Deceptive Claims using Fake News Advertising: The Impact on Consumers

56 Pages Posted: 5 Oct 2018 Last revised: 7 Jul 2021

See all articles by Anita Rao

Anita Rao

University of Chicago - Booth School of Business

Date Written: September 12, 2018

Abstract

Fake news advertising, advertising that mimics legitimate news articles, can be harmful if it misleads consumers to take actions they otherwise would not have taken (e.g., purchase an inferior product). However, little is known whether fake news ads bring in new customers or are merely viewed by people already in the market for the advertised products. Exploiting an FTC enabled shutdown of fake news advertisements for various products such as acai cleanses and teeth whiteners but where the product sites continued to remain operational, I identify the extent of consumer interest in the presence and absence of fake news advertising. The findings indicate interest wanes after the shutdown of fake news advertising, but there is some substitution by consumers to other channels such as regular advertisements.

Suggested Citation

Rao, Anita, Deceptive Claims using Fake News Advertising: The Impact on Consumers (September 12, 2018). Available at SSRN: https://ssrn.com/abstract=3248770 or http://dx.doi.org/10.2139/ssrn.3248770

Anita Rao (Contact Author)

University of Chicago - Booth School of Business ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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