“This Post Is Sponsored”: Effects of Sponsorship Disclosure on Persuasion Knowledge and Electronic Word of Mouth in the Context of Facebook

- A 'Sponsored' label helps to recognize Facebook posts by celebrities as advertising.
- The recognition of advertising increases distrusting beliefs about a sponsored post.
- Sponsorship disclosure indirectly decreases intentions to engage in eWOM.

Social media, such as Facebook, offer brands the opportunity to reach their target audience in a less obtrusive way than traditional media, through sponsored posts. Regulations require marketers to explicitly inform consumers about the commercial nature of these posts. This study addresses the effects of sponsorship disclosures by means of a 2 (no disclosure vs. the sponsorship disclosure 'Sponsored') × 2 (source: celebrity endorser vs. brand) experiment. Results suggest that a sponsorship disclosure only influences the use of persuasion knowledge when the post is disseminated by a celebrity. Moreover, a disclosure starts a process in which the recognition of advertising (i.e., the activation of conceptual persuasion knowledge) causes consumers to develop distrusting beliefs about the post (i.e., higher attitudinal persuasion knowledge), and in turn, decreases their intention to engage in electronic word of mouth.