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Does native advertising have to be

congruent with its context?

A study on the effect of thematic (in)congruence on ad attitude via ad

recognition and ad credibility.

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2 Does native advertising have to be congruent with its context?

A study on the effect of thematic (in)congruence on ad attitude via ad recognition and ad credibility.

Master Thesis

Iris Doldersum i.doldersum@student.rug.nl

S3464202

First supervisor: dr. J. C. Hoekstra Second supervisor: dr. J. A. Voerman

Date of submission: 08-01-2020

University of Groningen Faculty of Economics and Business

Department of Marketing PO Box 800 9700 AV Groningen

The Netherlands

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Abstract

The spend on digital native advertising is already a substation part of the total advertising spend and this growing enormously the next years. Therefore, it is interesting to know what aspects of digital native advertising increases the effectiveness, so publishers can gain more revenue from native advertising. Context is key in native advertising and this makes it interesting to study. Previous research show different results of thematical congruency (with the context) on the effectiveness of advertising. In case of digital native advertising, this effect is not studied yet. Therefore, this study focusses on the effect of thematic congruency in digital native advertising. In a between subject experimental design two conditions (an incongruent and a congruent native ad) are shown to 191 participants. Results demonstrate that the effect of congruency on ad attitude is mediated by ad recognition and ad credibility. A congruent ad leads to less ad recognition and to a higher level of credibility and therefore to a higher ad attitude. Hence, it can be stated that an ad which is congruent with its context is more effective than an ad which is incongruent with its context. This study provides clear insights of thematic congruence in digital native advertising. Furthermore, the results are valuable insights for publishers and their marketers since they can use these insights to sell more effective ads to advertisers and therefore generate (more) advertising revenue.

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Preface

This thesis, about the thematical congruence of digital native advertising, is written to finalize my master Marketing. I did not expect that I would enjoy the process of writing this thesis, but I truly did.

I would like to thank my supervisor J. C. Hoekstra for her guidance, feedback and help during the process of writing this thesis. Further, I also would like to thank J. A. Voerman for being my second supervisor. Lastly, I would not be able to do this study without the respondents. Therefore, a special thanks to all the people who participated.

I will look back at a wonderful period at the University of Groningen where I learned a lot and met nice people. Now, it is time for the next step.

Iris Doldersum

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Table of content

1. Introduction 6 2. Theoretical framework 8 2.1 Conceptual model 8 2.2 Ad attitude 9 2.3 Thematic (in)congruence 9 2.4 Ad recognition 10

2.5 Ad recognition and ad attitude 11

2.5.1 The Persuasion Knowledge Theory 11

2.5.2 The Heuristic Systematic Model 11

2.5.3 The Reactance Theory 11

2.6 Ad credibility 12 3. Methodology 14 3.1 Research design 14 3.2 Data collection 17 3.3 Procedure 17 3.4 Measurements 18 3.5 Manipulation check 19 3.6 Data analysis 20 4. Results 22 4.1 Hypothesis 1 22 4.2 Hypothesis 2 22 4.3 Hypothesis 3 23 4.4 Hypothesis 4 23 4.5 Hypothesis 5 24 4.6 Hypothesis 6 24

4.7 Mediating effects hypothesis 7 25

4.7.1 Baron and Kenny method 25

4.7.2 Hayes method 28

5. Discussion 30

5.1 Hypotheses 30

5.2 Managerial implications 32

5.3 Limitations and recommendations 32

5.4 Conclusion 33

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1. Introduction and problem statement

In 2016, Wu et al. described native advertising as the next big trend, an expectation that is now reality. It is already a substantial part of advertising spending, and this is expected to rise enormously in the next five years (2020–2025). According to Adyoulike (2019), spending on native advertising will rise by 372%, to a global value of $402 billion, by 2025. This rising spending makes native advertising very interesting for publishers as a new revenue source (Wojdynski, 2016b). Many publishers, including The Guardian, New York Times and Forbes, are gaining revenue from native advertising (Wojdynski, 2016b; Harms, Bijmolt & Hoekstra, 2019).

Native advertising is a form of paid advertising that ‘takes the specific form and appearance of editorial content from the publisher’ (Wojdynski & Evans, 2016, p. 157). According to van Reijmersdal, Nijens and Smit (2005), the context of native advertisements is natural, which leads to positive evaluations, as they are considered more attractive. Furthermore, consumers seem to find this subtle form of advertising less irritating, more amusing and informative (Tutaj & van Reijmerdal, 2012). Wojdynski and Evans (2016) demonstrate that only 8% of their respondents recognized digital native advertising as advertising. This indicates that the message is not always (directly) recognized as advertisement, which results in a more positive evaluation (Tutaj & van Reijmersdal, 2012).

On the other hand, some studies also reveal negative effects of native advertising. Harms, Bijmolt and Hoekstra (2019) have found that article-style native advertising is evaluated more negatively than banner advertising. Furthermore, the amount of native advertising is increasing, and people are therefore becoming more aware of this form of advertising. Negative publicity has led to greater awareness about this form of advertising among consumers (Wojdynski & Evans, 2016), and this awareness leads to recognition of persuasive intent. The persuasion knowledge theory (PKT) explains the extent to which people understand and recognize the concept of advertising and realize when they are exposed to a persuasive advertisement (Friestad & Wright, 1994). When people are aware of advertising, a change of meaning occurs, and their defence mechanism is activated (Friestad & Wright, 1994; Tutaj & van Reijmersdal, 2012). This aligns with the heuristic systematic model (HSM), which suggests that when people are confronted with persuasive messages, their defence system is activated (Darke & Ritchie, 2007). This activation leads to a negative bias (Darke & Ritchie, 2007) and lower evaluations (Friestad & Wright, 1994; Tutaj & van Reijmersdal, 2012). Furthermore, the reactance theory explains how persuasive messages are perceived as the loss of freedom (Youn & Kim, 2019b) and how messages within which the persuasion intent is recognized are met with resistance (Brehm & Brehm, 1981).

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7 the ad into the context implies that that the ad must be congruent with its context. The context refers to the medium itself and its surrounding content (De Pelsmacker, Geuens & Anckaert, 2002). The congruence between the ad and the content of the context is called thematic congruence (Moorman, Neijens & Smit, 2002). Thematically congruent advertising is the default in advertising (King, Reid & Macias, 2004). Jeong and King (2010) and Konova and Yang (2015) indicate the existence of positive effects of advertisements in a congruent context. However, when advertising is extremely well integrated within its surrounding context, people may not notice it at all. Therefore, incongruent advertising could be more effective, since it is more prominent and visible (New, 1991). Research into the effectiveness of incongruent advertising demonstrates that an ad is processed more when it is placed in a thematically incongruent context (Dahlén et al., 2008), which leads to positive effects of incongruent advertising (Lee, 2000; Dahlén et al., 2008). So, on the one hand, some research suggests positive results for congruent native advertising, while other research suggests positive effects for incongruent native advertising. Since native advertising is expected to grow enormously, it is important to determine whether thematical congruency leads to effective ads.

Ad attitude will be used to measure the effect of the thematic (in)congruence in native advertising, since it is the general measurement to determine the effectiveness of advertisements (Tutaj & van Reijmersdal, 2012). It is ‘a predisposition to respond in a favourable or unfavourable manner to a particular advertising stimulus during a particular exposure occasion’ (MacKenzie & Lutz, 1989, p. 49). Research implies that ad attitude is influenced by ad recognition and ad credibility. The PKT, HSM and reactance theory suggest that ad recognition leads to lower ad attitude (Friestad & Wright, 1994; Darke & Ritchie, 2007). Furthermore, previous research suggests that ad credibility has a positive effect on ad attitude (Petty & Caciioppo, 1986; MacKenzie & Lutz, 1989; Ho & Ling, 2004; Jin & Villegas, 2007). Therefore, ad recognition and ad credibility are studied as mediating effects on ad attitude of digital native advertising. Native advertising can adopt a wide variety of forms (Wojdynski & Golan, 2016); this research focuses on sponsored articles on websites, since this allows thematic (in)congruence.

This study develops insights which can help publishers and their marketers to successfully generate revenue from native advertising. This will aid them in selling relevant and effective ads to advertisers (Wojdynski, 2016b). This research contributes to the existing literature by determining the effect of thematic (in)congruence for digital native advertising. Furthermore, it might shed a light on the contradictory findings of previous research.

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2. Theoretical framework

2.1 Conceptual model

Figure 2.1 shows the conceptual model, which hypothesizes a serial multiple mediation (Hayes, 2013). The primary focus is the effect of thematic (in)congruence on ad attitude, mediated by ad recognition and ad credibility. Thematic (in)congruence refers to the context of the native advertisement. Ad attitude is defined as ‘a predisposition to respond in a favourable or unfavourable manner to a particular advertising stimulus during a particular exposure occasion’ (MacKenzie & Lutz, 1989, p. 49).

This research posits that thematic congruence has a negative effect on ad recognition, which affects ad attitude (Darke & Ritchie, 2007; Boerman et al., 2015; Evans & Park, 2015; Wojdynski & Evans, 2016). Furthermore, thematic incongruence is likely to exert a negative effect on ad credibility (Darke & Ritchie, 2007; Kim & Koi, 2012), while ad credibility should have a positive effect on ad attitude (Petty & Cacioppo, 1986; MacKenzie & Lutz, 1989; Tsang, Ho & Ling, 2004; Jin & Villegas, 2007). Finally, ad recognition is expected to have a negative influence on ad credibility (Cotte, Coulter & Moore, 2005; Harms, Bijmolt & Hoekstra, 2019).

Figure 2.1: the conceptual model

Control variables:

According to Harms, Bijmolt and Hoekstra (2017), studies of the effectiveness of digital native content should control for age, since younger generations demonstrate a greater penetration of digital devices, channels and platforms. Another control variable is gender. Dahlén et al. have shown (2008) that gender exerted significant effect in their first study. Moreover, Meyers-Levy and Sternthal (1991) also mention differences in their results between males and females. Since positive evaluation of the context surrounding television and print advertisement results in a more positive attitude towards those advertisements (de Pelsmacker, Geuens & Anckaert, 2002), context evaluation is also included as a control variable. It is measured in terms of the extent to which people enjoy the website upon which the native advertisement is placed. Advertising for familiar brands may differ in effectiveness in comparison

Thematic

congruence

Ad recognition

Ad attitude

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9 with unfamiliar brands (Alba, Hutchinson & Lynch, 1991; Machleit, Allen & Madden, 1993); therefore, brand familiarity is also a control variable.

2.2 Ad attitude

Ad attitude is the generally accepted construct to determine the effectiveness of advertising (Tutaj and van Reijmersdal, 2012). It is ‘a predisposition to respond in a favourable or unfavourable manner to a particular advertising stimulus during a particular exposure occasion’ (MacKenzie & Lutz, 1989, p. 49). Since 1970, attitudes towards advertising in general have been unfavourable (Alwitt & Prabhaker, 1994; Mittal, 1994; Tsang, Ho & Ling, 2004). Ducoffe (1996) states that the extent to which an ad is perceived as irritating influences ad attitude. Since native advertisements are perceived as less irritating (Tutaj & van Reijmersdal, 2012), the ad attitude towards native advertising is probably more favourable than that towards regular ads.

2.3 Thematic (in)congruence

According to Moorman, Neijens and Smit (2002), thematic congruence enhances recall. They have found that thematic congruence has a strong positive effect on the memory of advertising. Such a top-of-mind awareness as memory has a strong positive effect on purchase behaviour (Holman & Hecker, 1983). Furthermore, Dahlén (2005) states that congruent media evokes more positive evaluations than incongruent media. Jeong and King (2010), Kononova and Yan (2015) and Harms, Bijmolt and Hoekstra (2017) also support positive effects of a congruent advertising context on ad effectiveness. On the other hand, a thematically congruent context meets the expectations people have, whereby hard processing is not necessary. People are not encouraged to pay attention to the information and think about it (Fiske, Kinder & Larter, 1983). Therefore, thematic congruence may exert a negative effect, since people pay less attention to congruent advertisement. This aligns with previous research by Dahlén et al. (2008), who state that an ad is processed more when advertising is placed in a thematically incongruent medium. This could be because incongruent advertisement is more prominent and therefore more visible (New, 1991). Moreover, Lee (2000) mentions that incongruent ads elicit higher ad message involvement than congruent ones. Ads with unexpected information, compared to ads with expected information, should elicit higher ad message involvement. Combined with the research of Dahlén et al. (2008), this suggests that placing advertisement in a thematically incongruent medium might result in positive effects.

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10 and as such, consumers would react more positively towards content congruent native advertising (Lee, Kim & Ham, 2016). Therefore, I expect the following:

H1: Thematic congruence has a positive effect on ad attitude. 2.4 Ad recognition

Advertising recognition depends on the brand’s prominence within the advertisement itself. General online advertising has a very high level of brand prominence, so people easily access persuasion knowledge (Wojdynski, 2016a). Native advertising has a low level of brand prominence, and therefore people are not always aware of the persuasion attempt. Wojdynski and Evans (2016) show that only 8% of their participants recognized digital native advertising as a form of advertising. According to Campbell and Evans (2018), using even the most successful disclosures still elicits a low rate of recognition. The disclosures ‘Advertising’ and ‘Sponsor Content’ lead to a recognition rate of 12% and 13%, respectively. This is surprising, since such disclosures are intended to prevent consumers from being misled (Hoy & Andrews, 2004). However, the amount of exposure to native advertising has increased over the last years. In the media, native advertising has received negative publicity (Carlson, 2015). Even John Oliver has discussed native advertising in a negative light, on his popular ‘Last Week Tonight’ television programme in 2014 (Richards, 2014). All of this publicity has led to increased awareness about this form of advertising among consumers (Wojdynski & Evans, 2016; Harms, Bijmolt and Hoekstra, 2019). Consumers develop personal knowledge about the tactics used in persuasion attempts, which helps them to identify how and when marketers are trying to influence them (Friestad & Wright, 1994). According to this logic, more awareness could lead to more recognition of native advertising.

Despite the recognition of the ad in general, thematic (in)congruence could affect the extent to which advertising is recognized for what it is. Kwon et al. (2019) state that advertising is more likely to be recognized when it is placed in a congruent media context. However, this contrasts with other studies. Heckler and Childers (1992), Sujan, Bettman and Sujan (1986), Childers, Heckler and Houston (1986) and Moore, Stammerjohan and Coulter (2005) mention that incongruency leads to more processing. This processing leads to more attention, which could result in persuasion knowledge (Friestad & Wright, 1994). Since thematic incongruent advertising is different than its context, it seeks attention and provides a ‘route to visibility’ (New, 1991, p. 100). Tutaj and Van Reijmersdal (2012) have found that more prominent visibility leads to more ad recognition. Therefore, the following is expected:

H2: Thematic congruence has a negative effect on the recognition of the persuasive message

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11 2.5 Ad recognition and ad attitude

2.5.1 Persuasion knowledge theory

Understanding the message intent of an advertisement is the first step of persuasion knowledge (Lawlor & Prothero, 2008). Ham, Nelson and Das (2015) describe persuasion knowledge as ‘the overall knowledge of how persuasion works’ (Harms, Nelson & Das, 2015, p. 25). The PKT suggests that when a consumer recognizes a persuasive message, a ‘change of meaning’ occurs. ‘People need to be aware of a persuasion attempt before they can activate persuasion knowledge’ (Boerman, van Reijmersdal, & Neijens, 2012, p. 1049). According to Nelson and Harm (2012), high persuasion knowledge does not necessarily lead to negative attitudes, as long as the native advertisement is perceived as non-intrusive. Consumers who believe that native advertising is non-intrusive demonstrate a more positive attitude towards the native advertisement (Lee, Kim & Ham, 2016). However, Evans and Park (2015) mention that advertising recognition directly leads to the activation of persuasion knowledge. As soon as the ‘change of meaning’ has occurred, strategies designed to defend against the persuasive message are activated. This might influence how consumers perceive and respond to the advertisement (Friestad & Wright, 1994).

2.5.2 The heuristic systematic model

According to Darke and Ritchie (2007), the HSM describes the processes of advertising evaluation. When consumers are exposed to a native advertisement which they experience as misleading, it might influence perception and credibility towards native advertising in general. The HSM suggests that when people recognize ads and are confronted with persuasive messages, their defence systems will be activated. This will produce a negative bias in the response to those advertising messages (Darke & Ritchie, 2007). Boerman, van Reijmersdal and Neijens (2015) and Evans and Park (2015) also state that the recognition of advertising activates protective mechanisms that negatively influence attitudes towards the advertisement context.

2.5.3 Reactance theory

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12 their threatened freedom (Kim, Levine & Allen, 2017). Furthermore, perceptions of persuasion lead to less favourable attitudes in the reactance theory (Robertson & Rossiter, 1974). Reactance is relevant for native advertising, since native ads are believed to interrupt consumers’ website use (Li, Edwards & Lee, 2002; Youn & Kim, 2019b).

The PKT, the HSM and the reactance theory all argue that the recognition of a persuasive message (in this case, the native advertisement) leads to a negative evaluation of the message. Therefore, the hypothesis is the following:

H3: Ad recognition has a negative effect on ad attitude.

2.6 Ad credibility

Ad credibility is ‘the extent to which the consumer perceives claims made about the brand in the ad to be truthful and believable’ (MacKenzie & Lutz, 989, p. 51). Since native advertising utilizes the credibility of the content publisher (Wojdynski & Golan, 2016), and offline subtle ads are perceived as more credible than general advertising (van Reijmersdal et al., 2005), it is expected that digital native advertising also has a higher ad credibility then regular advertising. This aligns with Friestad and Wright (1994), who state that the editorial content of the publisher is evaluated as more trustworthy than pure advertising content. However, Moore and Rodgers (2005) indicate that internet advertising exposure leads to lower credibility than advertising on traditional media. As mentioned above, incongruent native advertising is more likely to be recognized as advertisement, which evokes negative judgements of the advertisement and thus undermines its credibility (Darke & Ritchie, 2007). Kim and Choi (2012) confirm that ad credibility is enhanced when the advertisement is congruent with the content of the website where the advertisement is placed. Therefore, it is likely that congruent context also has a positive effect on the ad credibility of digital native advertising, which results in the following hypothesis:

H4: Thematic congruence has a positive effect on ad credibility.

Petty and Cacioppo (1986) demonstrate that persuasive messages which are perceived as more credible are evaluated with a higher ad attitude. MacKenzie and Lutz (1989), Cotte, Coulter and Moore (2005) and Tsang, Ho and Ling (2004) also confirm in their research that ad credibility has a positive influence on ad attitude. Furthermore, Jin and Villegas (2007) mention that ad credibility is important in defining customer ad attitude. No evidence exists that this differs for digital native advertisement. Thus, the hypothesis is:

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13 According to Krouwer and Poels (2017), disclosure recognition does not influence native ad credibility. This conflicts with Boerman, van Reijmersdal and Nijens (2012) and Wojdynski (2016a), who suggest that it does exert a negative influence because people do not believe the claims when they recognize a commercial intent. This aligns with research of Cotte, Coulter and Moore (2005) and Wojdynski and Evans (2015) who also identify a negative relation between perceptions of ad recognition and perceived ad credibility. Hence, it is expected that ad recognition in digital native advertising also has a negative effect on ad credibility.

H6: Ad recognition has a negative effect on ad credibility.

This study posits that ad recognition and ad credibility affects ad attitude. Therefore, a serial mediation, from congruency via ad recognition and ad credibility towards ad attitude is predicted. Congruency is likely to affect ad recognition (Sujan, Bettman & Sujan, 1986; Childers, Heckler & Houston, 1986; Moore, Heckler & Childers, 1992; Stammerjohan & Coulter, 2005), which is the basis of the PKT, the HSM and the reactance theory. Ad attitude is explained by ad recognition (Friestad & Wright, 1994; Darke & Ritchie, 2007; Brehm, 1966). Furthermore, ad credibility also affects ad attitude (Choi & Rifon, 2002; Jin & Villegas, 2007). This mediating effect is also suggested by Choi and Rifon (2002). Moreover, ad credibility is influenced by congruency (Darke & Ritchie, 2007; Kim & Choi, 2012) and by ad recognition (Boerman, van Reijmersdal & Nijens, 2012; Wojdynski, 2016a). Although the serial mediation as mentioned above is not studied before, combining the different theories makes it very likely. Therefore, this study hypothesizes the mediating effects of ad recognition and ad credibility on ad attitude.

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3. Methodology

3.1 Research design

To study the effect of thematic (in)congruence, a between subject experimental design with two condition was implemented. One condition showed a thematically congruent native ad (Figures 3.1a and 3.1b), and the other condition showed a thematically incongruent ad (Figures 3.2a and 3.2b). It was crucial that the context was also shown to respondents, since context is key in thematically incongruent advertising. Furthermore, the content of the ad must also be read. Therefore, respondents were shown a video1 wherein first, the context of the website was shown, followed by the native ad. It was edited in

such a manner to mimic the real website.

For the experiment, the context of the Dutch website natuurmonumenten.nl was used. Natuurmonumenten is an association which protects nature reserves in the Netherlands. Their website provides visitors information about nature, activities in nature reserves and other nature-related information (Natuurmonumenten, 2019). The ‘Nationale Postcodeloterij’ currently has a native advertisement on the website of Natuurmonumenten. This existing native advertisement was used as the thematic congruent condition. For the incongruent condition, an ad about fuel (which is contradictory to what is good for nature) from Shell was provided. This native ad is a current ad on the website of TopGear2, which involves cars.

1 To see the video’s, please go to the following links:

- Congruent condition: https://marktbakker.com/wp-content/uploads/2019/10/Thesis-video-Iris-Postcode-Loterij_1.mp4.mp4

- Incongruent condition: https://marktbakker.com/wp-content/uploads/2019/11/Iris-thesis-video-conditie-Shell.mp4

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Figure 3.1a: The thematically congruent condition (the current native ad)

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Figure 3.2a: The thematically incongruent condition

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17 3.2 Data collection

The survey was distributed online in the network of the researcher via social media. People in the network were asked to distribute it within their own networks as well. In this manner, a snowball effect was created. To encourage people to fill in the survey, an incentive, a bol.com coupon with a value of €20, was raffled among the respondents. People could fill in their mail addresses at the end of the survey for a chance to win the coupon. After data collection was complete, the winner received an email, and the coupon has been sent to that person.

The survey was distributed in the Netherlands; therefore, the survey language was Dutch. Using the native language of respondents leads to less biased results, since no language barrier exists. If English had been used, only Dutch people who speak English well would have participated.

The survey received a total of 216 responses. However, 25 respondents failed the attention check (see section 3.3), and therefore, these observations were removed from the dataset. After being cleaned, the dataset contained 191 observations. The age of participants ranged from 16 to 78. The mean age was 35.01, and the median was 31. 69.6% were female, 29.3% were male and 1% were ‘other’.

3.3 Procedure The survey

The survey began with an introduction stating that it would take around four minutes to finish the survey and that it was fully anonymous. On the next page, the video was shown. The system randomly showed either condition A or B, which refers to the thematically congruent or incongruent advertisements. The description informed respondents that it was necessary to watch the entire video (which was one minute long) carefully and that they needed to click on the squared sign in the lower left corner so that the video was shown in full screen mode. This made it easier to read the text of the native ad and see the thematically (in)congruent context.

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18 also stated that Natuurmonumenten was not involved in this research and that their website was simply used to create context.

3.4 Measurements

Table 3.1 outlines the measurement scale used for the constructs; all are seven-point scales and consist of multiple items. To reduce the dimensions, a factor analysis was conducted with 11 items. Three requirements should be met to achieve a reliable factor analysis (Malhotra, 2009). First, the Kaiser-Meyer-Olkin (KMO) score should be higher than or equal to 0.5 (Hair et al., 2014). In this case, it was 0.833, which is above the threshold. Furthermore, the Bartlett test of sphericity was significant (p=0.00), meaning that items were not uncorrelated. Finally, all communalities were above the minimum of 0.4. The factor analysis results in four factors. These factors had eigenvalues above 1 and explain at least 5% of the variance. The VARIMAX rotation was used to determine the factor loadings. The loading per item is outlined in table 3.1. For the dependent variable ad attitude, a separate factor analysis was used. This analysis contained three items. The KMO was 0.747 and therefore above the minimum of 0.5. The Bartlett test of sphericity was significant, and all communalities were above 0.4. The factor analyses determined that one factor remained. The loading is presented in Table 3.1.

To measure the reliability and consistency of these scales, the Cronbach Alpha was analysed. According to Malhotra (2009), this figure should be higher than the threshold of 0.6. Since the scores ranged from 0.636 to 0.937 (as seen in Table 3.1), all scales were deemed reliable.

Table 3.1: construct measurements

Construct Source Items Factor

loadings

Cronbach Alpha

Ad recognition Krouwer and Poels (2017)

The article is commercial The article is provided by an advertiser

0.833 0.824

0.844

Ad credibility MacKenzie and Lutz (1989)

The article is convincing/ unconvincing

The article is believable/ unbelievable

The article is biased /unbiased

0.668 0.669 0.687

0.801

Ad attitude MacKenzie and Lutz (1989)

The article is good/bad

The article is pleasant/unpleasant The article is favourable/

unfavourable 0.908 0.897 0.917 0.892 Brand familiarity

Kent and Allen (1994), Machleid, Allen and

Madden (1993)

I am familiar with the brand I know the brand

I have had an experience with the brand (for example by searching info, having contact or via a purchase)

0.771 0.810 0.670

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19 Context evaluation De Pelsmacker, Geuens and Anckaert (2002)

The website of Natuurmonumenten is interesting

The website of Natuurmonumenten is boring (R)

I would like to see the website of Natuurmonumenten again 0.805 0.787 0.804 0.777 Congruency (manipulation check) Moorman,

Neijens and Smit (2002), Speed and Thompson (2000)

The ‘partner’ article fits on the website of Natuurmonumenten There is a logical connection between the website of

Natuurmonumenten and ‘partner’ article.

The brand fits with Natuurmonumenten The image of the brand and Natuurmonumenten fit with each other

The brand and Natuurmonumenten stand for similar things

0.894 0.890 0.928 0.915 0.842 0.937 3.5 Manipulation check Pre-test

To check whether the conditions significantly differed, a pre-test was conducted. This test had 42 participants. The pre-test began with the video (of one of the randomly assigned conditions), followed by a multi-item scale which measured congruency (see table 3.1). The Cronbach Alpha was 0.962, which validated the scale. The result of the independent t-test showed that the conditions were significantly different (p = 0.006), where Shell was perceived as incongruent, and de Postcode Loterij as congruent.

Actual survey

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20 3.6 Data analysis

To analyse the hypotheses, multiple models were used. Models 1, 2 and 4 were ANCOVA analyses. Models 3, 5 and 6 were regression analyses. The mediating relation were tested by both the Baron and Kenny method (Model 7) and Hayes method (Model 8). Before conducting the analyses, the effects of the control variables were tested. Results showed no significant effect of gender, age or brand familiarity (p = >0.05). Context evaluation was found to be significant (p = 0.00), and so the variable context evaluation was considered in all further analysis. The various models are found in table 3.2 and thus are all controlled for context evaluation.

Table 3.2: Data analyse models

Model Explanation

Model 1 (H1)

AA = β0 + β1C + ε AA = Ad attitude

C = Congruency

Dummy coded (0 is incongruent condition Shell and 1 is congruent condition Postcode Loterij) AR = Ad Recognition AC = Ad Credibility ε = Error Term Model 2 (H2) AR = β0 + β1C + ε Model 3 (H3) AA = β0 + β1AR + ε Model 4 (H4) AC = β0 + β1C + ε Model 5 (H5) AA = β0 + β1AC + ε Model 6 (H6) AC = β0 + β1AR + ε

Model 7 (H7) Baron and Kenny

7.1: Congruency to ad attitude via ad recognition 1) c: AA = β0 + β1C + ε

2) a: AR = β0 + β1C + ε

3) b: AA = β0 + β2AR + ε

4) c’: AA = β0 + β1C + β2AR + ε

7.2: Congruency to ad attitude via ad credibility 1) c: AA = β0 + β1C + ε

2) a: AC = β0 + β1C + ε

3)b: AA = β0 + β2AC + ε

4) c’: AA = β0 + β1C + β2AC + ε

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21 1) c: AC = β0 + β1C + ε

2) a: AR = β0 + β1C + ε

3) b: AC = β0 + β2AR + ε

3) c’: AC = β0 + β1C + β2AR + ε

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4. Results

The data was tested for normality. All variables showed significant results on the Shapiro-Wilk test, which implied that a normal distribution cannot be assumed. However, the sample was large enough, and therefore significant results can be obtained (Ghasemi & Zahediasl, 2012). Furthermore, the data was tested for multicollinearity via the VIF score and tolerance. The VIF score need to be below 10 to have no multicollinearity (Malhotra, 2009). Since all VIF scores were below 2, this indicated no multicollinearity. Furthermore, all tolerance was above 0.88. These high tolerance scores implied no (high) degree of multicollinearity (Hair et al., 2014).

4.1 Hypothesis 1

An ANCOVA test was conducted to determine the effect of congruency on ad attitude. The Levene’s test of equality of variances is not significant (p = >0.05), and therefore equal variances are assumed. Table 4.1 demonstrates that the independent variable congruency and the control variable context evaluation are both significant. The negative beta of the incongruent condition implies that ad attitude is significantly lower in the incongruent condition. This is also visible in the difference in means; the congruent condition has a higher mean. Therefore H1, which states that congruency would have a positive effect on ad attitude, is accepted.

Table 4.1: ANCOVA results Model 1

Source SS Df Mean MS F B Sig.

Corrected Model 45.615a 2 22.808 14.632 3.518 .000 Intercept 197.712 1 197.712 126.839 .000 Context evaluation 36.292 1 36.292 23.282 .324 .000 Congruency (condition = Shell) 11.653 1 4.3810 11.653 7.476 -.495 .007 Congruency (condition = Postcode Loterij) 4.8233 0 Error 293.048 188 1.559 Total 4402.333 191 Corrected Total 338.663 190

a. R Squared = .135 (Adjusted R Squared = .125) b. DV = Ad attitude

4.2 Hypothesis 2

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23 a marginally significant negative effect on ad recognition. The difference in means also shows that the congruent condition is less recognized as an ad. Furthermore, results show (Table 4.2) that the control variable context evaluation has a significant negative effect on ad recognition. In summary, H2 is marginally accepted.

Table 4.2: ANCOVA results Model 2

Source SS Df Mean MS F B Sig.

Corrected Model 20.989a 2 10.494 5.179 .006 Intercept 647.031 1 647.031 319.318 5.716 .000 Context evaluation 14.528 1 14.528 7.170 -.205 .008 Congruency (condition = Shell) 7.665 1 5.2582 7.665 3.783 .402 .053 Congruency (condition = Postcode Loterij) 4.8900 0 Error 380.943 188 2.026 Total 5302.750 191 Corrected Total 401.932 190

a. R Squared = .052 (Adjusted R Squared = .042) b. DV = Ad recognition

4.3 Hypothesis 3

To analyse the effect of ad recognition on ad attitude, a regression analysis was performed. The model is significant (p = 0.000). As Table 4.4 reveals, ad recognition has a significant negative effect on ad attitude (β = -0.280, p = 0.000). Furthermore, the control variable context evaluation has a significant positive effect on ad attitude (β = 0.258, p = 0.000). Since it can be concluded that ad recognition has a negative effect on ad attitude, H3 is accepted.

4.4 Hypothesis 4

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24 Table 4.3: ANCOVA results Model 4

Source SS Df Mean MS F B Sig.

Corrected Model 55.610a 2 27.805 17.347 .000 Intercept 146.487 1 146.487 91.389 3.104 .000 Context evaluation 42.727 1 42.727 26.656 .352 .000 Congruency (condition = Shell) 15.837 1 4.0000 15.837 9.880 -.578 .002 Congruency (condition = Postcode Loterij) 4.5200 0 Error 301.344 188 1.603 Total 3843.111 191 Corrected Total 356.954 190

a. R Squared = .156 (Adjusted R Squared = .147) b. DV = Ad credibility

4.5 Hypothesis 5

A linear regression is used to determine the effect of ad credibility on ad attitude. This significant model (p = 0.000) shows that ad credibility has a significant positive effect on ad attitude (β = 0.548, p = 0.000). Moreover, the control variable context evaluation also has a significant effect on ad attitude (β = 0.127, p = 0.036). Hypothesis 5, which stated that ad credibility has a positive effect on ad attitude, is accepted. 4.6 Hypothesis 6

To determine the effect of ad recognition on ad credibility, a linear regression is performed showing a significant effect of the model ad recognition on ad credibility (p = 0.000). As revealed in table 4.4, ad recognition has a negative effect attitude (β = -0.310, p = 0.000), and context evaluation has a positive effect attitude (β = 0.278, p = 0.000) on ad credibility. Therefore H6, which hypothesized a negative effect of ad recognition on ad credibility, is accepted.

Table 4.4: The effects of ad recognition and ad credibility Hypothesis (Effect) Model 3 DV: Ad attitude Model 5 DV: Ad attitude Model 6 DV: Ad credibility Main Variables Ad recognition - -.280*** X -.310*** Ad credibility + x .548*** x Control Variables Context evaluation + .258*** .127** .278*** R2 (Adjusted R2) .190 (.182) .382 (.375) .216 (.208) R2 change .190 .382 .216 F-value 22.102*** 58.097*** 25.882***

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25 4.7 Mediating effects H7

To test the mediating effect, two methods are used. The Baron and Kenny method (Baron & Kenny, 1986) and the Hayes method (Hayes, 2013).

4.7.1 Baron and Kenny mediation

Baron and Kenny method consist of separate regressions; the first regression determines the c, the second the a, the third the b and the fourth the c’. Every step of the Baron and Kenny method consist of a separate regression. The first step states that the first regression determining ‘c’ should be significant, the second step requires a significant ‘a’ path. For the third step the ‘b’ path needs to be significant and the fourth step requires a significant c’ path. If all steps are met, it can be classified as full mediation. If only the first three steps are met, partial mediation exists (Baron & Kenny, 1986).

Since this study has a model with two mediating variables, multiple mediating relationships exist. Therefore, the Baron and Kenny analyses is conducted four times. This means model 7 consist of 7.1, 7.2, 7.3 and 7.4.

1. The effect of congruency on ad attitude mediated by ad recognition

Figure 4.1: visualisation of Model 7.1

Table 4.5: Model 7.1

Testing Paths B SE (B) 95% Cr Β Sig.

Path c: dv = ad attitude

R2 = 0.141, f = 15.459, p = 0.000

IV= thematic congruence 0.348 0.181 -0.009, 0.706 0.131 0.056 Control variable = context

evaluation

0.538 0.108 0.325, 0.751 0.339 0.000

Path a: dv = ad recognition R2 = 0.035, f = 3.400, p = 0.035

IV = thematic congruence -0.326 0.209 -0.739, 0.086 -0.112 0.120 Control variable = context

evaluation

-0.239 0.125 -0.484, 0.007 -0.138 0.057 Path b: dv = ad attitude

R2 = 0.216, f = 25.962, p = 0.000

IV = ad recognition -0.282 0.060 -0.400, -0.163 -0.307 0.000 Control variable = context

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26 Control variable = context

evaluation

0.473 0.104 0.269, 0.678 0.298 0.000

Total (a*b) 0.034

As can be seen in table 4.5, the first paths (c and a) are not significant. Therefore, the first two steps of the Baron and Kenny method are not met, and no mediation effect is classified.

2. The effect of congruency on ad attitude mediated by ad credibility

Figure 4.2: visualisation of Model 7.2

Table 4.6: Model 7.2

Testing Paths B SE (B) 95% Cr β Sig.

Path c: dv = ad attitude

R2 = 0.141, f = 15.459, p = 0.000

IV= thematic congruence 0.348 0.181 -0.009, 0.706 0.131 0.056 Control variable = context

evaluation

0.538 0.108 0.325, 0.751 0.339 0.000

Path a: dv = ad credibility R2 = 0.185, f = 21.268, p = 0.000

IV = thematic congruence 0.409 0.181 0.052, 0.767 0.150 0.025 Control variable = context

evaluation

0.631 0.108 0.418, 0.844 0.387 0.000

Path b: dv = ad attitude

R2 = 0.381, f = 57.929, p = 0.000

IV = ad credibility 0.539 0.061 0.419, 0.606 0.554 0.000

Control variable = context evaluation 0.206 0.100 0.009, 0.402 0.129 0.040 Path c’: dv = ad attitude R2 = 0.384, f = 38.792, p = 0.000 IV = ad credibility -0.531 0.062 0.409, 0.653 0.545 0.000 IV = thematic congruence 0.131 0.156 -0.177, 0.438 0.049 0.403 Control variable = context

evaluation

0.203 0.100 0.006, 0.400 0.128 0.043

Total (a*b) 0.083

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27 3. The effect of congruency on ad credibility mediated by ad recognition

Figure 4.3: visualisation of model 7.3 Figure 4.2: visualisation of Model 7.3

Table 4.7: Model 7.3

Testing Paths B SE (B) 95% Cr β Sig.

Path c: dv = ad credibility R2 = 0.185, f = 21.268, p = 0.000

IV = thematic congruence 0.409 0.181 0.052, 0.767 0.150 0.025 Control variable = context

evaluation

0.631 0.108 0.418, 0.844 0.387 0.000

Path a: dv = ad recognition R2 = 0.035, f = 3.400, p = 0.035

IV = thematic congruence -0.326 0.209 -0.739, 0.086 -0.112 0.120 Control variable = context

evaluation

-0.239 0.125 -0.484, 0.007 -0.138 0.057 Path b: dv = ad credibility

R2 = 0.266, f = 34.064, p = 0.000

IV = ad recognition -0.307 0.060 -0.424, -0.189 -0.326 0.000 Control variable = context

evaluation 0.577 0.103 0.374, 0.781 0.354 0.000 Path c’: dv = ad credibility R2 = 0.279, f = 24.095, p = 0.000 IV = ad recognition -0.295 0.060 -0.412, -0.177 -0.313 0.000 IV = thematic congruence 0.313 0.172 -0.026, 0.653 0.114 0.070 Control variable = context

evaluation

0.561 0.103 0.356, 0.764 0.344 0.000

Total (a*b) 0.037

Table 4.7 shows that the second requirement (significant path a) of Baron and Kenny (1986) is not met. Therefore, there is no mediation in model 7.3.

4. The effect of ad recognition on ad attitude mediated by ad credibility

Figure 4.4: visualisation of model 7.4

Table 4.8: model 7.4

Testing Paths B SE (B) 95% Cr β Sig.

Path c: dv = ad attitude

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28 IV = ad recognition -0.282 0.060 -0.400, -0.163 -0.307 0.000 Control variable = context

evaluation

0.487 0.104 0.282, 0.691 0.307 0.000

Path a: dv = credibility

R2 = 0.266, f = 34.064, p = 0.000

IV = ad recognition -0.307 0.060 -0.424, -0.189 -0.326 0.000 Control variable = context

evaluation

0.577 0.103 0.374, 0.781 0.354 0.000

Path b: dv = ad attitude

R2 = 0.381, f = 57.929, p = 0.000

IV = ad credibility 0.539 0.061 0.419, 0.606 0.554 0.000

Control variable = context evaluation 0.206 0.100 0.009, 0.402 0.129 0.040 Path c’: dv = ad attitude R2 = 0.399, f = 41.410, p = 0.000 IV = ad recognition -0.133 0.056 -0.243, -0.022 -0.144 0.019 IV = ad credibility 0.486 0.064 0.359, 0.613 0.499 0.000

Control variable = context evaluation

0.206 0.098 0.012, 0.400 0.130 0.037

Total (a*b) -0.180

As can be seen in table 4.8, all four steps of Baron and Kenny (1986) are met since all four paths have a significant effect. Therefore, model 7.4 consist of full mediation.

Conclusion: according to the Baron and Kenny method, only Model 7.2 and Model 7.4 consist of mediating effects. Both uses ad credibility as mediator. Therefore, it could be concluded that ad credibility has a mediating effect. Further, this method shows that ad recognition has no mediating effect. According to this method, H7 is rejected.

4.7.2 Hayes

Hayes model 6 is used for determining the full theory (with double mediation) which includes all variables of the conceptual model and the control variable context evaluation.

Figure 4.5: the coefficients according to Hayes model 6.

Thematic

congruence

Ad recognition

Ad attitude

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29 As can be seen in figure 4.5, the Hayes model also determined the individual effects of the first 6 hypotheses. For H1, the Hayes model shows no significant direct effect of congruency on ad attitude (p = >0.05). This is in contrast with the ANCOVA which shows a significant effect of congruency on attitude, but in line with the regression used for the Baron and Kenny method. For the other hypotheses (2-6) the effects are still the same. So, in the full theory the effects (from hypothesis 2-6) are still significant.

Despite that the direct effect is not significant, the total effect of congruency on ad attitude is significant (β = 0.4955, p = 0.007). The control variable context evaluation also has a significant effect (β = 0.3241, p = 0.000) on ad attitude. To determine the mediating effects, it is important to look at the indirect effects in the Hayes model. All mediating effects are significant, since the values of the BootLLCI and the BootULCI do not cross 0. In table 4.9 below, the exact indirect effects are shown. The mediator ad credibility has the strongest effect, but all indirect effects are significant. Therefore, according to the Hayes model, hypothesis 7 is accepted.

Table 4.9: Overview of the effects of the Hayes model

Effect BootLLCI BootULCI

Total effect 0.4955 0.1380 0.8529

Total direct effect 0.1649 -0.1426 0.4723

Total indirect effect 0.3306 0.1317 0.5641

Indirect effect 1:

Congruency → ad recognition → ad attitude

0.0486 0.0044 0.1639

Indirect effect 2:

Congruency → ad recognition → ad credibility → ad attitude

0.0563 0.0048 0.1407

Indirect effect 3:

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30

5. Discussion

This study provides insight into the effects of thematic congruence in digital native advertising on ad recognition, ad credibility and ad attitude among the Dutch people. The results shed light on how these effects manifest for digital native advertising and demonstrate a mediating relationship.

5.1 Hypotheses

Table 5.1: Overview of the results

Hypothesis Result

H1: Thematic congruence has a positive effect on ad attitude. Denied H2: Thematic congruence has a negative effect on the recognition of the

persuasive message (advertising).

Accepted* H3: Ad recognition has a negative effect on ad attitude Accepted*** H4: Thematic congruence has a positive effect on ad credibility. Accepted** H5: Ad credibility has a positive effect on ad attitude. Accepted*** H6: Ad recognition has a negative effect on ad credibility. Accepted*** H7: Ad attitude is mediated by ad recognition and ad credibility Accepted** * p = <0.10 ** p = <0.05 *** p = <0.01

Direct effects

Thematic congruence does not exert a positive effect on ad attitude. Although the ANCOVA analysis shows a significant positive effect of congruency on ad attitude, the Hayes model does not. So, although in a separate analysis, congruence is found to influence ad attitude, when testing the full model, this effect is absorbed by the mediators. This insignificant result does not align with previous research. Moorman, Neijens and Smit (2002), Dahlén (2005), Jeong and King (2010), Kononova and Yan (2015) and Harms, Bijmolt and Hoekstra (2017) all mention the significant positive effects of congruent advertising.

Thematical congruence has a negative effect on the recognition of a persuasive message. Although the effect is only marginally significant, this still suggests that congruency leads to decreased ad recognition. This contrasts with Kwon et al. (2019), who state that advertising is more recognized in a congruent media context. However, this aligns with other studies, such as Sujan, Bettman and Sujan (1986), Childers, Heckler and Houston (1986), Heckler and Childers (1992) and Moore, Stammerjohan and Coulter (2005), which all mention that incongruency leads to more persuasive knowledge. Thematically incongruent native advertising seeks attention and is therefore more visible, and this visibility leads to increased ad recognition (New, 1991; Tutaj & van Reijmersdal, 2012). This study demonstrates that this is also the case for digital native advertising.

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31 Nelson & Das, 2015; Friestad & Wright, 1994). Furthermore, the HSM states that ad recognition activates the defence system, which produces negative response towards the ad (Darke & Ritchie, 2007). In addition, persuasive messages lead to a perceived loss of freedom (Youn & Kim, 2019b). Individuals react in such a manner so as to restore their freedom again (Brehm & Brehm, 1981; Quick & Kim, 2009), which means that people change or resist attitude in the opposite direction as the persuasive message intended (Kim, Levine & Allen, 2017). Since all of these theories state that ad recognition leads to negative evaluations, the results of this research align with expectations.

This research has shown that thematic congruence has a positive effect on ad credibility. This aligns with previous research by Darke and Ritchie (2007) and Kim and Choi (2012), who state that thematically congruent native advertising is more credible than incongruent advertising. This occurs because native advertising uses the credibility of the content publisher (Wojdynski and Golan, 2016), which makes it more trustworthy than pure advertising content (Friestad & Wright, 1994). Moreover, van Reijmersdal et al. (2005) mention that subtle offline ads are perceived as more credible than general advertising. This seems to hold true for digital native advertising as well.

Furthermore, this study confirms findings from previous research by Petty and Cacioppo (1986), MacKenzie and Lutz (1989), Cotte, Coulter and Moore (2005) and Tsang, Ho and Ling (2004), who all have shown that ad credibility has a positive effect on ad attitude. Ad credibility is important in defining ad attitude (Jin & Villegas, 2007), and it turns out that this effect is the same for digital native advertising.

Moreover, ad recognition has a negative effect on ad credibility. This aligns with expectations, since the literature suggests this effect. Cotte, Coulter and Moore (2005), Boerman, van Reijmersdal and Nijens (2012), Wojdynski and Evans (2015) and Wojdynski (2016a) all identify this negative effect of the recognition of a persuasive message on ad credibility. Only Krouwer and Poels (2017) present different results. They state that recognition does not influence ad credibility, which could be explained by their focus on recognition of the disclosure of native advertising (Krouwer & Poels, 2017). However, this study confirms that ad recognition also has a negative effect on ad credibility in digital native advertising.

Indirect mediating effects

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32 Sujan, Bettman and Sujan (1986), Childers, Heckler and Houston (1986), Heckler and Childers (1992) and Moore, Stammerjohan and Coulter (2005), congruency influences ad recognition. Various ad recognition theories explain ad attitude (Brehm, 1966; Friestad & Wright, 1994; Darke & Ritchie, 2007). This study demonstrates that these findings also hold true for digital native advertising. Furthermore, this study has demonstrated the significant mediating effect of ad credibility. This confirms the findings of Choi and Rifon (2002), who state that ad credibility mediates ad attitude in banner advertising. This is also true for digital native advertising. Lastly, this study has shown that the serial moderation is also significant. This is evidence for the relation from congruency between ad recognition and ad credibility to ad attitude. Although this specific path has not been previously studied, it met the expectation. Combining different literature and research led to evidence for a serial mediation effect. Although all mediating effects are significant, the amount of effect differs. Ad credibility seems to be the strongest factor, since the single mediation from congruency via ad credibility to ad attitude has the strongest effect (0.2257). This can be seen in table 4.9. Ad credibility was also the significant mediator from the Baron and Kenny method.

5.2 Managerial implications

This study provides insight in the effectiveness of native ads in a publisher context. Native ads which are congruent with the publisher’s context are more effective, since they elicit a more positive ad attitude. Moreover, they are less likely to be recognized as advertisements. Congruent ads are also perceived as more credible. With this information, publishers can receive more income from native advertising. They can select the ads which are congruent with their context, so the ads will be more effective; the more effective the ads are, the more publishers can charge.

5.3 Limitations and recommendations

This study has some limitations. During the survey, respondents viewed a video. Before the video, a text stated that they needed to watch the entire video carefully. However, people filled in the survey on their own, and it therefore cannot be confirmed whether everyone paid attention. Perhaps not everyone watched the entire video or people might be distracted while watching the video.

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33 Furthermore, the size of the sample (191) is not large enough to generalize these findings for the entire Dutch population. To find generalizable results, repeating the research with a larger sample is recommended. According to several ‘sample calculators’ the sample must consist 384 to get generalizable results with a 95% confidence level (Checkmarket, n.d.; AllesoverMarktonderzoek, n.d.).

This study only focuses on incongruent or congruent advertising, where there could be other intermediate levels of congruency. It is interesting for further research to measure the effects of ads with different levels of congruency, from very congruent, to partly congruent to very incongruent. For example; if this study had used a beauty advertisement for the incongruent condition it could be perceived as more incongruent than the incongruent condition in this study. With those results, the optimal ‘level’ of congruency could be determined and applied to native advertising. Different levels of congruency could also be explaining the contradictory findings from different research of the effectiveness of thematic (in)congruence which are mentioned in the literature review.

Another limitation is that the effect of congruency in native advertising is tested in only one context, namely, Natuurmonumenten.nl. De Pelsmacker, Geuens and Anckaert (2002) mention that context is key in native advertising. Therefore, a recommendation for further research is to test this effect also for other contexts/publishers to see whether these results are also valid for other publishers.

5.4 Conclusion

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34

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