How does the timing of consumer source disclosure of co-created advertisements affect viewers’ advertisement and brand evaluation?

(1)

MASTER THESIS

“How does the timing of consumer source disclosure of co-created advertisements affect viewers’ advertisement and brand evaluation?”

University of Amsterdam Faculty of Economics and Business Master of Science in Business Administration

Track Marketing 2015/2016

Under supervision of: Dr. Marcel Weber

By: Julia Heinze

11086068

(2)

(3)

2

STATEMENT OF ORIGINALITY

This document is written by Julia Heinze who declares to take full responsibility for the contents

of this document.

I declare that the text and the work presented in this document are original and that no sources

other than those mentioned in the text and its references have been used in creating it.

The Faculty of Economics and Business is responsible solely for the supervision of completion of

the work, not for the contents.

Julia Heinze

(4)

3

ACKNOWLEDGEMENTS

I would like to thank several people for their guidance and support during the process of writing

this thesis. First of all, I would like to thank Dr. Marcel Weber for his motivation and guidance

during the last months. Furthermore, I am highly acknowledging my mother for her mental

support especially at the beginning of this process. Finally, I am thanking every single person that

participated in my research. Thanks to all their help and support I am now proudly holding this

document in my hands.

(5)

4

INDEX OF TABLES AND FIGURES

Table 1: Number of respondents per consumer source disclosure x ad replicate condition ... 90

Table 2: Factor loadings after rotation of ad and brand evaluation scales ... 90

Table 3: Means of ad and brand evaluation items for control and disclosure condition ... 90

Table 4: Means of ad and brand evaluation items for control and disclosure condition for ‘When pigs fly’ ad ... 91

Table 5: Means of ad and brand evaluation items for control and disclosure condition for ‘Middle Seat’ ad ... 92

Table 6: Means of ad evaluation items for each timing of disclosure condition and Turkey post-hoc test ... 93

Table 7: Means of ad and brand evaluation items for ‘When pigs fly’ ad and ‘Middle Seat’ ad ... 94

Figure 1: Means of factor ad evaluation for control and disclosure condition ... 46

Figure 2: Means of factor brand evaluation for control and disclosure condition ... 46

Figure 3: Means of factor ad evaluation for control and disclosure condition for ‘When pigs fly’ ad ... 91

Figure 4: Means of factor brand evaluation for control and disclosure condition for ‘When pigs fly’ ad ... 91

Figure 5: Means of factor ad evaluation for control and disclosure condition for ‘Middle Seat’ ad. ... 92

Figure 6: Means of factor brand evaluation for control and disclosure condition for ‘Middle Seat’ ad ... 92

Figure 7: Means of factor ad evaluation per timing of disclosure condition ... 48

Figure 8: Means of factor brand evaluation per timing of disclosure condition ... 48

Figure 9: Means of factor ad evaluation per timing of disclosure condition for ‘When pigs fly’ ad ... 93

Figure 10: Means of factor brand evaluation per timing of disclosure condition for ‘When pigs fly’ ad ... 93

Figure 11: Means of factor ad evaluation per timing of disclosure condition for ‘Middle Seat’ ad ... 93

Figure 12: Means of factor brand evaluation per timing of disclosure condition for ‘Middle Seat’ ad ... 93

Figure 13: Means of factor ad evaluation for ‘When pigs fly’ ad and ‘Middle Seat’ ad ... 51

Figure 14: Means of factor brand evaluation for ‘When pigs fly’ ad and ‘Middle Seat’ ad ... 51

Figure 15: Means of factor ad evaluation per timing of consumer source disclosure x ad replicate condition ... 53

Figure 16: Means of factor brand evaluation per timing of consumer source disclosure x ad replicate cond. ... 53

Figure 17: Means plot depicting the interaction of timing of consumer source disclosure with ad replicate... 53

(7)

6

ABSTRACT

In business, the new millennium marked a “paradigm shift from value creation for to value

creation with customers” (Mahr et al., 2014, p.601). Companies realized that the integration of

the customer as source of innovation enables to achieve unique competitive advantages along the

value chain. A growing trend is the co-creation of advertisements, also referred to as

consumer-generated advertising (CGA). Even though the phenomenon started with consumers initiatively

engaging in the creation and dissemination of brand related video content, firms soon recognized

the value of actively soliciting consumer-generated ads. As this, however, refers to consumer

ad-creators in the first place, research was interested how CGA is perceived by customers not

involved in ad-creation. As prior studies yielded opposing results, thereby suggesting a

moderating role of the ad itself, the present study replicated the analysis of the effect of consumer

source disclosure on viewers’ ad and brand evaluation using two different ads. Additionally, it

responds to a pronounced research claim by examining whether and how the differential timing

of consumer source disclosure is influential. Based on an online quasi-experiment with 191

international respondents, it could be revealed that consumer source disclosure increases ad

evaluation in a significant, and brand evaluation in a not significant way. A regards the timing;

disclosure prior versus post exposure has a meaningful but not statistically significant effect.

Disclosure post exposure consistently yields higher ad evaluation. However, the ad itself

influences effect strength. Further, depending on the ad in question, disclosure post exposure has

a positive or negative impact on brand evaluation. The study concludes with a discussion of

theoretical and managerial implications, as well as suggestions for future research.

Keywords: Co-creation, Co-Created Advertising, Consumer-Generated Advertising, CGA,

(8)

7

INTRODUCTION

The way companies compete in the marketplace is in evolution. Whereas conventional models of

value creation had a company- and product centric view, and clearly differentiated between

production and consumption; contemporary models are more customer-centric, and production

and consumption move closer together. There is a “paradigm shift from value creation for to

value creation with customers” (Mahr et al., 2014, p.601). In order to be able to accurately respond to customers’ ever more complex and fast changing needs, and to grow, survive and

diversify in the dynamic global market, companies are opening up their value creation processes.

The customer is no longer seen as a passive agent but an active partner, a source of innovation

and competence with who firms interact to co-create value. To a large extent, this is enabled and

realized by making use of new technologies and virtual collaboration concepts. Customers are

asked to contribute creativity, ideas and knowledge, as well as skills, effort and resources. In

using these external capabilities is where unique and sustainable competitive advantage resides.

One growing trend in business practice is the co-creation of advertisements, also referred to as

consumer-generated ads. Brands increasingly address consumers asking them either to develop

advertisement concepts which will then be realized by an ad agency; or even to submit produced

ads ready for broadcasting. The American chips producer Frito-Lay Doritos is considered a peer

in the use and leverage of co-created advertising. By involving the consumer in ad-development,

companies not only gain valuable insights, but can also respond to the need of collaboration and

engagement building with them. While this, however, applies to those consumers participating in

the creation advertisements in the first place, studies were also interested in the effect of

co-created ads on customers not involved in the ad-creation process. Since winner ads, in most

(9)

8

companies’ self-generated communication, this is important to know. Past studies already probed

into this direction, but yielded opposing results. Whereas the study by Lawrence et al. (2010)

revealed that ads labeled as co-created enhance viewers’ advertisement and brand evaluation;

Thompson and Malaviya (2013) found that consumer source disclosure decreases evaluation.

However, in both studies, the samples were informed about the ad being co-created prior to

exposure. Thompson and Malaviya (2013, p.46) claimed that “the timing of viewers’ learning about the consumer source (before or after ad exposure) deserves further investigation”. As an

experiment by Lee et al. (2006) showed, information disclosure prior to exposure can negatively

influence evaluation compared to information disclosure following exposure, the latter yielding

results nearly as positive as when no information was given.

Given these results, it seems valuable to carry out a replicative study that could strengthen either

position of a positive or negative effect of consumer source disclosure on viewers’ advertisement

and brand evaluation, and to test the role of the timing of consumer source disclosure. Therefore

the research question of the present thesis reads as follows:

“How does the timing of consumer source disclosure of co-created advertisements affect viewers’ advertisement and brand evaluation?”

The thesis is structured as follows. First, the literature on the phenomena of co-creation and

consumer-generated advertising is reviewed, leading to the identification of the research gap and

question. Expected contributions are outlined. A conceptual framework serves for developing the

hypotheses. Next, the research design is described. Results then are analyzed in detail. Following

this, results are discussed. Theoretical and managerial implications as well as limitations and

(10)

9

LITERATURE REVIEW

1. Co-Creation

While the creation of products and exchanges has been the focus of business for decades; the new

millennium marked the beginning of a new era. Academics emphasize that, in order to develop

and maintain a competitive advantage and their customer base, companies must alter their

understanding of value and value creation (Prahalad & Ramaswamy, 2004). The introduction of

the service-dominant logic to marketing (Vargo & Lusch, 2004), and the call for brands that do

not dictate culture but provide cultural materials (Holt, 2002); stimulated the debate for a stronger

focus on co-creating value with the customer instead of creating value for the customer (Mahr et

al., 2014). The product itself moves into the background. There is conviction that consumer-firm

interaction processes mark the new “locus of value creation” (Prahalad & Ramaswamy, 2004,

p.5; Fuchs & Schreier, 2011; Mahr et al., 2014; von Hippel, 2001).

1.1. Factors that led to co-creation

Today’s market challenges companies not only in terms of increased competition. They also have

to deal with customers’ ever more diversified, sophisticated and complex needs and wants.

Responding to these, of course, is a prerequisite for success. However, capturing them in

necessary depth cannot be achieved with established market research techniques anymore. More

thorough research methods such as ethnographic studies provide deep insights, but are difficult to

conduct, costly and time-consuming (von Hippel, 2001). Further, it is questionable whether the

effort will pay off, since the new product is threatened by competition and vulnerable to

(11)

10

seem to be a valid strategy anymore. Therefore, companies seek to capture value by improving

processes and reducing costs along the value chain. In consequence, however, market forces

stimulate the price spiral to turn downwards. Finally, this leads to the “walmatization”, the quick

erosion of value, of the carefully developed offer (Prahalad & Ramaswamy, 2004, p.8). As a

result, the market presents a paradox of companies investing in a greater variety of products, but

profits and customer satisfaction being in decline (Füller, 2010; Prahalad & Ramaswamy, 2004;

Zhang & Chen, 2008). Obviously, companies need to change the way they act in the marketplace.

1.2. The customer as source of innovation

In order to respond to the unique and quickly changing needs of their users, being able to

customize their products and to serve ‘markets of one’, leading companies “abandon their

increasingly frustrating efforts to understand users’ needs accurately and in detail” (von Hippel,

2001, p.247). Rather, they open up the value creation process and outsource (innovation) tasks to

the customer "in order to get access to external ideas and solutions” (Füller et al., 2011, p.259;

Fuchs & Schreier, 2011; Mahr et al., 2014; Poetz & Schreier, 2012; Prahalad & Ramaswamy,

2004; von Hippel, 2001). Business understood that value creation is not restricted to the

boundaries of the firm (Prahalad & Ramaswamy, 2004). In fact, it can considerably be leveraged

by actively engaging and interacting with the customer. Firms no longer see their customers as

passive, external agents - but as partners, as valuable sources of innovation and competence

(Fuchs & Schreier, 2011; Füller, 2010; Kristensson et al., 2004; Mahr et al., 2014; Poetz &

Schreier, 2012; Zhang & Chen, 2008). By “bringing production and consumption closer

together” (Achrol & Kotler, 2012, p.37) companies co-create value with their customers

(12)

11

1.3. Competitive advantage through co-creation

“[I]nvolving customers to co-create value is an important strategy for businesses competing to

[…] gain competitive advantages” (Zhang & Chen, 2008, p.242). Conventionally, customer

integration was limited to asking them about and examining their needs and desires (Füller,

2010). Engaging customers as value co-creators, however, means working in close interaction

and open dialogue (Prahalad & Ramaswamy, 2004). To a large extent, this is enabled and

realized by making use of new technologies and virtual collaboration concepts such as open

innovation and crowdsourcing (Fuchs & Schreier, 2011; Füller, 2010). Customers are asked and

willing to contribute creativity and ideas, knowledge, experience and solutions as well as skills,

effort and resources (Füller, 2010; Mahr et al., 2014; Zhang & Chen, 2008). In using these

external capabilities is where unique competitive advantage resides, that is beneficial to both,

companies and consumers (Fuchs & Schreier, 2011; Mahr et al., 2014; Prahalad & Ramaswamy,

2004; Zhang & Chen, 2008). Therefore, “business competition is shifting from focusing internal

efficiency to leverage external competence” (Zhang & Chen, 2008, p.248).

1.4. Collaboration along the value chain

The collaboration with customers is not limited to a certain step in the value creation process. Rather, “managers should consider all possible processes and activities to co-create value with

customers” (Zhang & Chen, 2008, p.248).1

Customer competence can and should be leveraged

and integrated with internal processes and resources along the value chain (Payne et al., 2008;

Zhang & Chen, 2008).

1

Customer involvement is beneficial for developing, designing, testing and selecting new ideas, concepts and products (Fuchs & Schreier, 2011; Füller, 2010; Füller et al., 2011; Prahalad & Ramaswamy, 2004), as well as for “production, assembly, distribution, retail, [and] after sales service” (Zhang & Chen, 2008, p.243).

(13)

12

Following this, one growing trend in business practice is the co-creation of advertisements, also

referred to as consumer-generated advertising.

2. Consumer-Generated Advertising

The upsurge of the Internet did not only enable and facilitate communication from company to

customer, but also from customer to customer. Especially through the emergence of social media

platforms, customers were empowered to act and interact, and thereby to create and disseminate

content (Pehlivan et al., 2011). Whereas user-generated content (UGC) earlier was reduced to a

textual form, it increasingly comes in the form of images and videos (Madden, 2007; Purcell,

2010). This development is attributable to the combination of platforms such as YouTube,

Facebook and Twitter - allowing the publication and distribution of content; and broadly

accessible media software and modern recording technologies such as smartphones and

camcorders - facilitating the creation of video content (Berthon et al., 2008; Campbell et al.,

2011; Etimur & Gilly, 2012; Lawrence et al., 2013; Pehlivan et al., 2011). Often,

consumer-generated video content is brand-related and resembles company-created ads (Campbell et al.,

2011; Etimur & Gilly, 2012; Muñiz & Schau, 2007; Pehlivan et al., 2011; Walker, 2006).

Over the past ten years, the marketing phenomenon of consumer-generated advertising (CGA), which Berthon et al. (2008, p.8) define as “any publicly disseminated, consumer-generated

advertising message whose subject is a collectively recognized brand”, has become quite popular.

The American chips producer Frito-Lay Doritos is considered a peer in the use and leverage of

CGA. This year for the tenth time, the company ran its by now famous ‘Crash the Super Bowl’

contest for consumer-generated advertisements and placed the winner ads in “the most expensive

(14)

13

p.2). Each year, the performance of these ads was impressive.2 Inspired by Doritos ads’ success, many companies followed this example.3 However, the practice of CGA did not initially start with companies addressing their consumers to generate ads for them.

2.1. Solicited versus unsolicited CGA

The phenomenon of consumer-generated advertising started organically (Lawrence et al., 2010).

It developed naturally from consumers engaging in brand-related video content creation online.4 This contrasts the phenomenon of co-creation as outlined in chapter one, which started with firms

asking consumers to interact with them. Only when companies recognized the value of involving

consumers in ad-development, they started to sponsor ad-creation competitions and to actively

encourage and enable the creation and dissemination of CGA (Lawrence et al., 2010). Today,

brands increasingly address consumers asking them either to develop advertisement concepts

which will then be realized by an ad agency; or even to submit produced ads ready for

broadcasting (Thompson & Malaviya, 2013).

As a result, we can observe two types of CGA: either it is company-solicited and created in the

frame of firm-sponsored ad-creation contest, which extant literature refers to as ‘solicited CGA’

2

As Lawrence et al. (2013, p.292) report, they not only “won awards […], [drew] the most positive ratings in the Super Bowl Ad Review […], ranked in the number one spot in USA Today’s Ad Meter rankings […], generated the most tweets and positive sentiments in the Mullen Brand Bowl […], and supported the ‘most buzzed about brands,’ according to Nielsen BuzzMetrics”. Also, “according to Ann Mukherjee, senior vice president and chief marketing officer for Frito-Lay North America, Doritos’ CGA campaigns have been the most successful marketing initiatives in the brand’s history, garnering improved performance on metrics including pass-along value, online currency, media value, and brand equity” (Lawrence et al., 2013, p.292).

3

Also Unilever, General Motors, the National Football League, PepsiCo and Bayer used this form of advertising and placed them during the Super Bowl or the Oscars (Etimur & Gilly, 2012; Lawrence et al., 2010; Lawrence et al., 2013; Thompson & Malaviya, 2013). Amazon, American Express, Converse, Google, Heinz, L’Oréal, Microsoft, Mozilla Firefox, Nike, Procter & Gamble, Sony, Toyota and Walmart are some further examples that make use of consumer-generated advertisements in their communication mix (Bosman, 2006; Etimur & Gilly, 2012; Lawrence et al., 2010; Lawrence et al., 2013; Walker, 2006).

4

For example, in 2004, school teacher George Masters created and uploaded an ad for the iPod that due to its highly professional appearance caught the attention of thousands of people and quickly spread on the web (Ives, 2004).

(15)

14

or ‘contest(-generated/-inspired) CGA’; or it is unsolicited by companies and pro-actively created

by consumers, which extant literature refers to as ‘unsolicited CGA’, ‘consumer CGA’, ‘organic CGA’ or ‘naturally-occurring CGA’ (Etimur & Gilly, 2012; Lawrence et al, 2010). While

unsolicited CGA is a pure form of UGC, that is “initiated as well as created by consumers,

solicited CGA can be viewed as hybrid forms of content that are firm-initiated and consumer-created” (Etimur & Gilly, 2012, p.116).

In the face of this distinction, it has to be criticized that extant literature often interchangeably

uses the terms “co-created ads” and “consumer-generated ads”. They cannot be used as

synonyms per se. Rather; consumer-generated ads describe unsolicited CGA, whereas co-created

ads describe firm-solicited CGA. Therefore, in the remainder of this thesis, the terms CGA/

CGAs are used when referring to consumer-generated advertising/ advertisements in general. The

terms solicited CGA and unsolicited CGA are applied when referring to either of the two forms.

Whether solicited or not, the phenomenon of CGA challenges the traditional view of advertising.

2.2. From traditional advertising to CGA

Whereas advertisements traditionally were created by companies and consumed by customers,

CGAs demonstrate the convergence of the production and consumption of ads (Berthon et al.,

2008). Due to advertising’s importance for branding, marketing and sales, its liberation, marked

by the upsurge of CGA, needs to be taken seriously.

2.2.1. The traditional role of advertising

Conventionally, firms used advertisements with the intention to trigger awareness, recall and

(16)

15

as such; to build mind share by generating attitude and invoking positive associations and

emotions; as well as to persuade and influence the behavior of present and potential customers

(Berthon et al., 2008; Campbell et al., 2011; Etimur & Gilly, 2012; Pehlivan et al., 2011). Several

models have been developed that conceptualize how advertisements work.

The first formal and most basic model of advertising is ‘AIDA’, developed by E. St. Elmo Lewis

in 1898 (Vakratsas & Ambler, 1999). The model describes the through advertisements triggered

sequence of Attention, Interest, Desire and Action.

A more detailed framework of ‘how advertising works’ has been established by Vakratsas and

Ambler (1999), who summarized the advertising knowledge developed since 1960. They describe

the advertisement itself - the advertising strategy composed of message content, media

scheduling and repetition - as input consumers receive from a brand. This input is intended to

elicit a behavioral response from the part of the consumer - choice, purchase, consumption/

usage, loyalty, habit etc. However, before advertising affects consumers’ behavior, it first affects

them, consciously or not, mentally. These mental effects are described as consumers’

intermediate responses to advertising, which can be cognitive, affective, and experiential. To

some extent, the marketer can control for the desired response dimension by positioning the ad message accordingly. However, consumers’ individual responses are mediated by some factors,

considered as filters of the advertising input. The major filters are ability and motivation to

process the input as well as attitude toward the ad, which can dramatically alter or change consumers’ response. In conclusion, this leads to a model describing the functioning of

advertising as follows: the consumer receives advertising input from a brand, filters this

(17)

16

Another model justifying the importance of advertising for branding, marketing and sales is the

Dual-Mediation Hypothesis. Initially developed by Lutz et al. (1982), the model has received

significant empirical support since (Brown & Stayman, 1992). It posits the following three causal

relationships on two paths: Path one posits that Ad Cognitions lead to Ad Attitude. Path two

posits that Brand Cognitions lead to Brand Attitude which leads to Purchase Intention.

Additionally, the model postulates that these two paths are connected: Ad Attitude has a direct

effect on Brand Attitude and an indirect effect on it by directly affecting Brand Cognitions. As a

result, this model explains how advertising affects purchase (intention). Further research

suggests, that ad attitude and especially ad likeability indicate ad effectiveness best, as it has been

shown that they are positively related to persuasion and the ad’s impact on sales (Haley &

Baldinger, 1991)

All these models show that advertising is an important tool for companies to influence consumers’ perceptions, attitudes and behavior with respect to the brand. With CGA, however,

this powerful tool is no longer privileged to companies only.

2.2.2. The liberation of advertising

The upsurge of CGA demonstrates that advertising has become liberated from companies’ and agencies’ exclusive control, and that ordinary consumers are willing and able to become

advertisers (Berthon et al., 2008; Campbell et al., 2011; Creamer, 2007; Etimur & Gilly, 2012;

Klaassen, 2006; Muñiz & Schau, 2007; Pehlivan et al., 2011). This implies that consumers are no

longer only passive recipients of brand communications (Berthon et al., 2008; Pehlivan et al.,

2011). Now, they also actively “communicate on behalf of […] firms and participate in creating

brand images” (Etimur & Gilly, 2012, p.116). Therefore, with consumers taking over tasks for

(18)

17

the traditional view of advertising as a form of company-controlled [unidirectional] communication” (Etimur & Gilly, 2012, p.116). Specialists acknowledge that a ‘revolution in

advertising’, a ‘branding reformation’ towards ‘brand co-creation’ and ‘co-promotion’ is taking

place (Berthon et al., 2008; Walker, 2006). Consumers are “influencing marketing strategy as never before”. At the meeting of the Association of National Advertisers 2006, the sectors’ most

important conference, the speakers “declared that it’s time to give up control and accept that

consumers now control their brands” (Creamer, 2007). Supporting this view, Advertising Age

awarded ‘The Consumer’ as Agency of the Year 2006 (Creamer, 2007).

Even though companies’ ultimate advertising goals are the same with CGA as with conventional

ads; business and research recognized CGA’s unique characteristics with respect to its meaning

for companies and consumers.

2.3. Meaning of CGA for companies

As consumers can have different motivations to engage in CGA, the messages they communicate

with the ads they create can be positive or negative. As a result, CGA can represent both, an

opportunity or a threat for companies. Therefore, and in light of advertisements’ general impact

on consumers as described in 2.2.1., it is necessary to know how to manage the phenomenon.

2.3.1. CGA - A double edged sword

The reasons for companies’ interest in consumer-generated ads are compelling. First of all, they

provide insights and fresh ideas. They demonstrate how consumers perceive the brand and the

firm; and they allow firms to tap into consumers’ creativity (Muñiz & Schau, 2007; Thompson &

(19)

18

firms can learn how to frame ad messages that consumers perceive as compelling (Campbell et

al., 2011; Muñiz & Schau, 2007).

Second, by involving the customer in ad-development, companies can respond to the need of

interaction, collaboration and engagement building (Etmiur & Gilly, 2012; Howard, 2006;

Lawrence et al., 2010; Thompson & Malaviya, 2013). Allowing consumers to participate in the

communication of the brands they love but also hate, enriches the advertising experience and

offers a venue for investing emotion and passion (Berthon et al., 2008; Howard, 2006; Muñiz &

Schau, 2007). With the customer a co-owner of the brand, the brand and the meaning of its

messages become richer in credibility and authenticity, more personal and more relevant. This

helps to create a stronger relationship between the customer and the brand, to make the brand

more approachable, and to differentiate it from competitors (Lawrence et al., 2010; Wong, 2009).

Third, CGAs are thought to trigger more and deeper consumer involvement than traditional ads

due to their inherent social dimension - “the community environments into which CGAs are posted, […], and the active forwarding and sharing of CGAs” (Lawrence et al, 2010, p.5).

Simultaneously, this implies positive WOM for the company (Wong, 2009).

Another advantage is that consumer-generated ads strongly resemble traditional ads. In their

study, Etimur and Gilly (2012) reveal, that CGAs, just as traditional ads, aim to persuade

viewers, and also have a deceptively similar “look and feel”. Also Muñiz and Schau (2007)

acknowledge that consumers are able and quite skilled in creating brand-related communication.

According to them, they produce content of high quality and ready for broadcasting that is

original and sophisticated, as it uses the styles, grammars and logics of professional

(20)

19

Additionally, “CGAs inspired grassroots marketing that cut through the clutter with resonant

messaging at lower costs” (Lawrence et al., 2010, p.3). This does not only refer to production

costs. Whereas companies conventionally had to buy into consumer attention; online platforms

allow ad dissemination at no cost (Campbell et al., 2011). Also, they generate lots of free

publicity for the firm (Berthon et al., 2008), that can reflect positively on sales and firm image.5

However, CGA is “a double-edged sword” (Pehlivan et al., 2011, p.314). Story (2007) reports, that with CGA contest, “companies have found that inviting consumers to create their advertising

is often more stressful, costly and time-consuming than just rolling up their sleeves and doing the

work themselves”. Obviously, it requires quite some effort to go through all the submitted ads,

next to considerable upfront investment to promote the contest as well as placement fees for the

ads aired on TV.

Also, Heinz, for example, had to cope with consumers criticizing the company to be “looking for cheap labor” and to be “lazy to ask consumers to do its marketing work” (Story, 2007).

A fact that is even more critical is that consumers have the freedom to generate both, positive as

well as negative messages (Pehlivan et al., 2011). Chevrolet is an example of a firm that

encountered negative consequences. When running a CGA campaign for their Tahoe brand, the

company had to deal with one in five submissions being derogatory toward the brand by mainly criticizing the SUVs’ environmental impact (Bosman, 2006; Sandoval, 2006). Also brands such

as United Airlines and Dove were confronted with “parody-heavy CGA campaigns” (Lawrence

et al., 2013, p.293).

5 _{Perfetti van Melle’s Mentos brand encountered a 15% sales increase following “The Diet Coke & Mentos}

Experiment”, a consumer ad that went viral in 2006 (Creamer, 2007). Converse experienced a similar 12% sales growth and the Web site’s monthly visits went up 40% (Kiley, 2005). Procter & Gamble even acknowledged that CGA helped the company to change perceptions of the firm from being conservative to being innovative among various stakeholders (Etimur & Gilly, 2012)

(21)

20

These examples show that by putting brand communication in the hand of the consumer;

companies lose control over the brand message, thereby risk message inconsistency, and even

expose the brand to ruinous attacks and disaster (Berthon et al., 2008; Story, 2007). This

challenges the view of Muñiz and Schau (2007, p.35), who elaborate on CGA using the term ‘vigilante marketing’, which they define as “unpaid advertising and marketing efforts, including

[…] commercially oriented communications, undertaken by brand loyalists on behalf of the

brand”. The mentioned negative examples show that CGAs are not always created by brand

loyalist, but also by people that want to harm the brand.

This inspired Berthon et al. (2008) to perform a study on the motivations of customers to engage

in ad-creation for companies.

2.3.2. Consumers’ motivations to engage in CGA

By means of in-depth interviews with customer ad-creators, Berthon et al. (2008) revealed three

main factors of motivation: First, consumers can be motivated by intrinsic enjoyment of the

creative task and see ad-creation as a hobby, an end in itself. Second, consumers can be

motivated by self-promotion and engage in ad-creation for professional reasons, see it as means

to an end. Third, consumers can be motivated to change perceptions, whereby they also see the

ad-creation as means to an end, the end to influence viewers. These motives are not exclusionary

but can also come in combination. All in all, this implies that ad-creator motivation is not

necessarily subjective. It can also be instrumental and outwardly directed.

This further illustrates that consumer-generated ads are likely to be positive when creators are

(22)

21

explains the danger of CGA resulting in negative content. Therefore, the phenomenon is risky

and needs to be managed.

2.3.3. Strategies to manage CGA

Berthon et al. (2008) developed a framework of CGA management strategies consisting of two

axes: The first axis depicts the firm’s general attitude toward CGA (positive vs. negative). The

second axis depicts the firm’s action when confronted with CGA (active vs. passive).

Consequently, there are four ways to react to CGA.

In the most extreme cases, companies repel and actively show their negative attitude toward

CGA. A softer approach, that prevents companies from missing out valuable opportunities to

learn from and engage with its customers, is to simply disapprove CGA. Although having a

negative attitude toward CGA, the firm does not react but ignores consumers’ creativity. This

prevents a possible over-reaction and permits watching the consequences before entering into

debate. However, this may implicitly communicate to be indifferent or even powerless in face of

consumers taking over brand message control. Therefore, when deciding not to actively engage

with CGA, companies should rather show a positive attitude and applaud it. This leaves the door

open to actively engage with CGA at a later stage.

According to Berthon et al. (2008), the most advisable way to respond and manage CGA is by

facilitating it. This implies that the firm holds a positive attitude towards and actively engages

with CGA. It encourages and solicits it by co-opting ad-creation contests and by helping

consumers in the ad-production process through the provision of software and other helpful tools.

This hands-on approach is steadily gaining popularity. It is the strategy with the most compelling

(23)

22

from fruitful interaction with its customers that yield insights and authentic, creative ideas in a

cost-effective way. Also, this will favor customers’ attitude towards the company. It makes the

firm look open to consumer creativity, but also helps to frame creativity. As the produced ads are

submitted to the company-contest website only, which is less public; created ads are not readily

available, and the company has control over the content that is distributed and broadcasted. In sum, “solicited, contest-based ads enable consumers to participate in the creative process while

giving firms greater control over the brand message” (Thompson & Malaviya, 2013, p.33).

However, control still is limited and the strategy is not free of risk, as results still can be negative

and parodic. This is exemplified by the case of Chevrolet, whose failed campaign had been a

competition that provided tools intended to frame message outcomes.

However, “[f]or many, the promise of deeper engagement on the part of the consumer has won out over concerns about the loss of brand control” (Lawrence et al., 2010, p.4). There is a popular

belief and strong anecdotal evidence, that CGAs performs more effective and beat out

professional ads, not only in terms of production value (Lawrence et al., 2010; 2013). The fact, that “they are consistently the most watched, the most memorable, and the

most-often-talked-about ads hints at the potential psychological advantages of this communications form”

(Lawrence et al., 2013, p.292). Therefore, research also investigated how CGA impacts viewers.

2.4. Meaning of CGA for viewers

While it has been shown that CGA, especially in its co-created form, in most cases is

advantageous to firms, it remains to clarify how CGA affects viewers not involved in the

ad-creation process. Since winner ads are subsequently broadcasted online and on television, and

(24)

23

why CGA is beneficial with regard to viewers. In particular, it is of interest how viewers react to

the fact that an ad had been created by a fellow consumer.

The peripheral processing route of the Elaboration Likelihood Model (Petty & Cacioppo, 1986)

posits that cues and inferences drawn from a message affect attitude, evaluation, and

attitude-behavior. The message source is such a cue. Therefore, knowing that the message source is a

consumer should lead to a different response to CGA than to conventional advertising.

At the beginning of the second chapter, CGA has already been introduced as a special form of

user-generated content (UGC). UGC, in turn, is regarded as an electronic form of word-of-mouth

consumer-to-consumer communication (WOM/eWOM) (Etimur & Gilly, 2012). Therefore,

researchers and practitioners suggest that the differential effect of CGAs compared to

company-created ads mainly lies in the point that they may be perceived and operate as WOM

communication (Berthon et al., 2008; Etimur & Gilly, 2012; Lawrence et al., 2010).

2.4.1. Is CGA word-of-mouth communication?

Evidence from the WOM and UGC area reveals that consumers have higher trust in UGC than in

advertising (Nielsen Company, 2007). Also, it has been shown that consumers are more likely to

listen to and to be influenced by information coming from other consumers than that stemming

directly from marketers (Blickard & Schindler, 2001; eMarketer, 2007). This is due to messages

coming from a source that is similar to the self (a fellow consumer) being more relevant to the

receiver. Further, these messages are perceived diagnostic rather than manipulating. This

enhances credibility and persuasiveness (Blickard & Schindler, 2001). “Trustworthiness of the source is a key determinant of persuasiveness […] as source motivations and intentions play a

(25)

24

trustworthiness of the ad source have been shown to influence viewers’ attitude towards the ad,

the brand, as well as purchase intentions (Goldsmith et al., 2000).

In further support of CGA, Etimur and Gilly (2012) gleaned information stemming from prior

research on the pitfalls of conventional advertising. As a main issue they point out, “that consumers, over time, develop knowledge about marketers’ persuasion tactics that help them

identify how, when, and why marketers are trying to influence them” (Etimur & Gilly, 2012,

p.117). They report on evidence revealing that consumers consequently are rather skeptical

towards and tend to distrust advertising. Therefore, they put the effectiveness of corporate

advertising efforts into question. As consumers know about company ads’ intent to persuade,

they perceive them as less authentic (Holt, 2002).

In conclusion, researchers’ and practitioners’ conviction of CGA as a valuable marketing tool

stems from the argument that CGAs, contrary to conventional ads, but similar to WOM

communication, may not be perceived as being commercially motivated in the first place. Rather,

due to the message source being an ordinary consumer, CGAs may be perceived as more

relevant, authentic, honest, sincere and credible than conventional ads and, as a result, should be

more effective (Berthon et al., 2008; Etimur & Gilly, 2012; Lawrence et al., 2010; Pehlivan et al.,

2011). In their study, Etimur and Gilly (2012) report that viewers acknowledge CGA creators’

refreshing view and their intrinsically motivated effort. Not having the intent to sell, being similar

to the self, and having product usage experience, the ad creator is perceived to make message

claims that are less extreme but valid and trustworthy.

Yet, counterarguments exist. In the case of unsolicited CGAs that pop up and spread online,

(26)

25

as its authority is suspect. Solicited CGAs are criticized even more sharply by them. Contrary to

the common belief and as shown in 2.3.2., consumer engagement in CGA contests is not always

free of economic motives. Indeed, participants often are professionals aiming to promote

themselves. Etimur and Gilly (2012) show that the creators of solicited CGAs are perceived least

credible, as they are suspected to have neither use nor product knowledge. Further, as companies

still are involved in and have control over message creation and dissemination, they suggest that

solicited CGAs may not be perceived as the real consumer voice and communication free of

company influence. Their results confirm that viewers “recognize the dual source of contest ads”

(Etimur & Gilly, 2012, p.122). They further argue that solicited CGAs may be perceived very

similar and not any differently than conventional ads. As outlined in 2.3.1., most

consumer-generated and co-created advertisements have a deceptively similar “look and feel” and also aim

to persuade viewers, just as professional ads do. They found that with solicited CGAs, consumers

engage in assessing the ads’ persuasion tactics and goals. They interpret the contest itself as

means for generating WOM, and evaluate the likelihood of the ad to achieve this. Further, while

viewers perceive CGAs as being consumer-to-consumer communications operating like WOM;

they also recognize CGAs as advertising, and therefore understand that their underlying intent is

to sell. With this same argument, also Thompson and Malaviya (2013) question the view of

CGAs as WOM. Due to these reasons, consumers might disregard CGAs just as they do

conventional ads (Etimur & Gilly, 2012).

In summary, as Etimur and Gilly (2012) conclude as well, CGA is to be seen neither as WOM

nor as traditional advertising. Therefore, research was interested in alternative explanations for

(27)

26

2.4.2. Drivers of increased CGA effectiveness

In their study, Lawrence et al. (2013, p.293) investigated whether “CGAs have communication

advantages over traditional company-sourced ads, and why”. Analyzing comments for CGAs on

YouTube, they uncovered four possible drivers that might explain CGAs’ enhanced persuasiveness and effectiveness: “trustworthiness, identification with the ad creator, judgements

of executional quality, and viewer engagement” (Lawrence et al., 2013, p.293). According to

their study, the main factor that explains the performance advantage of CGAs is the fact that the

ad creator is a consumer, not a company.

By means of experiments Lawrence et al. showed that consumer ad-creators and their message

claims, and consequently CGA as such, are rated as more authentic and honest, and therefore

more trustworthy and credible compared to their, judged as manipulating, company-created

counterparts. As they report, this finding is in line with evidence from social psychology that

recognizes the central role of trustworthiness and source credibility as drivers of persuasion and

effective communication. Lawrence et al. further found that the effect of the consumer ad-creator

on perceived trustworthiness and credibility holds across creator motives - whether motivated

intrinsically or by self-promotion and profit. Even if solicited CGAs, which infer some company

involvement, are perceived as being more economically motivated than unsolicited CGAs, this had no effect on viewers’ trust in the ad, the creator, and the message claims. Also Hautz et al.

(2014) could find that source trustworthiness is perceived higher for CGAs, which therefore have

a stronger influence on behavioral intentions than firm-generated ads, but only when the ad is of

low technical quality. Source expertise is rated higher for CGAs independent of ad quality. These

results are only partially supported by the study of Etimur and Gilly (2012). Analyzing consumer

(28)

27

viewers do see CGAs as being more authentic and credible than company ads - when asked

hypothetically. However, when actually evaluating CGAs, results were different. In this case,

respondents viewed unsolicited CGAs as being authentic, but unconvincing and less credible than

solicited CGAs or company-created ads. Solicited CGAs, however, were regarded as being less

authentic than unsolicited CGAs or company-created ads, as respondents doubt that the creator

has use knowledge comparable to the consumer, and product knowledge comparable to the

company. This difference between the two types of CGAs could not be supported by Lawrence et

al. (2010). Contrary to their supposition that unsolicited CGAs, due to being pure UGC and

distant from possible firm influence and control, might possess communication advantages over

solicited CGAs, they could not find systematic differences in viewers’ judgement of authenticity,

credibility and trustworthiness.

As a second driver of CGAs’ effectiveness over company ads, Lawrence et al. (2013) supposed viewers’ identification with the ad creator. However, contrary to this hypothesis and evidence

that people are more likely to be influenced and persuaded by people perceived as similar to

them, identification of the self with the ad creator and a feeling of personal connection did not

contribute to a more favorable reception of CGAs. Even if this is something traditional company-

or agency-created ads never can achieve, it does not explain CGAs’ communication advantages.

However, there was support for the suggested ability of CGAs to engage viewers more deeply,

and it has been shown that ad source had a significant effect on this. Viewer engagement exists

on several levels: cognitively6, emotionally7, personally8, and behaviorally9. Also, they could

6

commenting on the ad and its message claims 7

commenting on the ad’s entertainment value 8

commenting on the personal relevance of the brand or the ad 9

(29)

28

empirically link engagement to ad performance, implying increased persuasion and effectiveness

of CGAs due to viewer engagement. Increased viewer engagement with CGAs has also been

detected by Etimur and Gilly (2012), who found that viewers, when commenting on company

ads, mainly refer to the advertised brand, whereas when commenting on CGAs, they rather

elaborate on the ad itself and act as ad critics. Therefore, CGAs fail to engage viewers more

deeply with the brand. This has also been found by Campbell et al. (2011). Pehlivan et al. (2011),

however, did not find such effects, as for both ad types comments primarily dealt with the

product while the ad itself was only of second importance.

Additionally, Lawrence et al. (2013) identified perceived ad and executional quality as

determinants for viewers’ more favorable reactions to CGAs. Even if a consumer-generated ad’s

quality actually is low, viewers judge it more favorably. This is explained by the fact that

viewers’ expectations in the quality of CGAs are lower, and that they judge and evaluate CGAs

based on different standards and criteria. Whereas viewers expect company ads to be of high

executional quality; they accept trade-offs on quality and focus on authenticity and artistic

originality when evaluating CGAs. Viewers even consciously agree on the statement that they

apply lower standards and are less critical towards CGAs. This is challenged by Thompson and

Malviya (2013), who found that consumers are actually more critical when evaluating CGAs.

The present paragraph shows, that the common belief of CGAs performing more effective versus

conventional company- or agency-crafted ads, cannot be supported or rejected per se. Whereas

Lawrence et al. (2013) support the belief, other studies point to contingency based results. To

name another point of view, Steyn et al. (2011) did not find any difference in consumer

(30)

29

As explained by the theory of the Dual Mediation Hypothesis in paragraph 2.1.1., exposure to an

advertisement leads to the formation of attitudes towards the ad and subsequently towards the

brand. Therefore, research also was interested how these specific factors are affected differently

by CGA than by conventional advertising.

2.4.3. CGA’s effect on advertisement and brand evaluation

Two prior studies were identified that analyzed how viewers’ advertisement and brand evaluation

is affected by informing them that an ad had been co-created.

2.4.3.1. The study by Lawrence et al. (2010)

Lawrence et al. (2010) tested the assumption that consumer-generated ads, compared to

conventional ads, yield more favorable results in terms of attitude towards the ad and the brand.

In their experiment, they tested viewer evaluation in two conditions: the sample in the first

condition was told that they will see a co-created ad (solicited CGA), while the sample in the

second condition got no information. Indeed, the source disclosure condition rated the

consumer-generated ad higher on all tested elements: attitudes toward the ad, perceptions of executional

quality, personal relevance of the ad message, brand interest, and purchase intent. These results

suppose that consumer source disclosure positively impacts viewers’ advertisement and brand

evaluation, and that CGAs therefore outperform conventional ads. Lawrence et al. (2010, p.9)

conclude that consumer-generated ads are “inherently more persuasive”. Based on their results,

they claim that this is due to higher personal relevance of these ads. This largely generalized

(31)

30

2.4.3.2. The study by Thompson and Malaviya (2013)

Thompson and Malaviya (2013, p.34) investigated “under what conditions informing viewers

that another consumer created an ad enhances, or perhaps undermines, message persuasiveness”.

They hypothesized that knowing that an ad had been co-created could enhance message

persuasiveness, as viewers perceive the co-creator as someone more similar to the self, with

whom they can identify, and who is therefore more trustworthy than a professional persuader. On

the other hand, they argue that knowing that an ad had been co-created could undermine message

persuasion, as viewers are skeptical about peer consumers being able to create and produce effective, professional advertising. They tested this “skepticism-identification” model by means

of experiments. Their results showed that under specific circumstances, both hypothesis hold.

In contrast to Lawrence et al. (2010), who found a positive impact of consumer source disclosure

on advertisement and brand evaluation versus a control group, the study by Thompson and

Malaviya (2013) found a negative impact, which could be explained by viewers’ skepticism, as

hypothesized.

However, they found that disclosing the consumer source yields more positive ad and brand

evaluations compared to the control group, that received no information on ad source, under the

following circumstances: first, when specific background information was provided that made the

co-creator easily identifiable with the self10; second, when viewers are loyal to the brand; and third, when viewers see the ad under high distraction conditions and therefore cannot deeply

process the information about the creator being an ordinary consumer.

10

(32)

31

2.4.3.3. Discussion of the results found by Thompson and Malaviya (2013)

It is questionable, whether the previously mentioned circumstances that were identified to favor

persuasion, can be readily established in ordinary broadcasting situations. Above all, it is

challenging to communicate ad-creator background information that reliably triggers feelings of

identification with the entire target group. Also, the fact that brand loyalty is a necessary

condition for co-created ads to yield positive evaluations, does not speak for their effectivity,

since the aim of advertisements is to appeal new customers that are not yet loyal to the brand as

well. Finally, it is to criticize that the situation of high distraction in the experiment was created

from outside and not by the ad itself. Even if ads often are not processed deeply, ad-creators

cannot manipulate for that. With respect to these points, the results of the study by Thompson and

Malviya suppose that it is more likely that the communication of the ad-creator will yield

negative advertisement and brand evaluation.

Another critical fact is that Thompson and Malaviya did not use the same advertisements across

all their studies what puts the comparability of their results into question. The ads in the pilot

study yielded more negative evaluations when depicted as consumer-generated; the ads in the

following studies, where variables were manipulated11, yielded more positive results under consumer source disclosure, compared to the control group. It is, however, possible that results

would have been consistently negative or positive for the source disclosure condition across all

studies, if the researchers would have used the same ad. It can be supposed that the ad itself

moderated the effect of source disclosure on ad and brand evaluation. This is supported by

Miniard et al. (1990), who found that message manipulation can considerably influence both,

advertisement and brand evaluation.

11

provision of background information about the co-creator, ad of a brand that viewers are loyal to, constrained cognitive resources of viewers

(33)

32

RESEARCH

3. Research Gap and Research Question

The fact that the studies by Lawrence et al. (2010) and Thompson and Malaviya (2013) basically

measured the same effect, that is, the effect of consumer source disclosure on viewers’

advertisement and brand evaluation, but yielded opposing results, indicates that the issue

deserves further investigation. Whereas Lawrence et al. (2010) found a positive effect; Thompson

and Malaviya (2013) concluded that the effect is negative. Therefore, a replicative study that

could strengthen the one or the other position seems valuable. With respect to the discussion

provided on the study by Thompson and Malaviya (2013), see 2.4.4.1., the replicative study

should use two different advertisements.

Further, it is to mention that consumer source disclosure, in both studies, preceded exposure. The

samples received the information that the ad has been co-created prior to watching it. Thompson

and Malaviya (2013, p.46) claim that “the timing of viewers’ learning about the consumer source

(before or after ad exposure) deserves further investigation”. As an experiment by Lee et al.

(2006) shows, information disclosure prior to exposure can negatively influence evaluation,

compared to information disclosure following exposure, the latter yielding results nearly as

positive as when no information was given. Therefore, it is indeed interesting to test the effect of

the timing of consumer source disclosure on viewers’ advertisement and brand evaluation.

Given these insights, the research question of the present thesis reads as follows:

“How does the timing of consumer source disclosure of co-created advertisements affect viewers’ advertisement and brand evaluation?”

(34)

33

4. Expected Contribution

The present study aims to contribute to the extant literature on co-created and consumer

generated advertising. In the first place, the study intends to strengthen either of the opposing

positions regarding the impact of consumer source disclosure of co-created advertisements on viewers’ advertisement and brand evaluation. Second, it aims to close the research gap identified

by Thompson and Malaviya (2013) by investigating the effect of the timing of consumer source

disclosure (prior versus post ad exposure) on viewers’ evaluation of the ad and the brand. Also,

this will complement the study by Lee et al. (2006), who analyzed the effect of information

disclosure prior versus post an experience versus the absence of information disclosure on the

evaluation of the experience. Third, the study is expected to give exemplify to which extent

different ad messages influence overall ad and brand evaluation. Also, it investigates whether

prior ad and brand knowledge have an impact. As a side effect, the design of the present study is

likely to add insight and support to the large body of research studying the effect of

advertisement on brand evaluation, that is, the Dual-Mediation Hypothesis and its variations.

From a managerial perspective, the study is another attempt to validate whether and how the

application of co-created advertising impacts viewers’ ad and brand evaluation. Above all, to the

best of my knowledge this it is the first study that investigates whether and how the timing of

consumer source disclosure of co-created advertisements impacts viewers’ ad and brand

evaluation. Thereby, it addresses the research claim made by Thompson and Malaviya (2013) and

adds to their research effort by investigating how the effectiveness of co-created advertisements

could be improved. Next, it aims to demonstrate how differing ad messages lead to different ad

and brand evaluations. In sum, this will give insight for a better management of co-created,

(35)

34

5. Conceptual Framework and Hypotheses

The differential effect consumer source disclosure prior versus post ad exposure is expected to have on ad and brand evaluation is based on the psychological phenomenon that “[t]he quality of

an experience is jointly determined by bottom-up processes, which reflect characteristics of the stimulus impinging on the perceiver’s sensory organs, and top-down processes, which reflect the

perceiver’s beliefs, desires, and expectations” (Lee et al., 2006, p.1054). Translating this to the

present research question, this implies that viewers’ ad and brand evaluation is determined by

both, the ad itself as well as by what viewers belief, desire and expect from the ad.

This is comprehensible, as evaluation, generally speaking, bases on comparison - the comparison

of an actual value with a predetermined intended value. The intended value thereby serves as

point of reference that enables to draw a conclusion about whether the actual value is higher or

lower, better or worse. Often, however, values in question for evaluation are not quantifiable and

objectively measurable, such as for example the quality of an experience, an ad or a brand.

Therefore, unquantifiable, qualitative concepts are evaluated by comparing what actually

occurred to what was expected to occur. More precisely, “[p]erceived […] quality is […] viewed as the degree and direction of discrepancy between consumers' perceptions and expectations”

(Parasuraman et al., 1988, p.17). This means that consumers evaluate quality by comparing their

expectations to the actual experience in valence and in intensity, and thereby are able to conclude

whether something is of very good/bad, or just of fairly good/bad quality (very much

better/worse or only slightly better/worse than what was expected).

As Lee et al. (2006) report, there is a large body of research and numerous diverse examples

(36)

35

experience itself (bottom-up process), but are also strongly influenced by information received

and expectations formed prior to this experience (top-down process). In this sense, research

showed that expectations influence cognitive perception as, for example, “assessments of a person’s ability are influenced by expectations of his or her ability, as well as by objective

performance measures”, “the enjoyment of a film is influenced by expectations of its quality, as

well as by its true quality”; and that expectations even influence sensory perception as, for

example “bitter coffee seems less so if consumers are repeatedly misinformed that it is not

bitter”, “Coke is rated higher when consumed from a cup bearing the brand logo rather than from

an unmarked cup” (Lee et al., 2006, p.1054).

However, the role expectations play in evaluation processes is more important than serving as

mere point of reference. According to Darley and Gross (1983), individuals do not only test the

expectations they hold about an upcoming experience during the experience, but also aim to have

their expectations confirmed. This means that instead of evaluating an experience unbiasedly,

they look for cues that can confirm their expectations and “recall expectancy-consistent information when making final evaluations” (Darley & Gross, 1983, p.22). Further, as Ross and

Lepper (1980) showed, this is even the case when information is presented that is inconsistent

with expectations, due to inconsistent information being given a substantially lower weight in

evaluation. Consequently, perceptions and evaluations are biased in favor of expectations.

An additional phenomenon is outlined by the above mentioned example that “Coke is rated

higher when consumed from a cup bearing the brand logo rather than from an unmarked cup”,

(Lee et al., 2006, p.1054). According to the findings by McClure et al. (2004), additional

information about an experience (logo on the cup) leads to different perceptions and evaluations