Quality Certificates Alleviate Consumer Aversion to Sponsored Search Advertising

40 Pages Posted: 24 Aug 2022

See all articles by Xiang Hui

Xiang Hui

Washington University in St. Louis

Meng Liu

Washington University in St. Louis

Raphael Thomadsen

Olin School - Washington University in St. Louis

Date Written: 2022

Abstract

Building on growing evidence that consumers respond poorly to sponsored search advertising, this paper studies whether incorporating trust signals into ads can alleviate these negative reactions. We leverage a system glitch on a major e-commerce platform that removed the display of a badge representing a quality certificate from all eligible listings, to show that certification leads to a greater increase in sales for sponsored listings than for organic listings. We then corroborate these results using a second field experiment that randomizes the salience of ad display on the same platform. We find that more salient ad disclosure causes a more significant sales reduction in sponsored listings without a quality certificate compared to those with a quality certificate. The results of the experiments offer robust evidence that trust signals can enhance consumer sentiment toward sponsored search advertising.

Keywords: sponsored search advertising, quality certificates, e-commerce

Suggested Citation

Hui, Xiang and Liu, Meng and Thomadsen, Raphael, Quality Certificates Alleviate Consumer Aversion to Sponsored Search Advertising (2022). CESifo Working Paper No. 9886, Available at SSRN: https://ssrn.com/abstract=4196282 or http://dx.doi.org/10.2139/ssrn.4196282

Xiang Hui (Contact Author)

Washington University in St. Louis ( email )

Meng Liu

Washington University in St. Louis ( email )

Raphael Thomadsen

Olin School - Washington University in St. Louis ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

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