Disclosing sponsored Instagram posts: the role of material connection with the brand and message-sidedness when disclosing covert advertising

Regulation prescribes that sponsored social media posts should clearly disclose their material connection with brands. However, research on the impact of such disclosures is limited. This study used an experimental 4 x 2 between-subjects design (N = 414), reflecting different types of material connections between the influencer and the brand and two kinds of message sidedness, to investigate how the sponsorship disclosure affects consumers' responses to sponsored Instagram posts. Findings show that including a sponsorship disclosure (compared to no disclosure) negatively affects brand attitude through enhanced ad recognition, which activates ad skepticism, which, in turn, negatively affects the influencer's credibility. Further, results show a significant moderated mediation effect in that source's credibility and, consequently, brand attitude was only negatively affected when the influencer used a one-sided message and not when the message was two-sided. Also, influencers who post genuine product recommendations and thus have no commercial relationship with the brand, do well by explicitly mentioning this. Iincluding a statement that a post is not sponsored, rather than leaving thisit unclear whether their post is sponsored, may generate more positive brand responses through lowered ad recognition and skepticism.