SPRING 2018 VOLUME 52, NUMBER 1 115

BARTOSZ W. WOJDYNSKI, NATHANIEL J. EVANS, AND

MARIEA GRUBBS HOY
Measuring Sponsorship Transparency in the Age of
Native Advertising
As advertisers continue to develop new formats of online content that
blurs the line between advertising and news or entertainment, the
need to understand how consumers process covert advertising grows.
While regulators and industry practitioners agree that transparency
is paramount to preventing consumer deception, there exists no
established way of determining the extent to which a given message
transparently conveys to consumers that is a paid advertisement.
The current study makes the case for, develops, and validates a scale
to measure sponsorship transparency. Following traditional scale
development methods, the study generates a pool of items based on
consumer and expert input, reduces the number of items based on
empirical research, and evaluates scale validity and reliability using a
diverse national sample.

The Federal Trade Commission (FTC) considers false advertising as that

which is “misleading in a material respect.” The 1983 FTC Policy State-
ment on Deception is based on the following three elements: (1) There must
be a representation, omission, or practice that is likely to mislead the con-
sumer; (2) the act or practice must be considered from the perspective of
the reasonable consumer; and (3) the representation, omission, or practice
must be material. Given that advertising is a “paid form of persuasive com-
munication that uses mass and interactive media to reach broad audiences
in order to connect an identified sponsor with buyers,” (Moriarty et al.
2015, 6, emphasis added), tactics and practices that hinder consumers’
ability to identify advertising and its sponsor as such clearly fall within
the category of deceptive. The FTC directly addressed advertising that is
deceptive in format in its December 2015 Enforcement Policy Statement
on Deceptively Formatted Advertisements:
Knowing the source of an advertisement or promotional message typically affects
the weight of credibility consumers give it. Such knowledge also may influence

Bartosz W. Wojdynski (bartw@uga.edu) and Nathaniel J. Evans (nevans4@uga.edu) are Assistant

Professors, both at the Grady College of Journalism and Mass Communication, University of Georgia.
Mariea Grubbs Hoy (mhoy@utk.edu) is a Professor at the College of Communication and Information,
University of Tennessee.

The Journal of Consumer Affairs, Spring 2018: 115–137

DOI: 10.1111/joca.12144
Copyright 2017 by The American Council on Consumer Interests
116 THE JOURNAL OF CONSUMER AFFAIRS

whether and to what extent consumers choose to interact with content containing
a promotional message (FTC 2015a).

Thus, clear communication of a persuasive message’s sponsor, or spon-

sorship transparency (ST), is foundational to consumer choice and protec-
tion against deceptive advertising.
Communication that blurs the lines between paid for content (i.e.,
advertising) and editorial or entertainment content has raised the concern of
regulators and scholars over the past few decades. Examples of this kind of
communication include host selling during children’s programs in the late
seventies (Hoy et al. 1986), television infomercials in the nineties (Sandler
and Secunda 1993; Singh et al. 2000) to advergames (Evans et al. 2013;
Lee et al. 2012) and more recently, online native advertising (FTC 2013,
2015a; Wojdynski and Evans 2016).
Advergames are custom-made games “structured entirely around a
given brand, which act as de facto ads in themselves. By blending a
brand message with a fun and interactive gaming experience the ideal is
to provide a clear link between the brand and the game, without interfering
with player engagement” (IAB 2010, 9). Advergames are typically free
of charge, available on companies’ websites, easy to play, casual, and
offer quick rewards (Redondo 2012). Examples include Kellogg’s “Loopy
Beach” game, which allows users to collect Froot Loops on a beach
while avoiding crustaceans, and “Dikembe Mutombo’s 4 1∕2 Weeks to
Save the World,” an Old Spice–branded scrolling adventure game full of
pop-culture references (and Old Spice products).
Native advertising is “the practice by which a marketer borrows from
the credibility of a content publisher by presenting paid content in a format
and location that matches the publisher’s original content” (Wojdynski and
Golan 2016, 3). Because online content is highly diverse in its purpose
and presentation format, online native advertising can take many different
forms, including sponsored news articles, sponsored social media posts,
and sponsored links, to name a few. Scholars (Carlson 2015), regulators
(FTC 2013), and even practitioners (Schauster et al. 2016) have expressed
concern about consumers’ ability to identify online native advertising in all
of its permutations, and to consequently apply the same level of scrutiny
to these messages as to other ads. By its nature, native advertising is
presented alongside and intermingled with nonsponsored content on the
same platform, whether it is a “promoted” post for Blue Apron meals
appearing in a user’s Twitter feed, or an in-depth article about a young
ballet dancer published by the New York Times online as a “paid post” by
shoe retailer Cole Haan.
SPRING 2018 VOLUME 52, NUMBER 1 117

Efforts that have examined individuals’ ability to distinguish between

advertising and editorial/entertainment content have predominantly relied
on Friestad and Wright’s (1994) Persuasion Knowledge Model (PKM)
as a theoretical framework. However, Evans and colleagues continue to
question assumptions of the PKM as it applies to adults’ recognition of
advertising in a media environment with an increasingly blurred distinc-
tion between advertising and editorial content that features covert adver-
tising tactics (Evans 2014; Evans and Hoy 2016; Evans and Park 2015;
Evans et al. 2013; Wojdynski and Evans 2016). In a recent review of the
measurement of persuasion knowledge, Ham et al. (2015, 34) noted that
although consumers may be familiar with advertising as a persuasive tactic,
“the component, format, and persuasion tactic details can activate differ-
ent levels of persuasion knowledge.” The evolution of online advertising
to include sponsored content in formats as diverse as blog posts (van Rei-
jmersdal et al. 2016), search engine results (Evans and Park 2016), social
media posts (Boerman and Kruikemeier 2015), and news articles (Wojdyn-
ski and Evans 2016), has created a media landscape in which one can no
longer assume that adults will recognize advertising and its concomitant
persuasion tactics. Experimental research on covert formats, however, has
largely focused on assessing the advertisers’ persuasion intention motive,
thus assuming some level of sponsor transparency. Research focused on
covert marketing usually “measures consumers’ persuasion knowledge
when covertness was disclosed, a covert cue was presented, or a different
sponsorship motive was perceived” (Ham et al. 2015, 35). Efforts to assess
participants’ advertising recognition of the stimuli (i.e., “is this advertis-
ing?”) have generally used a single measure (Boerman et al. 2014, 2015).
In this era of covert advertising, it is becoming increasingly clear that
consumers often struggle to identify advertising for what it is: paid-for
communication with an identifiable sponsor (Boerman et al. 2015; Carl-
son 2015; Wojdynski and Evans 2016). Indeed, sponsor identification is an
inherent component of advertising (Moriarty et al. 2015).
In correspondence with the FTC’s (1970) historical emphasis on infor-
mation disclosure clarity, recent focus has been placed on the need for
increased transparency in covert advertising (FTC 2013; 2015a; Interac-
tive Advertising Bureau 2015; Lieb 2013). While there is unanimity that
being “transparent” or “clear” is paramount to nonmisleading advertising,
and that clearly and conspicuously disclosing sponsorship is imperative
for those engaging in covert advertising, we know little about what con-
sumers perceive as being transparent or clear. One-size-fits-all disclosure
guidelines about how such ads should be labeled are likely to be ineffec-
tive, because of the wide variety of formats that covert advertising and its
118 THE JOURNAL OF CONSUMER AFFAIRS

disclosures may take online (Wojdynski 2016), Having the ability for con-
sumers to contextually and empirically evaluate the ST of a given message
provides a valuable tool to publishers and advertisers seeking to reduce the
deceptiveness of such messages.
Using a multistudy scale development method based on established
practices (cf. Churchill 1979; DeVellis 2012), this article presents the ST
scale, which measures consumers’ perceptions of the ST in an advertis-
ing stimulus. We define ST as the extent to which a sponsored commu-
nication message makes noticeable to the consumer its paid nature and
the identity of the sponsor. We believe ST is conceptually adjacent to
the processes underlying the formation and use of persuasion knowledge
in the PKM. The PKM focuses on how consumers use available infor-
mation to determine the nature of the (advertising) communication, and
suggests that individuals’ propensity for advertising recognition and subse-
quent persuasion knowledge activation is contingent upon their experience
with persuasion attempts in the marketplace. Henceforth, this ability guides
subsequent processing of the communication when the consumer is faced
with unfamiliar or covert persuasion tactics or situations (Evans and Park
2015; Friestad and Wright 1994). An ST scale makes a valuable contri-
bution to the study of persuasion knowledge while measuring a distinct
concept. Specifically, the scale measures consumers’ perceptions of spon-
sorship elements present in an advertising communication. Because there
is variation in the method of sponsorship presentation, presence, and iden-
tification across advertising formats and executions, the use of trait-based
persuasion knowledge measures may prove problematic as more covert
advertising executions start to emerge. Therefore, while ST has applicabil-
ity to traditional advertising formats (e.g., broadcast commercials or print
ads), we envision it as specifically developed for and applicable to current
covert tactics such as advergames and native advertising. The scale is also
designed to be applicable to future covert efforts that may emerge.
We envision several marketing and public policy contributions offered
by an ST scale. First, we believe an ST scale offers practical applications.
As noted by Mary Engle, the FTC’s associate director of advertising prac-
tices, “For us, the concern is whether consumers recognize what they’re
seeing is advertising or not” (Sluis 2015). Because there is variability in
sponsor presence and identification within and across covert advertising
formats, we envision an ST scale as a useful “diagnostic tool” for prac-
titioners, content providers, regulators, and public policymakers to deter-
mine the extent to which sponsorship is transparent in a given advertise-
ment. Second, an ST scale can contribute to persuasion knowledge theory
development and can offer researchers a valuable methodological tool and
SPRING 2018 VOLUME 52, NUMBER 1 119

framework. We believe that an ST construct will offer insight into the

processes underlying the formation of attitudes resulting from covert adver-
tising recognition. Specifically, how might consumers’ perceptions of ST
mitigate or intensify the effect of persuasion knowledge activation on atti-
tudes?
In this article, we first explicate the theoretical basis of ST by contrasting
and comparing it with the established theoretical frameworks of the PKM
(Friestad and Wright 1994) and Schema Theory (Bartlett 1932; Brewer
and Nakamura 1984; Rumelhart 1984). Second, based on three rounds of
formative research, we generate items reflecting the ST construct. Third,
using exploratory factor analysis we test the dimensionality and reliabil-
ity of the items on an initial set of covert and traditional advertisements.
Fourth, using another set of covert and traditional advertisements we con-
firm the dimensionality and reliability of ST scale through a confirmatory
factor analysis. Finally, we offer application of this scale as a potential diag-
nostic tool to assist public policymakers and practitioners in assessment
and compliance with the FTC’s (2015a) Enforcement Policy.

BACKGROUND
PKM and Advertising Recognition
Friestad and Wright’s (1994, 3) PKM posits that persuasion knowledge
enables the consumer to “recognize, analyze, interpret, evaluate, and
remember persuasion attempts and to select and execute coping tactics
believed to be effective and appropriate.” There are several measures and
scales that investigate consumers’ existing persuasion knowledge (i.e.,
advertising recognition). Ham and colleagues (2015) categorized such
measures as either dispositional or situational. Dispositional persuasion
knowledge, which has also been referred to as schemer schema (Wright
1986), reflects the culmination of consumers’ knowledge, skills, abilities,
exposure to, and experience with persuasion and advertising (Ham et al.
2015). Dispositional persuasion knowledge scales have measured adver-
tising skepticism (Obermiller and Spangenberg 1998), knowledge about
persuasion tactics (Boush et al. 1994), everyday persuasion knowledge
(Friestad and Wright 1995), self-confidence of persuasion knowledge
(Bearden et al. 2001), and pricing tactic persuasion knowledge (Hardesty
et al. 2007).
Situational persuasion knowledge, however, refers to the evaluations and
behaviors consumers carry out in response to the recognition of a persua-
sive communication or advertisement (Ham et al. 2015). Before the activa-
tion of situational persuasion knowledge, the consumer must first recognize
120 THE JOURNAL OF CONSUMER AFFAIRS

the communication as advertising in order to form attitudes and under-

take critical processing (Moses and Baldwin 2005). Situational scales have
measured the inference of manipulative intent (Campbell 1995), under-
standing of persuasive and selling intent (Tutaj and Van Reijmersdal 2012),
perceptions of persuasion effectiveness and appropriateness (Friestad and
Wright 1994), and cognitive response strategies (Campbell and Kirmani
2000).
Dispositional and situational persuasion knowledge constructs approach
advertising phenomena using the same theoretical tenet of PKM, which
holds that accumulated exposure to persuasive content over one’s lifetime
influences his or her ability to understand various agents’ persuasive
motives, recognize advertising, activate persuasion knowledge, and form
attitudes regardless of the advertising format (Friestad and Wright 1994;
Ham et al. 2015). While the ability to recognize advertising is based on past
experience (i.e., dispositional persuasion knowledge), the precondition
for attitude formation and critical processing (i.e., situational persuasion
knowledge) is advertising recognition, which is informed by dispositional
persuasion knowledge (Evans and Park 2015; Moses and Baldwin 2005).
Therefore, the conceptual distinction between dispositional and situational
persuasion knowledge constructs is not fully distinct.
For advertising formats in which individuals have little experience with
or exposure to (i.e., native advertising), the relationship between situa-
tional and dispositional persuasion knowledge structures has implications
for advertising recognition as well as evaluative and behavioral outcomes.
Specifically, research finds that dispositional persuasion knowledge struc-
tures may not adequately activate advertising recognition for those exposed
to certain covert advertising formats (Evans 2014; Evans and Park 2015),
which in turn impacts evaluative and behavioral outcomes (Wojdynski and
Evans 2016).

Schema Development and Advertising Recognition

Research on the relationship between schema development and adver-

tising recognition suggests that individuals use existing knowledge
structures as mechanisms for guiding subsequent interpretation, process-
ing, and evaluation of covert advertising attempts (Evans and Park 2015).
These knowledge structures, which are referred to as schemata, “represent
people’s expectations or cognitive models about other people, content,
objects, or messages” (Lewis and Porter 2010, 48). As an “active organi-
zation of past reactions and experiences” (Bartlett 1932, 210) schemata
“function as guides that help us interpret situations [and] allow for the
SPRING 2018 VOLUME 52, NUMBER 1 121

activation of behavioral scripts in situations that call for them” (Evans and
Park 2015, 163).
As Evans and Park (2015) suggest, the activation of advertising-specific
schemata influence subsequent advertising recognition and persuasion
knowledge activation. Like the dispositional nature of persuasion knowl-
edge, individuals’ advertising-specific schemata are also based on expe-
rience with and exposure to various advertising and persuasion attempts.
Therefore, existing advertising schemata may not function as an effective
guide in the context of covert advertising because such schemata may be
based on experience with more traditional forms of advertising (Evans and
Park 2015). However, even when existing advertising-specific schemata
fail to offer guidance in the context of covert advertising, the presence of
highly identifiable sponsor characteristics may supplement an individual’s
ability to interpret, process, and evaluate the communication.
While we acknowledge existing advertising schemata influences the
recognition of advertising and persuasion knowledge activation, we argue
that the dispositional and experiential nature of these concepts may lead
individuals to incorrectly interpret and evaluate covert advertisements for
which they possess little to no experience (Evans and Park 2015). There-
fore, keeping in mind the theoretical tenets of schema theory, perceived
sponsor transparency for a covert advertisement is likely to occur in one
of two ways: (1) one has already developed schemata for that covert ad
or (2) the advertiser decides to explicitly identify itself through a number
of mechanisms (e.g., disclosures). However, it is likely the case that true
ST occurs when individuals already possess schemata specific (or at least
applicable) to the covert advertisement and the advertiser chooses to clearly
identify itself as the sponsor using one or multiple tactics.

ST Construct

Sponsorship transparency (ST) is defined as the extent to which a

sponsored communication message makes noticeable to the consumer
its paid nature and the identity of the sponsor. Unlike PK, ST is not
conceptualized as a trait but rather serves an evaluative function. In this
regard, ST measures consumers’ perceptions of sponsorship elements
present in an advertisement. While ST is distinctly unique from PKM,
it is also conceptually adjacent in two specific ways: First, advertising
recognition, which is based on an individual’s dispositional propensity,
is a necessary antecedent for making judgments regarding perceived ST.
Second, while necessary, advertising recognition is not sufficient by itself
for perceived sponsor transparency.
122 THE JOURNAL OF CONSUMER AFFAIRS

In the absence of advertising recognition, an individual may be less

likely to form perceptions of sponsor transparency compared to situations
where he or she recognizes the communication as an advertisement. How-
ever, we acknowledge that advertising recognition is not the sole determi-
nant for perceived sponsor transparency. For example, even if an individual
recognizes a communication as an ad, the specific features of the com-
munication will affect the degree to which the sponsor is perceived as
identifiable, which will likely impact subsequent attitudes. Henceforth, true
sponsor transparency involves both advertising recognition and sponsor
identification. In other words, based on one’s existing dispositional per-
suasion knowledge, the consumer first perceives that the communication
is paid for by an entity apart from the medium or context to which he or
she is exposed, and then can articulate who/what the sponsoring entity is
based on the degree to which the covert ad makes the sponsor identifiable.
Past research on ST has examined the extent to which companies and
brands disclose their socially responsible practices and efforts (Hustvedt
and Kang 2013) as well as consumers’ long-term trust and loyalty related
outcomes (Middlemiss 2003; Sichtmann 2007; Willmott 2003). To our
knowledge, no research has empirically examined the ST construct in rela-
tion to communication elements thought to subsequently influence con-
sumers’ ability to understand or recognize advertising content. Considering
that the current advertising landscape has increasingly blurred the bound-
aries between entertainment/editorial and commercial content, we believe
that consumers draw mainly upon two sources of information to determine
what constitutes and qualifies as advertising so they then can form attitudes
about the communication. These sources of information are (1) rooted in
experience with and exposure to advertising communications and (2) based
on the information presented in the communication, which is reflected by
the degree of ST.

SCALE DEVELOPMENT PROCESS

Because of the public policy and practical applications of being able to

assess participants’ perceptions of the transparency of a given example of
covert advertising, we sought to develop a scale that could be used to mea-
sure respondents’ perception of ST for a given advertising stimulus. Such
a scale is needed to examine whether assumptions of the PKM about the
relationship between persuasion knowledge activation and evaluations of
the advertiser and ad hold in the domain of covert or deceptive advertising.
Additionally, such a scale can serve as a means of distinguishing between
advertisements with regard to degree to which their paid nature and the
SPRING 2018 VOLUME 52, NUMBER 1 123

identity of their sponsor are conveyed to the viewer. Decisions were made
to focus on an equal-weight scale consisting of statements to be evaluated
on a 7-point Likert scale; such a response format is common within the field
of marketing, and is used in other scales of advertising evaluation, includ-
ing perceived brand integration (Kinard and Hartman 2013), advertising
intrusiveness (Li et al. 2002), and attitudes toward advertising disclosures
(Thomas et al. 2013).

Phase I: Initial Item Generation

We began the scale development process by generating a large pool

of potential scale items, with the aim of testing and reducing the item
pool. Rather than approaching the item-generation process with a spe-
cific taxonomy of components of ST, we sought to incorporate the lan-
guage that advertising consumers, scholars, and practitioners use when
discussing this concept. To examine and identify how consumers viewed
ST, we gathered data in three separate stages of formative research,
all of which focused particularly on transparency in covert advertising
formats.
In the first round, undergraduate research participants in a lab experi-
ment (N = 60) were each asked to provide open-ended evaluations of two
randomly assigned examples of sponsored content, selected from a pool
of six. After being asked to view each content example for as long as it
held their interest, participants were given the following question prompts:
“How clear is it to you that the previous content was paid/advertising?”;
“What, if anything, made it clear that the content was advertising?”; and
“What would you suggest that could make it clearer that the content was
advertising?”
In the second round, US adults (N = 61) were recruited to take part
in a short online evaluation of two examples of advertising chosen from
a pool of three video commercials and three branded advertising games
(“advergames”) using the same three questions above.
In the third round, we solicited open-ended responses to questions via
e-mail from professors in the fields of advertising and marketing (nine
responses received), and from news consumers via Twitter (ten responses
received). The participants provided answers to the following questions:
“How do you know that something is advertising when you see it?” and
“To what standards or goals do you think advertisers should aspire with
regard to making it clear that a particular message or its placement has
been paid for?” The answers generated by all of these questions were used
to inform the generation of items for inclusion in a scale to measure ST.
124 THE JOURNAL OF CONSUMER AFFAIRS

A total of 58 items were generated, including both positively and negatively

worded items.

Phase II: Original Item Evaluation and Testing

Before evaluating the items, some reduction to the item pool was nec-
essary based on several factors. Because the goal was to create a scale that
would be equally effective in evaluating advertising regardless of format,
we first sought to eliminate items that featured wording that might only be
applicable to certain types of advertising. Likewise, because we wanted the
scale to validly assess transparency of covert advertising (as well as more
overt advertising), we eliminated items that inquired about advertising con-
tent that does not apply to all exemplars of covert advertising (e.g., “The
communication featured incentives and/or promotional offers”). Finally, a
few items were removed on the basis of very high redundancy with another
item in the pool, although having some redundancy in the pool was explic-
itly sought (DeVellis 2012).
After revising the initial item pool to 39 items based on redundancy
and content domain applicability, 430 US resident adult participants (mean
age = 28, 42% female) were recruited to complete all 39 items in response
to one of the three examples of advertising. Participants were recruited
via Amazon Mechanical Turk, and 24 participants were removed from the
initial sample of 454 for failing to correctly answer an attention check
question. Of the final sample, 9% had no college education, 30% had some
college education but no completed degree, 44% had completed a college
degree as their highest level of education, and 11% had a graduate degree.
A total of 74% of participants reported their race as White, 10% as Asian
or Asian American, 8% as Latino, and 5% as Black or African American.
The three advertising examples chosen for the item pool reduction
and analysis phase were chosen to represent three popular but potentially
misleading advertising formats, namely a sponsored article, an advergame,
and a video ad. The sponsored article selected was a news article from a
national newspaper promoting a youth mentorship program in which the
sponsoring company’s employees take part as mentors; the sponsorship
was disclosed in two distinct areas of the page. The advergame chosen was
a cartoon space game heavily featuring the sponsoring brand on the title
screen and in the game play. The video commercial featured a well-known
campaign from a personal hygiene brand.
Prior to analysis of the scale data, negatively worded items were
reverse-coded to ensure that higher scores on each item indicated greater,
not lower, transparency. To reduce the item pool, items were initially
SPRING 2018 VOLUME 52, NUMBER 1 125

evaluated by examining several characteristics regarding their fit with the

scale, including corrected item-to-scale-total correlations, pairwise corre-
lations, and individual item impact on scale alpha. Items that correlated
poorly with the corrected scale total or which demonstrated negative cor-
relations with a majority of other items in the pool were deleted.
Factor analysis techniques were used to further analyze the scale and
identify candidate items for deletion. A preliminary exploratory principal
components analysis and scree plot showed evidence for six distinct factors
that combined to explain 59% of the variance in the scale. Subsequent
analyses conducted to yield modification indices used an oblique factor
solution to allow for correlation between factors. Specifically, analyses
used principal axis factoring as an extraction method, with promax rotation.
Based on analysis of the items loading on each factor, we came up
with factor names that conveyed the underlying construct behind each
factor’s variance (in order from greatest to least rotated factor loading:
Brand Presence, Sponsor Clarity, Disclosure Presence, Deceptiveness,
Recognizability as Advertising, and Selling and Persuasive Intent).
The next step in the analysis was to remove additional items that were
a poor fit for the scale factors. We removed several additional items based
on several criteria. Items were removed if (1) they had a loading of .40
or above on more than one factor, (2) did not have a factor loading of at
least .50 on one of the six factors (e.g., Bearden et al. 2001), or (3) had
communality scores of less than .40.
Based on the above procedures, the 39 original items were reduced to 20
(see Table 1 for a list of factors and loadings). The distribution of items to
factors was not balanced: six items loaded primarily on the largest factor,
brand presence (eigenvalue = 5.66), while only two items each loaded on
the two smallest factors, recognizability as advertising (eigenvalue = 1.27)
and selling and persuasive intent (eigenvalue = 1.19).
After discussion of the initial findings with several experts in scale
development, the decision was made to remove the two smallest factors
from the scale. As shown by the low eigenvalue scores above, each of these
2-item factors explained less additional variance in total scale responses
than would be expected of two standalone items. This, in accordance with
other factors, drove the decision to proceed without these two factors. In
the case of Factor 6 (selling and persuasive intent), it was also determined
that this factor was too close to existing measures of persuasion knowledge
(e.g., the six-item persuasion knowledge scale developed by Rozendaal
et al. 2010). In the case of Factor 5, the two items loading on the factor still
relied on a listing of characteristics such as fonts, logos, and wording that
may or may not be present in a given advertising example. The resulting
TABLE 1
126
Sponsorship Transparency Scale, Initial 20-Item Six-Factor Version

Factors
Corrected Item
I II III IV V VI M SD Total Correlation

Item 3: There was a clear presence of a brand in the 0.680 4.70 1.68 0.704
communication
Item 6: The communication repeatedly said positive things 0.864 3.90 1.88 0.511
about a brand
Item 7: The communication was clearly branded 0.627 4.43 1.72 0.720
Item 8: This [communication] is completely designed around 0.705 3.91 1.69 0.553
the brand and its product
Item 14: The communication featured a way to get more 0.702 3.72 1.76 0.388
information about the company
Item 15: The communication clearly conveyed the product or 0.762 4.22 1.80 0.681
service that was being promoted
Item 12: The communication did not lead me to believe a 0.559 5.02 1.72 0.365
company paid for it*
Item 13: The communication did not feature a company name.* 0.840 5.22 1.45 0.434
Item 40: It was unclear who paid for the communication* 0.852 4.88 1.79 0.449
Item 41: It was clear who created this communication 0.591 4.93 1.70 0.532
Item 35: The communication said that it was an advertisement 0.862 3.26 1.60 0.323
Item 36: The communication said it was sponsored 0.692 3.83 1.78 0.429
Item 38: Information stating that this communication was paid 0.635 3.48 1.58 0.424
advertising was prominent within the communication
Item 26: This communication was hiding the fact that it was an 0.740 3.70 1.69 0.394
advertisement*
THE JOURNAL OF CONSUMER AFFAIRS
TABLE 1
SPRING 2018

Continued

Factors
Corrected Item
I II III IV V VI M SD Total Correlation

Item 28: This seemed like an advertisement disguised as 0.779 3.50 1.70 0.123
something else*
Item 33: I think that the advertiser tried to obscure the fact that 0.755 3.57 1.67 0.310
this was an ad*
Item 10: Some of the content, wording, or characters of the 0.769 4.15 1.87 0.281
communication were recognizable to me from
advertisements I have seen before
Item 11: The fonts, logos, or colors used in the communication 0.611 4.15 1.78 0.465
were recognizable to me as belonging to the communication
sponsor
Item 17: The communication did not try to influence my 0.887 4.24 1.64 0.296
VOLUME 52, NUMBER 1

attitudes or opinions*
Item 18: The communication was not trying to sell me 0.534 4.30 1.74 0.248
something*
Initial eigenvalues 5.663 2.703 2.004 1.384 1.265 1.193
Initial variance explained (%) 28.32 13.51 10.02 6.92 6.32 5.96

* indicates item was reverse-coded for analysis.

127
128 THE JOURNAL OF CONSUMER AFFAIRS

scale had four factors: brand presence, clarity of sponsorship, disclosure,

and (lack of) deceptiveness.
Before subjecting the revised four-factor scale to a second round of data
collection and confirmatory factor analysis, several refinements to the scale
items were made. In order to allow each factor to be used as a reliable
subscale, we reduced the scale to of four items per factor at this stage. Four
items would necessitate an average interitem correlation of .50 to reach a
Cronbach’s alpha for .80 for the subscale itself (DeVellis 2012, 111). This
required removing two items from Factor 1, and writing one additional
item each for Factors 3 and 4.

Phase III. Factor Refinement and Confirmatory Analysis

An additional round of data collection was sought to validate the factor

structure of the data. Participants in this round of data collection (N = 297)
were recruited online via Amazon Mechanical Turk. All participants were
adult US residents, with a mean age of 37.3 years and a median of 33.2.
A total of 59% of participants were female, and 58.9% of participants
had a college degree or higher level of completed education. Participants
were again asked to view one randomly assigned example of an online
advertisement, and asked to complete dependent measures once they
had sufficient time to view it. Dependent measures consisted of the 16
items to measure ST as developed in Phase II, as well as measures of
two other constructs to examine discriminant validity. Participants also
answered six items measuring understanding of selling and persuasive
intent (Rozendaal et al. 2010), for the purposes of discriminant validity
between the constructs of ST and persuasion knowledge.
Six stimulus examples were chosen for this round of analysis; two each
from the categories of sponsored content, branded games, and online video
commercials. Some stimulus materials within each category were chosen
on the basis of pretests in relation to a single-item measure of overall
transparency, to test the scale’s ability to accurately distinguish between
less transparent and more transparent advertisements. The 16 items tested
proved highly internally consistent (𝛼 = .908). In addition, each of the four
subscales proved internally consistent (Brand Presence, 𝛼 = .953; Sponsor
Clarity, 𝛼 = .858; Disclosure, 𝛼 = .876; Lack of Deception, 𝛼 = .921). To
maximize parsimony of the scale, and to eliminate a few items that had low
or very high standardized regression loadings on the factor, the decision
was made to remove one item from each of the four factors for parsimony,
resulting in a final four-factor, 12-item scale (see Table 2). Individuals’
SPRING 2018 VOLUME 52, NUMBER 1 129

TABLE 2
Confirmatory Factor Analysis, 12-Item Scale, Four-Factor Correlated Model

Std. Reg.
Items (N = 297) Weights CR AVE MSV ASV

Factor 1: Brand presence .952 .868 .667 .293

BP1. There was a clear presence of a brand in the .967
[article/game/video]
BP2. The [article/game/video] was clearly .952
branded
BP3. The [article/game/video] clearly conveyed .874
the product or service that was being promoted
Factor 2: Sponsor clarity .816 .600 .667 .320
SC1. It was unclear who paid for the .687
[article/game/video] (Reversed)
SC2. It was clear who sponsored this .725
[article/game/video]
SC3. The [article/game/video] made the name of .903
the advertiser very obvious
Factor 3: Disclosure .864 .684 .079 .050
D1. The [article/game/video] said it was an .773
advertisement
D2. The [article/game/video] said it was .727
sponsored
D3. The [article/game/video] was labeled as .597
advertising
Factor 4: Lack of deception .926 .807 .214 .142
LD1. This [article/game/video] was trying to fool .905
consumers into thinking it was not advertising
(Reversed)
LD2. The advertiser tried to obscure the fact that .926
this was an ad (Reversed)
LD3. The [article/game/video] tried to deceive .862
the viewer about the fact that it was advertising
(Reversed)

mean scores on the original 16-item scale were nearly identical to their
scores on the reduced 12-item version (r = .992).
To test the model fit, we conducted a confirmatory factor analy-
sis of scale using a four-factor, three-items-per-factor model in which
the latent variables for the four factors were allowed to covary, and
for which three items were viewed as observed variables for each
latent factor. Analyses were tested using AMOS version 22.0. All 12
items had standardized regression weights from their latent factors
exceeding .600 (minimum: .687). This model was tested in competition
with alternate models including an uncorrelated four-factor model, a
single-factor model, and all permutations of two- and three-factor models
130 THE JOURNAL OF CONSUMER AFFAIRS

TABLE 3
Confirmatory Factor Analysis, Model Fit Indicators for 11 Competing Models

𝜒2 df Rel 𝜒 2 𝜒 2 Diff CFI NFI RMSEA

Null model 2812.8*** 66 42.6 NA NA NA NA

Two-factor corr. model (F1 & F2)(F3 & F4) 926.7*** 53 17.5 1886.1 .682 .671 .236
Two-factor corr. model (F1 & F3)(F2 & F4) 934.7*** 53 17.6 1878.1 .679 .668 .237
Two-factor corr. model (F1 & F4)(F2 & F3) 1099.9*** 53 20.8 1712.9 .619 .609 .258
Three-factor corr. model (F1 & F2)(F3)(F4) 201.9*** 51 4.0 2610.9 .945 .928 .100
Three-factor corr. model (F1 & F3)(F2)(F4) 520.5*** 51 10.2 2292.3 .829 .815 .176
Three-factor corr. model (F1 & F4 )(F2)(F3) 532.4*** 51 10.4 2280.4 .722 .705 .175
Three-factor corr. model (F2 & F3)(F1)(F4) 489.8*** 51 9.6 2323.0 .840 .826 .170
Three-factor corr. model (F2 & F4)(F1)(F3) 509.2*** 51 10.0 2303.6 .833 .819 .174
Three-factor corr. model (F3 & F4)(F1)(F2) 819.4*** 51 16.1 1993.4 .720 .709 .226
Four-factor uncorrelated model 406.3*** 54 7.5 2406.5 .872 .856 .148
Four-factor correlated model 89.5*** 48 1.9 2723.3 .985 .968 .054

***p < .001.

that maintained extant groupings of three items. As shown in Table 3,

the four-factor correlated model not only provided the best for the data,
but provided a strong fit as measured by a number of goodness-of-fit
indicators, 𝜒 2 = 89.54, Rel. 𝜒 2 = 1.86, p < .000, CFI = .985, NFI = .968,
RMSEA = .054; PCLOSE = 0.33 (Kenny 2014).

Discriminant Validity
Two types of discriminant validity were assessed related to this scale:
whether subscales were able to accurately distinguish from each other, and
whether overall ST scores differed from scores on persuasion knowledge
and perceived brand-fit.
Discriminant validity between factors was assessed by comparing the
squared pairwise correlations between factors to the average variance
extracted (AVE) for each factor (Fornell and Larcker 1981) (see Table 2).
For three of the factors, the AVE exceeded all relevant squared correlations.
The exception was Factor 2, sponsor clarity, which yielded a higher shared
variance with Factor 1 than the AVE. The relatively high correlation
between Factors 1 and 2 (r = .817) did not exceed the most common
thresholds for failure to demonstrate discriminant validity (.85; Kenny
1979).
Additionally, to examine whether the ST scale as a whole is sufficiently
distinct from persuasion knowledge, the same discriminant validity analy-
sis was conducted including the 12-item ST scale and the 6-item measure
of knowledge of selling and persuasive intent. The results showed that
the AVE for ST (.513) and for persuasion knowledge (.542) exceeded the
SPRING 2018 VOLUME 52, NUMBER 1 131

TABLE 4
Scale and Subscale Means by Advertisement Format and Condition

Partial Article Article Game Game Video Video Overall

F Eta2 H L H L H L Mean

Sponsorship transparency 35.37*** .378 5.42a 3.29c 4.65b 3.76c 5.01ab 4.40bc 4.43
(full)
F1: Brand presence 50.14*** .463 6.49a 2.96c 5.89a 4.09b 5.71a 4.97b 5.05
F2: Clarity of sponsorship 22.56*** .279 6.18a 4.24c 5.51a 3.80c 5.44ab 4.56bc 5.02
F3: Disclosure 4.75*** .075 3.32a 2.98a 3.65ab 3.52ab 4.44b 3.88ab 3.58
F4: (Lack of) deception 24.16*** .293 5.70a 2.97b 3.54b 3.64bc 4.44c 4.19c 4.07
Selling and persuasive 15.37*** .209 5.99a 4.46c 5.01b 4.72bc 5.21b 4.37c 5.01
intent

Note: Within a given row, items that share a subscript are not significantly different at the p < .001
level, based on post hoc mean comparisons with Bonferroni correction.
*p < .05, **p < .01, ***p < .001.

square of the correlation (r = .438; squared r = .232), demonstrating that

the two constructs are distinct, although mildly correlated.

Comparison across Advertisement Platforms and Examples

The Phase III data were also used to assess the validity of the ST scale by
examining how well the scale discriminated between pairs of examples of
advertisements that had been selected based on prior pretests as examples
of lower and higher levels of transparency. Independent samples t-tests
were used to compare the means between the two examples for each of
the three advertising formats: sponsored articles, advergames, and videos
(see Table 4 for full condition means). The results showed that participants’
scale scores accurately discriminated between the chosen examples for
video commercials (t(112) = 14.18, p < .000; M low = 3.29, M high = 5.42)
sponsored articles, (t(106) = 4.66, p < .000; M low = 3.76, M high = 4.65), and
games (t(73) = 2.21, p < .05; M low = 4.40, M high = 5.01).

DISCUSSION AND IMPLICATIONS

The FTC (2015a, 2) notes that emerging covert advertising formats

“mask the signals consumers customarily rely on” to recognize a persua-
sive message. Inherent in that recognition is the identification of a paying
sponsor. Consumers’ ability to recognize and identify the sponsor allows
them to assess the persuasion agent’s motives and credibility. To do so,
the sponsor needs to be clearly and conspicuously communicated through
a variety of tactical cues. “From the FTC’s perspective, the watchword is
transparency” (FTC 2015b, 2, emphasis added).
132 THE JOURNAL OF CONSUMER AFFAIRS

Thus, the impetus for developing an ST scale is both practical and theo-
retical. There is a clear-cut need for a single scale, developed using estab-
lished scale development processes, which can be used across a variety of
studies and contexts that transcend persuasion knowledge assessment. In
light of consumers’ increased exposure to covert advertising tactics and for-
mats, current efforts to measure and examine persuasion knowledge do not
fully address the potential limitations of what is a largely dispositional mea-
sure. Furthermore, practitioners and regulators need the ability to identify
unclear persuasion tactics that might be viewed as misleading advertis-
ing. Measuring whether or not “reasonable” consumers can correctly (1)
recognize paid for (i.e., sponsored) content when they see it and (2) iden-
tify the content’s sponsor is at the heart of advertising identification (i.e.,
“material”).
The ST scale addresses these needs. By using an iterative emic
item-generation process heavily rooted in feedback from consumers, and
subjecting the scale to analysis and refinement using established proce-
dures, a 12-item scale was developed that is highly internally consistent,
and demonstrates four correlated internally consistent factors. Consumers’
perceptions of ST of a message were found to have basis in several char-
acteristics of the message: brand presence, clarity of sponsor, disclosure,
and lack of deception. Results confirmed that these factors are conceptually
distinct, although correlated.
The ST scale offers both public policy and self-regulatory applications.
In its Enforcement Policy, the FTC (2015a, 11) states that the commission-
ers “scrutinize an entire ad” and depend on their own expertise to deter-
mine whether an ad is misleading or not. Furthermore, the FTC’s (2015b)
guidance for business includes 17 examples regarding when businesses
should disclose that content is native advertising. While these examples
are insightful they, along with relying on individuals’ expert assessment,
result in a subjective environment that does not provide for the breadth of
scenarios marketers are or will face in an ever-changing media landscape.
Native advertising is highly contextual. Thus, FTC efforts to be prescrip-
tive via guidance statements and examples may unnecessarily hamper legal
and creative marketing communication (IAB 2015). The ST scale could be
applied on an individual basis, which allows for contextual consideration.
According to Mary Engle, the FTC’s associate director of advertising
practices, “For us, the concern is whether consumers recognize what
they’re seeing is advertising or not … An ad is deceptive if it misleads
a significant percentage of consumers” (Sluis 2015). She also stated that
“significant” usually means 15% of consumers but could go as low as 10%
(Sluis 2015). Thus, this ST scale could serve as a powerful diagnostic tool
SPRING 2018 VOLUME 52, NUMBER 1 133

to develop ST norms across advertising formats in addition to evaluating

individual advertising content.
Copytesting surveys are often used by both the FTC and the advertiser
in advertising deception cases (Mazis 1996). While the typical application
is to evaluate potential deceptiveness of express or implied claims (Mazis
1996), the current marketing environment, with its increasing and emerging
covert tactics, suggests that an objective means to assess the extent of
ST is warranted. Hastak et al. (2001) identify numerous opportunities for
consumer surveys to play a role in policymaking. These areas include
identifying the problem, building a policy mandate, exploring policy
options, executing the policy and evaluating and enforcing the policy.
The ST scale is most likely of value in the latter phases of exploring
policy options, executing, evaluating and enforcing policy. To do so,
experiments could manipulate various cues (such as disclosure format,
brand name, and logo) and formats (such as television commercials,
advergames, or native) likely to influence consumer perception of ST. The
authors note that academic researchers are especially poised to contribute
to policy evaluation and enforcement. Additionally, “government agencies
frequently seek objective data to make a strong case that a violation has
occurred” (Hastak et al. 2001, 174–175). The ST scale could play a key
role in informing both stages.
In addition to providing holistic evaluation, the four-factor scale also
allows for identification of specific perceptions that may be germane to
understanding the psychology of how consumers evaluate covert or native
advertising. The ability to validly and reliably measure brand presence,
clarity of sponsorship, disclosure, and deceptiveness may help identify
both processes through which recognition of covert advertising affects
attitudes and moderating characteristics that influence the relationship
between recognition and outcomes.
Specifically, the ST disclosure subscale would provide insight into con-
sumers’ understanding of and subsequent reactions to undisclosed spon-
sored content. For example, news feeds and recommendation widgets often
provide links to sponsored content appearing on separate publisher sites
without first disclosing on the click-into page that such content is adver-
tising (IAB 2015). In these situations, the ST disclosure subscale could
gauge consumers’ perceptions that the widget or news feed content was
effectively disclosed as advertising (depending on the presence or itera-
tion of the disclosure). Alternatively, perceptions provided by a disclosure
subscale may help explain consumers’ subsequent click behavior, attitudes
toward the content, sponsoring brand, and even the publisher.
134 THE JOURNAL OF CONSUMER AFFAIRS

Likewise, the ST scale has self-regulatory application. In addition to

using the scale in copy testing for either assessment or evidence of
ST, individual industry trade associations could use the scale to develop
guidance for their respective industries. The National Advertising Division
(NAD) (2014, 1) would have benefited from this scale when they expressed
concern “that the ad unit links could be understood by consumers to mean
that they were being directed (linked) to editorial rather than sponsored
content.” The NAD considered these ad unit links, under a “You May
Like” heading with their “images-plus-texts” as implied claims of editorial
content and that they did not “clearly and conspicuously disclose that
the site to which consumers are being directed is sponsored content “(1).
American Express made changes that “provided greater transparency to
consumers … and action NAD deemed necessary and appropriate” (5).
Application of the ST scale could have been and can be used by advertisers
and self-regulatory entities on a regular basis to ensure the desired level of
ST. This ST scale may also help to resolve some tension between regulators
and industry groups about the appropriate level of stringency of disclosure
guidelines (IAB 2015) by allowing empirical, in-context testing of how
clear or prominent a disclosure may be (Garrison et al. 2012).

CONCLUSION

One potential outcome of scale development includes developing norms

(Churchill 1979). Part of the FTC’s consideration in evaluating possible
advertising deception involves the perspective of the “reasonable” con-
sumer. In a fluctuating, competitive media environment where emerging
formats challenge our expectations of and familiarity with “what is adver-
tising,” the ability to have a means by which to assess the extent to which
a consumer can make this assessment is paramount. As advertising that is
difficult to discern by format alone grows more ubiquitous, the need for
and application of the ST scale presented in this research has emerged. We
foresee that the rigor of the scale development process and both its theoret-
ical and practical implications will encourage its implementation across a
diversity of settings. Furthermore, the scale is designed to be comprehen-
sive enough to apply to as yet unforeseen advertising formats. Regulators
could implement this scale at a variety of stages within the policymak-
ing framework (Hastak et al. 2001). Practitioner application of this scale
could assess ST and make necessary adjustments prior to content dissem-
ination. This approach would allow for media innovation while ensuring
that consumers clearly recognize and identify the message source. Indeed,
transparency is the watchword (FTC 2015b).
SPRING 2018 VOLUME 52, NUMBER 1 135

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