unlike
when no label is present and high experience consumers are suspicious but
perhaps not certain, when a label is present, the presence of a brand name
should confirm and increase their confidence and certainty that the post is
an ad. In other words, it is expected that there will be a significant and
positive relationship between brand name presence and perceptions that
the social media post is an ad when the consumers has relatively high levels
of social media experience.
Consumers with low levels of experience are not expected to experience
the feelings of confidence and certainty. This is because research suggests
that consumers often do not understand the labels and interpret them in
different ways (Wojdynski et al., 2017; Wojdynski & Evans, 2016). Further,
these consumers should be less likely to notice the label at all, since they
do not have the experience or practice necessary to know to look for a
label. Given the likelihood of different interpretations of the label and the
likelihood that many of the low-experience consumers will not notice the
label, the brand name may not be interpreted with high levels of skepticism
as it would be with the unlabeled ad. Therefore,
 JOURNAL OF PROMOTION MANAGEMENT 9

H4b: A three-way interaction is predicted such that when a disclosure label is

present, brand name presence and social media experience will interact to influence
perceived likelihood that a social media post is an ad. When a brand name is
present, those with higher levels of social media experience will report greater levels
of perceived likelihood that the social media post is an ad compared to when a
brand name is absent. For those consumers with low levels of social media
experience, no significant differences are predicted based on the presence or absence
of the brand name.

Consumers’ perceptions of influencers

There has been very little research on consumers’ perceptions of influ-
encers, however, there is a good understanding of how persuasion know-
ledge influences the perceptions of other brand representatives, such as
salespeople. Research suggests that over time and with experience, consum-
ers develop a “schemers’ schema” (Wright, 1986, p. 1). That is, consumers
may develop a schema that includes negative stereotypes for salespeople,
particularly car and insurance salespeople (Babin, Boles, & Darden, 1995;
Stafford, Leigh, & Martin, 1995). The accessibility of this schema depends
on how frequently it is activated and used; stereotypical schemas are those
that are accessed very frequently (Stafford et al., 1995). Therefore, it is
likely that an experienced social media consumer will develop a stereotyp-
ical schema of influencers.
The negative salesperson schema includes perceptions that the salespeo-
ple will be loud, pushy, direct, and product oriented (Babin et al., 1995).
Consumers also report having a generally negative opinion of marketing in
general and perceive advertising to be intentionally manipulative and com-
pany-focused (Heath & Chatzidakis, 2012). It is therefore expected that
experienced social media consumers will have a similar schema for social
media influencers. As mentioned previously, experienced social media con-
sumers should have learned to watch out for disclosure labels and other
cues that indicate the advertising nature of the post. Given the fact that dis-
closure labels are not used consistently especially by influencers (Evans
et al., 2017), experienced social media consumers are likely to have negative
opinions within their influencer schema and think that influencers are
regularly manipulative, dishonest, and pushy. Pushiness is defined as a
salesperson being overly aggressive, profit-motivated, and attempting to
take advantage of consumers (Babin et al., 1995; Guo & Main, 2012).
Given the deceptive nature of social media influencers’ native advertising
activity and perceptions that social media influencers are manipulative or
not truthful (Evans et al., 2017), it seems likely that consumers will come
to see social media influencers as being pushy. Pushiness is associated with
negative consumer affective responses (Babin et al., 1995). Consumers
respond to pushy salespeople with suspicion (Main, Dhal, & Darke, 2007)
10 J. L. GRIGSBY

Figure 1. Hypothesized relationships.

and defensiveness (Darke & Ritchie, 2007). The negative experience of feel-
ing pushed is likely to have a negative relationship with consumers’ atti-
tudes toward the social media influencers’ post. Put formally:
H5: Perceived likelihood that a social media post is an ad will negatively influence
attitudes toward the post through perceptions that the poster is pushy.

The relationship between advertisement attitudes and brand attitudes is

well-established (MacKenzie & Lutz, 1989; Muehling & McCann, 1993) and
research indicates this relationship holds for native advertising as well (An,
Kerr, & Jin, 2018; Stewart, Kammer-Kerwick, Koh, & Cunningham, 2018).
Fewer researchers have explored the relationship between post attitudes
and brand attitudes in an influencer context but suggest it should hold as
well (Evans et al., 2017; Tanyel, Stuart, & Griffin, 2013). Therefore:
H6: Serial mediation is predicted such that perceived likelihood that a social media
post is an ad will negatively influence attitudes toward the brand featured in the ad
through perceptions that the poster is pushy and attitudes toward the post,
respectively.

All hypothesized relationships are presented as a complete model in

Figure 1. To summarize, disclosure label presence, brand name presence,
and social media experience are all expected to positively influence con-
sumers’ perceptions that a post is an ad. These factors are predicted to
interact such that when the disclosure label is absent (a fake ad), consumers
with low levels of social media experience will experience the greatest level
of perceived likelihood that the post is an ad when a brand name is pre-
sent. Consumers with high levels of social media experience are not
expected to be sensitive to the presence of a brand name. When the dis-
closure label is present (a real ad), consumers with high levels of social
media experience will experience the greatest level of perceived likelihood
that the post is an ad when brand name is present. Perceived likelihood
that a post is an ad is important because it should be positively related to
consumers’ perceptions that the person that posted the content is being
pushy. Pushiness is expected to negatively influence consumers’ attitudes
 JOURNAL OF PROMOTION MANAGEMENT 11

toward the post as well as attitude toward the brand. A study exploring
these relationships follows.

Main study
The purpose of this study is to explore the hypothesized relationships
between disclosure label, brand name presence, and social media experience
on perceptions that a social media post is an ad, perceptions that the poster
is pushy, attitudes toward the ad, and attitudes toward the brand featured
in the post.

Method
The study employed a 2 x 2 experimental design. The two independent var-
iables were the disclosure label (which was either present or absent) and
the brand name (which was either present or absent) on the stimulus.
Social media experience was a measured variable, based on the number of
years the participant had used Facebook. The dependent variables were per-
ceived likelihood that the post viewed was an ad, perceived pushiness of
the poster, attitude toward the ad, and attitude toward the brand.

Stimuli
Four social media posts were developed to manipulate the elements that
were needed to test the hypotheses. These ads are included in the
Appendix and were designed using Facebook’s own native advertising for-
mat and styling at the time this study was designed. Facebook was chosen
because it is the most popular social media network (Lua, 2019) and was
expected to provide enough variance on the social media experience vari-
able. The stimuli design included two manipulated factors, the advertising
cues of interest: disclosure label (absent or present) and brand name
(absent or present). For the disclosure label present condition, the ad
included the word “Sponsored” next to the name of the individual that
posted the content. This is the ad design that Facebook employs to indicate
a paid post. For the disclosure label absent condition, the word sponsored
was not included. This manipulation allows for the comparison of real and
fake ads such that the disclosure label present condition depicts a real ad
while the disclosure label absent condition depicts a fake ad. The inclusion
of the brand name was manipulated by either including or not including
the brand name “Express” in the caption of the post. This factor allows for
the examination of the influence of brand name presence as a cue to acti-
vate persuasion knowledge.
12 J. L. GRIGSBY

Procedure
Participants were 151 (average age ¼ 35; 57.6% male) Amazon Mechanical
Turk workers. Amazon’s Mechanical Turk is a recruitment platform com-
monly employed by academic researchers (Kees, Berry, Burton, & Sheehan,
2017). To recruit participants for this study, a job was posted to the
Amazon Mechanical Turk website which explained the topic of study, dur-
ation of the study (about 10 minutes to complete a survey via the Qualtrics
survey platform), and compensation for completing the study. Any person
with an Amazon Mechanical Turk worker account was allowed to partici-
pate until the sample size quota was reached. After expressing interest in
completing the study, workers were taken to the Qualtrics site to view the
informed consent. After reading the informed consent and agreeing to par-
ticipate in the study, participants were randomly assigned to one of the
four conditions and viewed the corresponding social media post. Then,
participants completed the measure of interest. Participants first responded
to a measure of pushiness of the poster (Guo & Main, 2012; Williams
et al., 2004). This is a 7-point semantic differential bipolar scale with the
following items: not pushy/pushy, not at all self-interested/self-interested,
did not have a direct profit motive/had a direct profit motive, not at all
objective, very objective (reverse coded), not fake/fake, honest/dishonest,
not phony/phony, untrustworthy/trustworthy (reverse coded), and not
manipulative/manipulative (a ¼ .85). They also rated the likelihood that
the post they saw was advertising using a slider scale from 0 to 100%.
Participants then provided an attitude for the post using a 7-point scale
(Biehal, Stephens, & Curlo, 1992) with the following items: bad/good,
dislike/like, boring/interesting, uncreative/creative, and uninformative/
informative (a ¼ .95). Attitude toward the brand was also captured using a
7-point scale (Lohse & Rosen, 2001): bad/good, unpleasant/pleasant,
unfavorable/favorable, negative/positive, not reputable/reputable, and dislike
this brand a lot/like this brand a lot (a ¼ .95). Finally, gender and age
were captured as well as how long the participant had been using Facebook
(in number of years) to measure social media experience.

Results
Hypotheses 1, 2, 3, 4a, and 4 b were tested simultaneously via Process
model 3 (Hayes, 2018) including a three-way interaction between disclosure
label presence, brand name presence, and social media experience. The
three-way interaction results are presented in Table 1. Table 2 presents the
mean perceived likelihood that the post was an ad for each of the condi-
tions. The full model was significant (F(7, 143) ¼ 4.44; p < .001).
Hypothesis 1 was not supported; there was not a significant main effect of
 JOURNAL OF PROMOTION MANAGEMENT 13

Table 1. Three-way interaction results.

Variable b (se)
Intercept 55.27(8.61)
Disclosure label presence (A) 15.67 (12.25)
Brand name presence (B) 30.31(12.24)
Social media experience (C) 3.11(.91)
AxB 56.03(18.32)
AxC 1.52 (1.29)
BxC 3.13(1.28)
AxBxC 5.79(1.90)
Note: Unstandardized coefficients (b) and standard errors (se) are reported.
N ¼ 151. p < .05, p < .01, p < .001.

Table 2. Mean perceived likelihood that the social media post is an ad.
Disclosure label absent Disclosure label present
Brand name Brand name Brand name Brand name
Social media experience absent present absent present
Low (-1 SD) 74.68 85.45 80.90 71.75
Moderate 83.78 85.39 85.57 84.19
High (þ1 SD) 92.63 85.34 90.11 96.28

disclosure label on perceptions that the social media post was an ad

(b ¼ 15.67; p > .05). However, hypotheses 2 and 3 were supported; there
were significant positive relationships between the presence of a brand
name (b ¼ 30.31; p < .05) and social media experience (b ¼ 3.11; p < .001)
on the perception that the social media post was an ad. While not formally
predicted, there was also a significant two-way interaction between disclos-
ure label presence and brand name presence (b ¼ -56.03; p < .01) as well
as between brand name presence and social media experience (b ¼ -3.13; p
< .05).
As expected and described in hypotheses 4a and 4 b, there was also a sig-
nificant three-way interaction between disclosure label presence, brand
name presence, and social media experience (b ¼ 5.79; p < .01). These rela-
tionships are graphed in Figures 2 and 3. Continuous years of social media
experience (SME) are graphed at þ1 (high SME) and -1 (low SME) stand-
ard deviations around the mean (moderate SME). Figure 2 depicts the rela-
tionship between brand name presence and social media experience when
the social media post was not labeled as an ad. H4a was supported; when
the disclosure label was absent, there was a significant interaction between
brand name presence and social media experience on perceived likelihood
that the post was an ad (b ¼ -3.13; p < .05). When social media experience
was moderate (b ¼ 1.90) and high (b ¼ -7.29), there was no significant dif-
ference in perceived likelihood that the post was an ad regardless of brand
name presence (both slopes have p-values greater than .05). As predicted in
H4a, when social media experience was low, consumers had a significantly
greater perceived likelihood that the post was an ad when a brand name
14 J. L. GRIGSBY

Disclosure Label Absent

100
90
Likelihood Post is an Ad 80
70
60
50 SME Low
40 SME Moderate
30 SME High
20
10
0
Absent Present
Brand

Figure 2. The interaction between brand name presence and social media experience when an
advertising disclosure label is absent on consumers’ perceived likelihood that the post is an ad.

Disclosure Label Present

100
90
Likelihood Post is an Ad

80
70
60
50 SME Low
40 SME Moderate
30 SME High
20
10
0
Absent Present
Brand

Figure 3. The interaction between brand name presence and social media experience when an
advertising disclosure label is present on consumers’ perceived likelihood that the post is
an ad.

was present (b ¼ 11.41; p < .05). When the brand name was featured in
the ad, there was no difference in perceptions that the post was an ad
regardless of social media experience (p > .05). However, when the brand
name was not featured, there was a significant relationship between percep-
tions the post was an ad and social media experience (b ¼ 1.92; p < .05).
Figure 3 depicts the relationship between brand name presence and
social media experience when the social media post was labeled as an ad.
 JOURNAL OF PROMOTION MANAGEMENT 15

Figure 4. Path coefficients of serial mediation relationships predicted in Hypothesis 6.

H4b was partially supported. When the disclosure label was present, the
interaction between brand name presence and social media experience
approaches significance (b ¼ 2.66; p ¼ .07). The slopes were not significant
(p > .05), so the prediction that perceived likelihood that the post was an
ad would be significantly greater when a brand name was present for those
with higher levels of social media experience was not supported. The pres-
ence of a brand name does not appear to significantly increase social media
consumers’ perception that a post was an ad, regardless of level of social
media experience. This provides partial support for H4b, which predicted
that when social media experience was low, no relationship between brand
name presence and perceived likelihood that the post was an ad would
appear. When the brand name was absent, there was no significant rela-
tionship between social media experience and perceived likelihood that the
post was an ad (b ¼ 1.60; p > .05). However, when the brand name was
present, there was a significant difference between social media experience
and perceived likelihood that the post was an ad (b ¼ 4.26; p < .001).
Hypothesis 5, the prediction that disclosure label presence, brand name
presence, and social media experience interact to influence perceptions of
pushiness through the perception that the post was an ad, was also sup-
ported (b ¼ .17; SE ¼ .07; 95% CI: .04 to .32). While Process is unable to
simultaneously test the full model from Figure 1, the portion of the model
following the three-way interaction can be tested. This serial mediation
model, as described in hypothesis 6, was also supported (b ¼ -.01; SE ¼
.003; 95% CI: -.02 to -.01). The individual path coefficients and their sig-
nificance for this model are reported in Figure 4.

Discussion
The study finds partial support for the hypothesized relationships.
Hypothesis 1 was not supported; the main effect of disclosure label pres-
ence on consumer perceptions that a social media post is an ad was not
significant. This is congruent with past research findings that indicate con-
sumers often fail to see or understand the disclosure label (Boerman et al.,
16 J. L. GRIGSBY

2014; Wojdynski & Evans, 2016). However, the relatively high means
(shown in Table 2) indicate that most consumers are relatively suspicious
of social media posts made by an unfamiliar person even when they are
not labeled as advertising. This supports the notion that the spread of “fake
news”, the spread of misinformation via advertising, and the resulting
decline of Facebook’s credibility have increased consumers’ skepticism and
mistrust of content on social media.
Hypotheses 2 and 3 were supported. The presence of a brand name cue
was positively related to consumers’ perceptions that the post was an ad.
Combined with the lack of support for hypothesis 1, this suggests that con-
sumers are using cues other than the disclosure label to uncover persuasive
intent. This may be because advertisements are often labeled inconsistently,
in different locations and using different terms; consumers may find labels
to be an unreliable source of advertising information. Similarly, as pre-
dicted in hypothesis 3, as consumers gain experience, they are also more
likely to believe that a social media post is an ad. This finding corroborates
the notion that experienced social media users in particular have learned to
become mistrusting of social media content.
Hypothesis 4a was also supported. This hypothesis pertained to fake ads,
that is, those posts that do not have a disclosure label. As predicted, con-
sumers with relatively low levels of social media experience reported greater
levels of perceived likelihood that the social media post was an ad when a
brand name was present. This supports the persuasion knowledge explan-
ation because these consumers seem to be able to use their persuasion
knowledge schema developed through exposure to traditional advertising in
the social media environment. However, they are not as automatically sus-
picious of social media posts as those consumers with high levels of social
media experience.
Hypothesis 4 b was partially supported. This hypothesis was related to
real, paid ads; those that do have a disclosure label. It predicted that the
slope for high social media experience consumers would be significant, and
while consumers with high levels of social media experience do report
greater perceived likelihood that the post is an ad when a brand name is
present, the slope is not significant. The slope for consumers with low lev-
els of social media experience is also flat, providing partial support for
H4b. There is a significant relationship, however, between social media
experience and perceived likelihood that the post was an ad, further provid-
ing support for H3. In other words, consumers with high levels of social
media experience are better at identifying real ads compared to those con-
sumers with lower levels of social media experience.
Hypotheses 5 and 6 were also supported; perceived likelihood that a
social media post was an ad was positively related to perceptions that the
 JOURNAL OF PROMOTION MANAGEMENT 17

poster was pushy, which negatively influences attitudes toward the post.
Since attitudes toward the post are related to attitudes toward the brand,
perceptions of pushiness also have a negative downstream influence on atti-
tudes toward the brand.

Conclusions
Limitations of the study
This research is limited in its ability to fully simulate the social media
browsing experience. The study design involved participants viewing a sin-
gle social media post, but real social media browsing usually involves view-
ing paid posts as well as posts made by friends or groups the consumer
follows. The context in which the native ad appears may influence the
extent to which consumers notice the ad or how they interpret the ad mes-
sage. Future research could explore this possibility. Further, the study relied
on Facebook for its post design and social media experience measure; it is
possible that other social media platforms would cause posts and ads to be
perceived differently. Similarly, experience on different social media plat-
forms or experience with multiple platforms may influence the persuasion
knowledge schema the consumer possesses. This research does not explore
this possibility, but it could be an area for future research. Despite its limi-
tations, this study does have a number of implications for both researchers
and managers.

Contributions to literature
This research explores a new issue – the notion that consumers are moti-
vated to develop social media posts that look like ads but are actually “fake
ads”. It argues that fake ads, in conjunction with a lack of transparency in
advertising on social media and the spread of misinformation on social
media, have created an environment in which consumers suspect persuasive
intent for most unfamiliar content. Results indicate that consumers with
relatively high levels of social media experience have learned to approach
new social media posts with a high level of distrust; they are more likely
than consumers with less experience to suspect that an unlabeled post is an
ad. The implication for researchers exploring perceptions of native advertis-
ing and the extent to which a consumer is able to detect native advertising
is that including a measure of the participants’ experience with the context
(whether it is advertorials, blogs, influencer advertising, or a particular
social media platform) is necessary in order to fully understand how con-
sumers are interpreting the ad. While some research has measured partici-
pants’ familiarity with native advertising in general (e.g., Wojdynski et al.,
18 J. L. GRIGSBY

2017), no research has explored the influence of social media experience on

native advertising perceptions.
This research also explores consumers’ awareness and recognition of
native ads in a new way. The focus of researchers thus far has been on
increasing the transparency and consumer recognition rates of legitimate
ads. The current research is the first to compare perceptions of legitimate
ads to unpaid content (fake ads). Based on the relatively high perceived
likelihood that the posts the participants viewed were ads (regardless of dis-
closure label, all percentages were above 70%), it seems that consumers
have learned to be skeptical of most unfamiliar social media content. This
makes sense, given the increased spending on native ads (Campbell &
Grimm, 2019) as well as consumer concerns that online advertising is often
done unethically (Arora & Sanni, 2019; Tanyel et al., 2013), particularly on
Facebook (Grothaus, 2019). For researchers, the implication is that the con-
cern that consumers are not noticing disclosure labels and are being
manipulated by native advertising may be overexaggerated; from the results
presented in the current research, it seems that even if consumers are not
noticing disclosure labels, they are still approaching unfamiliar social media
posts with a healthy amount of skepticism. The results also suggest that
both experienced and unexperienced social media users are using cues like
the presence of a brand name to inform their interpretation of posts. This
suggests that a disclosure label may be insufficient to improve advertising
identification; the inclusion of branding information such as a brand name,
symbol, or logo may increase transparency.

Managerial implications
For social networking service managers, these findings suggest that to
address the concern that consumers do not notice native ads that are
labeled, it may be useful to provide a new-user tutorial. For example, when
a user signs up for a social media platform, part of the on-boarding process
could be to show the user how to identify native ads on the platform.
Common advertising cues that new users have not yet learned to recognize
(such as the presence of a brand name) could also be covered. This could
help the consumers’ persuasion knowledge model for the platform develop
more quickly, increasing consumers’ ability to notice native ads on
the platform.
This research also provides implications for social media influencers and
consumers that are trying to develop personal brands on social media.
While it may be prestigious and income-generating to attract brand spon-
sors, the strategy of creating fake ads does not seem to be beneficial. Fake
ads can increase the perception that the social media influencer is pushy
 JOURNAL OF PROMOTION MANAGEMENT 19

which can have a negative influence on how well followers like the post.
This is likely to have a negative impact on the influencer’s ability to recruit
and retain followers, which is likely to have a negative impact on the
attractiveness of the influencer from the perspective of brands.
This research also has implications for brand managers. When a brand is
featured in a fake ad made by an influencer, attitudes toward the brand are
reduced. This suggests that brands should carefully monitor social media
for mentions of their brand name in unpaid posts and take steps to remove
unpaid brand-related posts, particularly when the social media influencer
seems aggressive or pushy. Social media platforms may also want to take
steps to monitor for and remove fake advertising to increase transparency
and credibility in their advertising.

ORCID
Jamie L. Grigsby http://orcid.org/0000-0003-0570-1837

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Appendix. Stimuli used in study

Disclosure label absent; brand name absent

Disclosure label present; brand name absent

24 J. L. GRIGSBY

Disclosure label absent; brand name present

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