How susceptible are consumers to deceptive advertising claims?

A retrospective look at the experimental research literature

Guang-Xin Xie, University of Massachusetts Boston, USA* David M. Boush, University of Oregon, USA

This article reviews and assesses the experimental research on deceptive advertising claims from the past thirty years. The literature suggests that consumers can be highly susceptible when (1) situational and dispositional constraints impede their ability to discern claims that are false or that omit material facts, (2) the literal claims may be true but the implications evoke erroneous inferences, and (3) the remedial information is not adequately utilised to correct initial false perceptions. This review contributes to the literature by clarifying the conceptual boundaries, underlying mechanisms, and psychological ramifications of deceptive advertising claims. This article also discusses public policy implications, and concludes with outlines for future research. Keywords Advertising deception, Deceptive claims, Consumer susceptibility, Psychological mechanisms, Experimental research

Introduction Good advertising not only tells the literal truth but also avoids possible deception through subtle implication or omission. (Freer, 1949) Extant research has documented that consumers can be highly susceptible to deceptive advertising claims that lead them to acquire false information, form misperceptions, and become involved in consumptive behaviours to their detriment. The experimental studies, in particular, explore the potential causal relationships between claims and consumer psychological or behavioural responses. This article reviews and assesses this stream of research over the past thirty years. The purpose is to identify the key findings and remaining issues in order to foster future research. The bulk of experimental research to date has centred on verbal claims in broadcast and print commercial advertisements, mainly targeting adult consumers. The findings indicate that consumers can be highly susceptible
*Correspondence details and biographies for the authors are located at the end of the article. The Marketing Review, 2011, Vol. 11, No. 3, pp. 293-314 http://dx.doi.org/10.1362/146934711X589480 ISSN1469-347X print / ISSN 1472-1384 online Westburn Publishers Ltd.

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The Marketing Review, 2011, Vol. 11, No. 3 when (1) situational and dispositional constraints impede their ability to discern claims that are false or omit material facts, (2) the literal claims may be true but the implications evoke erroneous inferences, and (3) the remedial information is not adequately utilised to correct initial false perceptions. However, the literature remains inconclusive with regard to the conceptual boundaries, underlying mechanisms, and psychological ramifications of deceptive advertising claims. This article addresses some of these issues and contributes to the literature in three ways. First, scholars and practitioners may disagree about what is deceptive, and why. This article presents some of the typical viewpoints and promotes interdisciplinary thinking about this cross-disciplinary topic. Second, the empirical studies tend to examine context-specific phenomena. If they are well integrated, theoretical insights can emerge from seemingly isolated effects and suggest common explanations across contexts. Third, this article discusses some of implementation challenges in regulating deceptive advertising claims and outlines the directions for future research. This article is organised in five sections: (1) conceptual boundaries of deceptive advertising, (2) review and assessment of the experimental findings that demonstrate consumer susceptibility, (3) effectiveness of regulatory remedies, (4) public policy implications, and (5) directions for future research. Deceptive Advertising For the purposes of this article, deceptive advertising is treated as a research domain rather than a single construct. Within this domain, researchers have examined four related but distinct constructs: deception, deceptiveness, misleadingness, and legal deception. In general, academic scholars tend to take different perspectives from practitioners about what a deceptive claim is and why deception matters. This review begins with clarifying the conceptual boundaries of these constructs. Behavioural definitions address scholarly viewpoints, while regulatory definitions mainly reflect public policies in the United States. Behavioural Definitions Experimental researchers have defined advertising deception as a perceptual outcome of being misled from the consumers standpoint. Deception is a consequence when consumers acquire false information, form misperceptions, or become involved in consumptive behaviours to their detriment. Gardner (1975, p. 41) represents this school of thinking based on consumer perceptions, rather than advertisers acts of deceiving. He argues: If an advertisement (or advertising campaign) leaves the consumer with an impression(s) and/or belief(s) different from what would normally be expected if the consumer had reasonable knowledge, and the impression(s) and/or belief(s) is factually untrue or potentially misleading, then deception is said to exist. Olson and Dover (1978, p. 30) propose a simpler definition: Deception is considered to occur when consumers acquire demonstrably false beliefs as a function of exposure to an advertisement. Following the same reasoning,

Xie & Boush How susceptible are consumers to deceptive advertising? Barone and Miniard (1999) state that deception is evident if consumers incorrectly infer that a product possesses certain attributes due to an advertisement. Advertising deceptiveness, in comparison, refers to the likelihood or possibility that deception will occur as a result of exposure to an advertisement (Richards, 1990). Deceptiveness can be evaluated in terms of anticipated or actual consequences. In other words, the judgment can be either before or after the fact: if the advertisement contains any element that is highly likely to deceive consumers, the advertisement is deceptive (Ford & Calfee, 1986). Misleadingness is considered a subtype of deceptiveness (see Table 1).

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Table 1 Definitions
Subject Deception Source FTC (1983) Definition The Commission will find deception if there is a misrepresentation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumers detriment Deception is found when an advertisement is the input into the perceptual process of some audience and the output of that perceptual process (a) differs from the reality of the situation and (b) affects buying behaviors to the detriment of the consumer Deception occurs when a consumer perceives and believes an advertising claim (explicit or implied) that is false, but the deception is of little concern unless the claim is relevant If an advertisement (or advertising campaign) leaves the consumer with an impression(s) or belief(s) different from what would normally be expected if the consumer had reasonable knowledge, and that impression(s)and/or belief(s) is factually untrue or potentially misleading, then deception is said to exist Deception is considered to occur when consumers acquire demonstrably false beliefs as a function of exposure to an advertisement This work indicates that consumers may make inferences that go beyond the information contained in ad claims. When these inferences do not match reality (e.g., incorrectly inferring that a product possesses certain attributes or attribute levels), deception occurs An advertisement is deceptive if, and only if, it makes one or more misleading claims Deceptiveness is the capacity or tendency of a claim to result in deception An advertisement is misleading if it creates, increases, or exploits a false belief about expected product performance A misleading prescription drug advertisement is one which causes either through 1) its verbal content, 2) its design, structure and/ or visual artwork, or 3) the context in which it appears at least n% of a representative group of practicing physicians to have a common impression or belief regarding the advertised drug which is incorrect or not justified

Aaker (1974, p. 139)

Armstrong & Russ (1975, p. 24) Gardner (1975, p. 42)

Olson & Dover (1978, p. 30) Barone & Miniard (1999, p. 59)

Deceptive

Hyman (1990, p. 9) Richards (1990) Misleading Russo et al. (1981, p. 128) FDA (as in Jacob & Small, 1975, p. 66)

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The Marketing Review, 2011, Vol. 11, No. 3 According to Russo, Metcalf, and Stephens (1981, p. 128), an advertisement is misleading if it creates, increases, or exploits a false belief about expected product performance. In addition, an advertisement is misleading as long as any one component is misleading (Hyman, 1990). Regulatory Definitions According to the Federal Trade Commission (FTC) of the United States, advertising deception refers to a representation, omission, or practice that is likely to mislead the consumer acting reasonably in the circumstances, to the consumers detriment (FTC, 1983). The Food and Drug Administration (FDA) also provides guidelines in specific areas such as food and drug labels. A misleading advertising claim or label is: the one which causes - either through 1) its verbal content, 2) its design, structure and/or visual artwork, or 3) the context in which it appears at least n% of a representative group of practicing physicians to have a common impression or belief regarding the advertised drug which is incorrect or not justified (FDA, as cited in Jacob & Small, 1975, p. 66) The legal basis for burden of proof can be traced to Section 43(a) of the Lanham Act: A plaintiff must demonstrate that the commercial advertisement or promotion is either literally false, or that it is likely to mislead and confuse consumers. A complete overview of the legal complexity and various practices can be found in The Law of Advertising (Astrachan, Thomas, & Rosden, 2007). One key difference between behavioural and regulatory definitions resides in materiality. According to the FTC, a material misrepresentation or practice is one which is likely to affect a consumers choice or conduct regarding a product (FTC, 1983). Other than consumer perceptions, the regulators also consider whether a deceptive advertisement is effective enough to produce detrimental outcomes (Richards & Preston, 1992). When a claim is not necessarily truthful, the FTC may not regulate the claim if the negative impact is negligible (Richards, 1990). For instance, advertisers sometimes use puffery - an obviously exaggerated and nonfactual claim (e.g., subjective statements of extreme but personal opinions) that a typical reasonable consumer does not believe (Kamins & Marks, 1987; Permut & Haefner, 1973). In the United States, puffery is usually not considered to be material, and therefore not legally deceptive (Preston, 1976; Richards, 1990). Summary: Experimental researchers tend to rely on consumer perceptual evidence to assess deceptive advertising claims, while regulators also take materiality into consideration. In practice, both scholars and practitioners may face challenges to prove advertising deceptiveness technically. Indeed, the extent to which consumers can be deceived may depend upon a mix of intrinsic and extrinsic factors. Sometimes the relationships among these factors can be ambiguous, intertwined, and subtle. Therefore, under what circumstances consumers are more or less susceptible to deceptive advertising has become a focal issue of interest for experimental researchers. The next section discusses the key findings that reveal the psychological mechanisms and ramifications of deceptive advertising.

Xie & Boush How susceptible are consumers to deceptive advertising? Figure 1 The general framework of consumer susceptibility to deceptive advertising claims

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Content Advertising claims

Consumer Individual differences in responding to advertisements

Context Situational differences when advertisements are presented and/or consumers are exposed to the advertisements

Consumer Susceptibility Consumer susceptibility to advertising refers to the extent to which individuals attend to and value commercial messages as sources of information for guiding their consumptive behaviors (Barr & Kellaris, 2000, p. 230). This construct is derived from Moore and Moschiss (1978) concept of vulnerability and can be traced back to earlier works on influenceability (McGuire, 1968). In the context of deceptive advertising, susceptibility refers to the extent to which consumers are more or less likely to acquire false information, form misperceptions, and engage in consumptive behaviours to their detriment. Over the past three decades, experimental researchers have sampled different but also limited types of consumers (e.g., college students, seniors, and children). In that sense, susceptibility documented in the literature reflects a conditional status for some but not all consumers. Consumer susceptibility to deceptive advertising has been a growing area of study since the 1980s. Specific topics include (1) the conditions under which consumers can or cannot recognise deceptive claims (e.g., Armstrong, Gurol, & Russ, 1979; Burke, DeSarbo, Oliver, & Robertson, 1988; Cohen, 1972; Haefner & Permut, 1974; Liefeld & Heslop, 1985; Russo et al., 1981), (2) the psychological mechanisms and ramifications of being deceived (e.g., Darke & Ritchie, 2007; Urbany, Bearden, & Weilbaker, 1988), and (3) the effects of regulatory remedies (e.g., Darke, Ashworth, & Ritchie, 2008; Shimp & Preston, 1981). Extant research suggests that high susceptibility results from interactions among the deceptive claims, situational contexts, and consumer characteristics (Figure 1). The next sections discuss the key findings and the theoretical underpinnings of the existing research.

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The Marketing Review, 2011, Vol. 11, No. 3 Deceptive Claims Typology: Advertising claims are the verbal messages that convey material information about product or service attributes. Over the years, researchers have developed a number of typologies. Some are exhaustive to address the variety of claims (e.g., Ford, Kuehl, & Reksten, 1975; Preston, 1977; Richards, 1990). For instance, Preston (1977) proposes ten types of deceptive claims by implications: expansion, demonstration, inconspicuous qualification, inconspicuous context, uniqueness, reasonable basis, no qualification, significance, social concerns, and third-party implications. Others tend to be more parsimonious in categorising deception by the nature of deceptive means (e.g., Gardner, 1976; Russo et al., 1981). Gardner (1975) argues that advertising deceptiveness results from unconscionable lies, claim-fact discrepancies, and claim-belief interactions. Russo et al. (1981) refine these categories as fraud, falsity, and misleadingness. Fraud refers to blatant lies with a deliberate intention to cheat; falsity focuses on nonfactual information; and misleadingness occurs when the literal claims can be true but consumers draw erroneous inferences and form misperceptions. Most recently, Hastak and Mazis (in press) propose a theory-based typology. This new typology aims to integrate psychological theories with a legal framework to categorise various types of deceptive claims. The authors argue that advertising or labeling claims can mislead consumers by way of (1) omission of material facts, (2) semantic confusion, (3) intra-attribute inference, (4) inter-attribute inference, and (5) source-based inference. This review identifies the key elements in previous typologies and provides a succinct framework in terms of falsity, omission, and implication (Table 2). This framework does not add another typology to the literature; rather, it organises the discussion of consumer susceptibility. False claims contain information that can be verified as nonfactual. Omission refers to situations in which advertisers conceal material consumption-related information. Implication is not stated overtly but can be reasonably inferred. The claims are intentionally crafted in a way to mislead consumers to read beyond the literal messages and to draw erroneous inferences about product or service attributes. Measurement: Operationally, experimental researchers have used three major approaches to identify deceptive claims: normative beliefs, salient beliefs, and descriptive techniques. These methods largely rely on self-report questionnaires administered during or after research participants are exposed to the advertisements (Barbour II & Gardner, 1982). The normative-belief method tests whether the claims lead to false net impressions of product attributes or anticipated performance. The salient-belief method focuses on capturing specific beliefs or impressions that are significant enough to influence consumers purchasing decisions. Descriptive techniques examine the extent to which consumers themselves think a particular advertisement is deceptive (for details, see Xie & Boush 2011). Falsity and omission: Table 3 provides examples of research on consumer susceptibility during the past thirty years. Despite the variety of deceptive claims, a fundamental issue is whether consumers can detect false claims or material omission (Vladeck, 2000). A number of studies have demonstrated this straightforward but also fundamental phenomenon (e.g., Barone &

Xie & Boush How susceptible are consumers to deceptive advertising? Table 2 Deceptive advertising claims
Type Key Characteristic Description Deceptive Element Falsity False Nonfactual Claims/presentations that information can be verified objectively as untruthful Claims/presentations that Omission Completely Incomplete fail to disclose material or partially consumption-related omit information material information Implication Semantic Ambiguous Claims/presentations ambiguity that use ambiguous narratives, terms, rhetoric, or artworks to suggest superiority Subjective Atypical Claims/presentations that speculations showcase untypical occurrences or artificial effects as supportive evidence Conjectural Claims/presentations that lack substantiation prior to launching the advertisements Speculative Claims/presentations that imply superiority or certain attributes without solid evidence Peripheral Manipulative Claims/presentations that cues create false beliefs or exploit existent false beliefs by highlighting the positive cues such as uniqueness, celebrity or expert endorsement, credible sources etc. Example

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0 calorie! (if the product contains more than 0 calorie) Clinically proven!(if without further justifications)

Cheaper and better! (if without substantiation)

Lose 30 pounds in 2 weeks! (if only effective for those who work out heavily) 100% satisfaction guaranteed! (if without existing evidence) Safety Champion Brakes! (if not safer than all other brakes). 0 cholesterol! (if 0 cholesterol is an industry default and adds no particular value).

Miniard, 1999; Cunningham & Cunningham, 1976; Olson & Dover, 1978; Shimp, 1978; Urbany et al., 1988). Intuitively, when consumers rely on advertisements for information and trust questionable claims, they are more likely to be deceived, compared to the control condition (i.e., the truthful and complete claims) or the corrected condition (i.e., the questionable claims are removed or disclosed). Consumers can become less susceptible when they have diagnostic schemata, including product expertise (Andrews, Burton, & Netemeyer, 2000), awareness of deceptive tactics (Blair & Landon, 1981; Liefeld & Heslop, 1985; Urbany et al., 1988), and prior product or service experience (Barone, Palan & Miniard, 2004). For instance, Mobley, Bearden, and Teel (1988) compare

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Table 3 Research examples of consumer susceptibility to deceptive claims (1980-2010) Condition Source
Deception detecting Mobley et al. (1988) Boush et al. (1994) Andrews et al. (2000)

Main Finding
Vague characteristics of tensile claims elicited more negative thoughts about the advertisements than the standard price promotions. Adolescents showed discernible patterns of beliefs about advertising tactics by grade 6. The scepticism consisted of disbeliefs in advertiser claims and mistrust in advertisers motives. More favorable but erroneous evaluations of absolute nutrition content for comparative than non-comparative claims. Disclosure was more effective when combining with the general (vs. specific) ad claims and high knowledge consumers (vs. low knowledge consumers). Low pricing knowledge respondents were more interested in the offer than those with high pricing knowledge.

Hardesty et al. (2007)

LaTour & LaTour Respondents in a positive (vs. negative) mood were more likely to notice (2009) incongruently false information in a hedonic ad; but they were also more likely to develop positive feelings toward the advertised brand. Information Gaeth & Heath processing (1987) Johar (1995) Younger adult respondents were less susceptible to misleading implications than the elderly in the sample, not due to better knowledge but the tendency to scrutinize advertisements more thoroughly. Highly (vs. less) involved respondents had greater purchase intentions after exposure to incomplete-comparison claims. Less (vs. highly) involved ones had greater purchase intentions after exposure to inconspicuousqualification claims. High cognitive capacity (vs. low) and highly motivated (with vs. without accuracy incentive) respondents were more likely to discern the main claims using concurrent disclosure in ads.

Johar & Simmons (2000) Inference drawing

Liefeld & Heslop Respondents were suspicious of on-sale claims and underestimated the true (1985) ordinary selling price, but not regularly price or MSLP. Kamins & Marks (1987) Reece & Ducoffe (1987) Burke et al. (1988) Snyder (1989) Pechmann (1996) Barone & Miniard (1999) Darke & Ritchie (2007) Xu & Wyer (2010) Respondents were more susceptible to deception when exposed to a twosided reputational form ad. Respondents tended to misunderstand product attributes due to ambiguous and confusing brand names. Misleading implications increased consumers false attribute beliefs on headache pain relief, side effects, and speed of relief, compared with the control conditions. More respondents believed that brands described by implied-superiority claims were better than non-comparative claims. An ad claimed that a company charged the lowest rate for a service but didnt mention it charged more than competitors for other required services, which leads to false beliefs that this company has the lowest overall price. False inferences occurred not only along the attributes featured in the comparative claims, but also those in non-comparative claims. Deceptive advertising evoked a general distrust toward advertising. The negative reaction carried over to the subsequent second-party advertisements. The use of questionable jargons increased the ad effectiveness in professional magazines but decreased the ad effectiveness in popular magazines.

Xie & Boush How susceptible are consumers to deceptive advertising? the use of tensile price claims (e.g., save up to 20%) and specific price reduction (e.g., save 20%). The results suggest that those who recognise vague tensile claims rate the advertisements as more misleading and hold more negative attitudes toward the advertisers. Implication: Many alleged deceptive claims nowadays are implicitly manipulative rather than outright false (Mazis, 2001; Shanahan & Hopkins, 2007). The literature has documented solid evidence of deception by implication. For example, in a study about attribute claims of ibuprofenbased brands, Burke et al. (1988) examine four types of claims: no attribute information, truth, expansion implications, and inconspicuous qualification implications. They find that expansion and inconspicuous qualification implications increase respondents false attribute beliefs about headache pain relief, side effects, and speed of relief. In another study (Pechmann 1996), a company claims that it charges the lowest rate for a particular service but does not mention that it charges more than competitors for other required services. Due to erroneous inferences, respondents tend to believe that this company has the lowest overall price. Erroneous inferences can expand beyond the claimed attributes. Barone and Miniard (1999) expose respondents to a partially comparative advertisement containing a combination of comparative and noncomparative claims. They find a copy x copy interaction: the processing of one claim affects beliefs about other claims in the same advertisement. In this process, respondents acquire the belief that the advertised brand is better than the competitor, not only in terms of the attributes featured in the comparative claim, but also those in the non-comparative claims. Theoretically, erroneous inferences occur due to psychological mechanisms such as pragmatic implication, logical consistency, and informational influence (Hastak & Mazis, in press). In essence, consumers have certain default understandings about the proper usages of certain words, semantics, symbols, and expressions (Harris, 1977). Such lay theories are not perfectly accurate or logical, but consumers often rely on such easily accessible schemata to comprehend an advertising claim. Deceptive claims take advantage of such presuppositions without clarifying the exact meanings in specific contexts. For instance, a package label that claims 50% more recycled content than before suggests an increase of recycled goods by one half; however, the manufacturers total increase of recycled content has only improved from 2% to 3%. Although the message is technically true, the FTC rules this claim deceptive because the label can create false impressions (FTC, 2010a). Situational Contexts When consumers have diagnostic schemata that enable them to discern deceptive claims, they may either underperform or overperform, depending upon (1) the momentary cognitive or emotional status that influences how they process information and (2) the immediate surrounding wherein the claims are presented. These factors are grouped under situational contexts. The theoretical underpinning ties closely with the classic dual-processing models. For example, the Elaboration-Likelihood Model (ELM) posits that both motivation and capability influence the information processing routes

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The Marketing Review, 2011, Vol. 11, No. 3 whereby people comprehend a persuasive message differently (Petty & Cacioppo, 1981; Petty, Cacioppo, & Schumann, 1983). In the context of deceptive advertising, detection can be a demanding cognitive task that requires certain types and levels of motivations and abilities. Consumers are not always highly motivated and capable of discounting deceptive claims. If they are distracted at the moment of exposure, they can become more susceptible. Information processing: Susceptibility differs based on how a consumer processes claims, including processing involvement (Celsi & Olson, 1988; Johar, 1995), inferential strategies (Barone & Miniard, 1999), and information relevancy (Lee & Mason, 1999). For example, Johar (1995) demonstrates that highly involved respondents have greater purchase intentions after exposure to incomplete-comparison claims (e.g., the sound quality is better), while less involved consumers have greater purchase intentions after exposure to inconspicuous-qualification claims (e.g., placing a qualification in fine print). Motivational or emotional status influences processing style and focus, which can ultimately enhance or impede consumers ability to discern deceptive claims. Accuracy-motivated consumers tend to process information more systematically, such that the message validity is of central concern; in comparison, defense-motivated consumers tend to think more heuristically, such that self-threatening cues are more diagnostic (Tormala, Clarkson, & Petty, 2006). Regarding the role of emotion, LaTour and LaTour (2009) find that respondents in a positive (vs. negative) mood are more likely to notice incongruently false information in a hedonic advertisement. Immediate surroundings: A creditable advertisement can be considered deceptive in a context where this advertisement follows a deceptive one. Darke and Ritchie (2007) suggest that once consumers recognise the risk of being deceived, a defensive motivation can be activated in a heuristic process. Negative responses, such as distrust, serve a preventive function of reducing the risk of being deceived. These responses can be fast and strong enough to outweigh the accuracy motivation to consider alternatives systematically. As a result, the negativity not only applies to the deceptive advertisers, but also carries over to subsequent advertisers, even if they are not deceptive (Darke et al., 2008, Darke, Ashworth & Main, 2010). In contrast, a more credible context can reduce the perceived deceptiveness of a questionable claim. Xu & Wyer (2010) find that the use of ambiguous and potentially misleading jargon increases an advertisements trustworthiness in professional magazines but not in popular magazines. Such contextual effects can be particularly salient when consumers pay less attention to the content validity and focus more on the contextual cues. Obviously, the empirical findings to date are not exhaustive in addressing all relevant processing styles, motivations, emotions, and contexts that influence consumer susceptibility. Nonetheless, these studies have convincingly demonstrated the importance of situational contexts. Consumer Characteristics Previous research has documented a number of individual differences in how consumers tend to respond to advertising claims. These intrinsic differences can be either dispositional or developmental. Dispositional differences refer to

Xie & Boush How susceptible are consumers to deceptive advertising? predetermined characteristics such as age and gender, while developmental differences such as knowledge and expertise can change over time. Dispositional differences: John and Cole (1986) argue that age is indicative of the severity of memory- and knowledge-based deficits when consumers process advertising information. More specifically, Gaeth and Heath (1987) find that young adults are less susceptible to certain misleading techniques than older adults, not because they are more capable of distinguishing truthful claims from misleading implications, but due to the tendency of younger people to be more engaged in the process of scrutinising advertisements. Additionally, gender can also be a factor. Barone et al. (2004) reveal that gender moderates susceptibility to copy x copy interactions in erroneous inferences. Males are more susceptible than females in general, but female nonusers of the product are more susceptible than male nonusers. Developmental differences: The literature has documented consumer self-protective mechanisms such as a general scepticism toward advertising (Obermiller & Spangenberg, 1998) and domain-specific knowledge about advertising tactics (Boush, Friestad, & Rose, 1994). Friestad and Wright (1994) develop a typology of such diagnostic schemata as the agent, topic, and persuasion knowledge. Agent knowledge is beliefs about the traits, competencies, and goals of the persuasion agent, such as an advertiser. Topic knowledge refers to beliefs about the topic of the message, such as product specifications. Persuasion knowledge refers to beliefs about a persuasion agents tactics, such as scarcity or flattery. Developmental differences can be attributed to a socialisation processes whereby consumers learn to cope with deceptive persuasion effectively. According to John (1999), consumer knowledge structure and inferential abilities evolve from the perceptual stage (3 - 7 years), through the analytical stage (7 - 11 years), and to the reflective stage (11 - 16 years). Consumer susceptibility to deceptive claims varies depending upon the different life stages from early childhood to adulthood (Barry, 1980; Wright, Friestad, & Boush, 2005). In a recent study of preschool childrens persuasion knowledge, McAlister and Cornwell (2009) find that children must first understand that another persons inner mental state differs from their own to be able to detect persuasion intent in advertising. In another study of adolescents, Mangleburg and Bristol (1998) suggest that advertising scepticism is a general attitude learned from parents, peers, and the media. Specific marketplace knowledge formulates an informational basis for scepticism. Adult consumers can develop more sophisticated knowledge about marketers motives and tactics. For instance, Campbell and Kirmani (2000) demonstrate that consumers may be suspicious about marketers sincerity because they are concerned about marketers ulterior sales motives. On the other hand, the literature has also documented the limitations of self-protective mechanisms. After all, not all consumers are experts. Product knowledge asymmetry alone, for example, can weaken the effect of defensive suspicion (DeCarlo, 2005). Even when consumers are aware of manipulative tactics, they can sometimes be distracted by factors such as momentary cognitive business (Campbell & Kirmani, 2000), previous agent-consumer relationships (Kirmani & Campbell, 2004), and low persuasion knowledge confidence (Ahluwalia & Burnkrant, 2004). At a conscious or subconscious

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The Marketing Review, 2011, Vol. 11, No. 3 level, consumers can easily switch out of defensive mode and become more susceptible. Summary: Depending on whether consumers have the ability and motivation to evaluate questionable claims carefully, they may or may not recognise falsity, omission, or misleading implications. Obviously, when they fail to detect such deceptive claims, they are more susceptible. Even when they are capable of discerning questionable claims, they may not adequately comprehend the messages to form accurate beliefs, impressions, or evaluations. If they are not motivated or become distracted, they are more susceptible. Situational contexts and individual differences may moderate the salience of such effects. In addition, susceptibility may not depend on whether consumers can recognise deceptive claims. They may be inclined to react against certain types of claims using heuristics such as distrust, suspicion, or scepticism. When these defensive mechanisms are inactivated, consumers can be more susceptible. Regulatory Remedies U.S. and European Union regulations tend to focus on ensuring that consumers read and understand remedial information (Petty, 1997). The most common regulatory remedies to reduce consumer susceptibility to deceptive advertising are affirmative disclosure and corrective advertising (Jacoby, Nelson, & Hoyer, 1982). Affirmative disclosure refers to statements or qualifications placed directly in advertisements to provide additional information to prevent consumers from making false judgments about the claims (Andrews et al., 2000). Corrective advertising refers to an advertisers after-the-fact statements or qualifications to change consumers impressions, knowledge, and beliefs previously acquired from the advertising claims. These kinds of regulatory remedies are called corrective because advertisers who have misled consumers are required to rectify deception with further advertisements. Affirmative Disclosure Affirmative disclosure provides additional product information that is not included or highlighted in the primary advertising message. Regulatory requirements for disclosure are based on two main assumptions: (1) consumers have a right to be informed as well as to not be deceived; and (2) effective information dissemination can be accomplished with more specific communication standards (Frech & Barksdale, 1974). The required disclosures are intended to ensure proper presentation of commodities with respect to a variety of elements such as ingredients, price, quality, purity, origin, attributes, safety, risk, warnings, and nature of manufacture. The fundamental standard is that an effective disclosure must be clear and conspicuous (Hoy & Stankey, 1993). For example, the FDA has implemented stricter guidelines for food packaging and labeling toward full disclosure of product information since 1973. Disclosure includes nutrition, cholesterol, fat, flavourings and spices, special dietary use, imitation foods, and nonstandardised foods (Frech & Barksdale, 1974). However, a large body of research shows that affirmative disclosure often fails to remind consumers about potential risks (e.g., Andrews et al., 2000;

Xie & Boush How susceptible are consumers to deceptive advertising? Jacoby et al., 1982; Johar & Simmons, 2000; Liebert, Sprafkin, Liebert, & Rubinstein, 1977; Moorman, 1990). For example, the disclosed information can be hard to notice, read, and understand (Muehling & Kolbe, 1998). In addition, consumers do not always deliberately search for the disclosure information when evaluating the product attributes, especially those who trust that the regulatory institutions have adequately protected consumer rights (Boush, Friestad, & Wright, 2009). Even when the disclosure is noticed and read, its effectiveness can be less than satisfactory (Stewart & Martin, 1994). Johar and Simmons (2000) investigate the effects of disclosure and identify a number of potentially moderating factors, including cognitive capacity, time constraints, explicitness of disclosure, and accuracy incentive. They find that highly accessible but invalid inferences are hard to correct with disclosures. Consumers must be motivated (i.e., engaged in detecting potential risks) and capable (i.e., able to attend to the message without distraction) of both encoding and utilising the corrective information. Disclosure is supposed to clarify ambiguous and misleading information in the advertisement. In theory, such disclaimers can ease concerns over one particular claim and increase susceptibility to other questionable claims in the same advertisement. For example, if an advertisement discloses that a promotional price is for qualified customers only, but hides the information that the price is for selected models, consumers may infer that the disclosure makes the whole advertisement more trustworthy. As a result, this halfdisclosure may actually increase consumer susceptibility to other misleading elements in the advertisement. Corrective Advertising Corrective advertising has been compared to a public confession of sin (Cohen, 1972). The intended effect is to correct false beliefs due to exposure to a previous misleading advertisement. A number of studies have supported that a corrective advertisement can reduce some false product beliefs if comprehended correctly (e.g., Bernhardt, Kinnear, & Mazi, 1986; Mizerski, Allison, & Calvert, 1980). But the effectiveness is conditional, depending on the message strength (Dyer & Kuehl, 1974), publicity context (Nkonge, 1984; Tyebjee, 1982), and prior brand evaluation (Johar, 1995). In addition to the intended corrective effects, this regulatory remedy can have unintended consequences. A well-documented unintended effect is the so-called spillover bias (Darke & Ritchie, 2007; Darke et al., 2008). A corrective advertisement usually targets a limited number of product attributes, such as price and performance. Such an advertisement may influence consumer perceptions of other attributes of the product in question, as well as the brand in general. Moreover, the negative effect can carry over not only to other products of the deceptive advertiser, but also to unrelated claims from other advertisers. Such a generalised bias or distrust can be hard to neutralise unless credible independent third-party sources are involved (Darke et al., 2008). Summary: Corrective advertising and disclosure can reduce consumer susceptibility to deceptive claims when the messages are adequately utilised. The literature suggests that such regulatory remedies may lead to intended effects that protect consumers from being misled, and some unintended

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The Marketing Review, 2011, Vol. 11, No. 3 effects that hurt other product attributes of the same brand or even thirdparty brands. Meanwhile, much remains to be learned about the underlying mechanisms whereby consumers process the remedial messages and how they utilise such information in response to deceptive claims and other related but non-deceptive claims. Public Policy The literature suggests that consumers can be misled not only by false or incomplete claims, but also by implications. Consumers may acquire false beliefs easily, even if the literal claims are true. In reality, regulatory guidelines may not specify all the nuances in various forms of deceptive claims. In that sense, proactive education and consumer self-protection play an important role as well as the after-the-fact legal punishment of deception. Regulators can use diverse media channels to inform consumers about what kinds of claims are deceptive and how to recognise them. For example, the Consumer Sentinel Network (CSN) reported a total of 725,087 fraud-related complaints in 2010 alone, with 60% of those complaints involving contacts initiated by marketers (FTC, 2010b). Such outlets can be utilised not only to monitor deceptive claims in the marketplace, but also to prevent more consumers from being deceived. Regulators should be aware that the characteristics of deception remedies (e.g., wording, format, placement, duration) may be just as confusing to consumers as the messages they are designed to clarify. Consumers are often not careful enough to notice, process, and utilise corrective information. Meanwhile, they sometimes over-interpret the remedial information and make biased judgments beyond what regulators intend. The challenge is to find a delicate balance to correct misperceptions but also to avoid creating more confusion or incorrect inferences in the minds of consumers. Regulators might consider empirical copy tests with small groups of targeted consumers in order to evaluate the likely impact carefully before implementation. As for affirmative disclosure, the requirement for disclaimers to be added to the advertisement does not guarantee effectiveness. Regulators might develop policies to increase the chance that consumers will actually comprehend disclaimers, not merely to mandate the material facts to be disclosed. For example, in some British supermarkets, traffic light food labels are displayed on the front of the package. The labels use red, yellow, and green circles to indicate how healthy products are with respect to total fat, saturated fat, sugar, and salt (Cendrowicz, 2010). These labels encourage consumers to become more attentive and think more carefully about the nutrition in the foods they purchase. Moreover, current disclosure guidelines tend to avoid overly explicit wording, which may leave loopholes for advertisers to circumvent regulations. For example, the FTCs Guides Concerning the Use of Endorsements and Testimonials in Advertising (2009) states: If the advertiser does not have substantiation that the endorsers experience is representative of what consumers will generally achieve, the advertisement should clearly and conspicuously disclose the generally expected performance in the depicted circumstances, and the advertiser must possess and rely on adequate substantiation for that representation.

Xie & Boush How susceptible are consumers to deceptive advertising? Accordingly, an advertiser may comply if only the general expectation is met. To make the requirements more stringent, regulators might ask advertisers to substantiate the disclosure effect by showing that consumers comprehend the remedial information and correct any initial misperceptions. Future Research First and foremost, future research could define deceptive practices more precisely. One major issue is that existing definitions, especially legal definitions, have not included the advertisers intention to deceive. This kind of negligence makes sense because the legal burden of establishing intent is avoided, but the definitions need to be reconciled with the central role of intent in behavioural and lay theories of deception (Boush et al., 2009). Indeed, consumers almost certainly consider advertisers intentions. Some may wonder whether claims are crafted to deceive them deliberately, or if the holes in the claims are due to technical constraints. For instance, some advertisements do not provide any justification of catchphrases (e.g., better ingredients, better pizza) in the advertisement. Consumers reactions may differ when they think advertisers intend to hide material information, compared to when they think such an omission is a practical norm. If the latter is true, consumers may not consider such claims deceptive. Another concern is the notion of reasonable consumers. U.S. regulations evaluate a potentially deceptive advertisement from the point of view of a typical reasonable consumer. Current policies have set restrictions to prevent advertisers from actively seeking mentally challenged consumers (e.g., accident victims, patients with serious diseases) because they may not be in the best mind to process advertising claims. In practice, many challenges still exist: What is reasonable based upon? How many reasonable consumers must be misled? Is reasonable dispositional or situational? What if a typically reasonable consumer becomes unreasonable occasionally? Researchers have had some conceptual discussions (e.g., Attas, 1999; Miller & Stiff, 1990; Scammon & Semenik, 1983), but very few empirical studies have investigated this issue. More research could explore how to define and measure reasonableness, and under what situations consumers act more or less reasonably in response to a potentially deceptive advertisement. A related issue is how to operationalise consumer susceptibility. One well-known controversy is about the n % problem (Ford & Calfee, 1986; Jacoby & Small 1975; Mazis, 2001; Scammon & Semenik, 1983), that is, what percentage of exposed consumers must be misled? Are they always susceptible to deceptive claims, or only occasionally? Or are some of them susceptible to certain types of claims only? To date, researchers have not reached a consensus about any particular threshold. According to Russo et al. (1981), the percentage must be judged against particular standards for each claim, not a universally applied cut-off point. Future research can compare susceptibility based on situational and dispositional differences to explore the range of the moving target. Second, another regulatory concern is consumer injury - the experienced or anticipated harm due to being deceived by an advertisement. Researchers and regulators may experience technical difficulties in proving, quantifying, and projecting the harmfulness of deception. Very few empirical studies

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The Marketing Review, 2011, Vol. 11, No. 3 have examined consumer perceptions related to the severity of anticipated consequences. Exceptions can be found in related subjects such as riskperceptions of side effects (Cox, Cox, & Mantel, 2010; Cox, Cox, & Zimet, 2006). This could be a fruitful path for future research given the enormous range in outcomes of deception for consumers (e.g., negative, neutral, or positive). Third, the literature also suggests the possibility that some consumers can knowingly and willingly give up mental defensiveness against deception. For example, some may trust certain types of claims or brands regardless of potential deceptiveness. The underlying psychological mechanisms can be ascribed to motivated reasoning (Agrawal & Maheswaran, 2005; Kunda, 1990; Mello, Macinnis, & Stewart, 2007). This research suggests that people may pay more attention to the desired aspects of an advertisement and less to potential deceptiveness. Deceptive claims can sometimes be very effective because they evoke strong wishful thinking and unrealistic desires that undermine defensiveness. Even when consumers are suspicious, their purchase intention may still be strong if the claimed product benefits are highly desirable. Lastly, prior research has centred on verbal or written forms of deceptiveness. Empirical studies have not fully addressed potentially deceptive claims combined with graphical and sensory elements, with only a few exceptions (LaTour & LaTour, 2009; Miniard, Lord, Dixon & Rao, 1991). With todays digital design and computer animation technologies, these practices have become more commonplace. For example, a fast-foodchain commercial could create artful portrayals using colour and lighting to enhance the foods visual appeal artificially, in addition to verbal claims. In a similar vein, existing research mainly has addressed deceptive practices in traditional media such as TV commercials, print advertisements, and labelling. In the new era of internet-search-based advertising and advertising in the social media, marketers have developed some creative but also devious techniques. For example, companies may hire marketing or public relations agencies to fabricate positive reviews on rating or social network websites. More research is needed to address these emerging issues. Conclusion The literature suggests that deceptive advertisers can gain advantages over consumers by manipulating or exploiting consumer perceptions. This article describes specific ways that consumers can be susceptible to deceptive claims, based on a comprehensive review of the experimental research literature over the past thirty years. In short, consumers can be highly susceptible when (1) situational and dispositional constraints impede their ability to discern claims that are false or omit material facts, (2) the literal claims may be true but the implications evoke erroneous inferences, and (3) the remedial information is not adequately utilised to correct initial false perceptions. The empirical findings may be useful for researchers and regulators to develop better knowledge about the conditions under which consumers are more likely to be deceived. This stream of research may be helpful to improve public policies in order to protect consumers better.

Xie & Boush How susceptible are consumers to deceptive advertising? This article discusses some of the voids in the literature in order to encourage more fruitful future research. One of the most pressing issues is how to define deception and susceptibility more precisely, considering the role of advertisers intention to deceive, consumer reasonableness, and the experienced or anticipated harmfulness. Moreover, the proposed regulatory remedies should be evaluated carefully prior to implementation in order to maximise corrective effects but also to minimise unfair biases. Lastly, regulations alone cannot sufficiently protect consumers. Research therefore needs also to inform those non-regulatory efforts to assist consumers in developing and applying techniques to protect themselves against deceptive practices. This article aims to promote more in-depth discussion and research on these remaining important issues. References
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About the authors and correspondence Guang-Xin Xie (PhD, University of Oregon, 2009) is Assistant Professor of Marketing at the College of Management, University of Massachusetts Boston. Dr. Xies research interests focus on persuasion knowledge and marketplace deception.

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The Marketing Review, 2011, Vol. 3 Corresponding Author: Guang-Xin Xie, Assistant Professor of Marketing, College of Management, University of Massachusetts Boston, 100 Morrissey Blvd., Boston, MA 02125, USA E vincent.xie@umb.edu David M. Boush (PhD, University of Minnesota, 1988) is Gerald B. Bashaw Professor of Business and the Associate Dean for Administration at the Lundquist College of Business, University of Oregon. Dr. Boushs research has been published in the leading marketing journals including Journal of Consumer Research, Journal of Marketing Research, Journal of the Academy of Marketing Science, and Journal of Public Policy & Marketing. He has recently published a book on marketplace deception (with Peter Wright and Marian Friestad), titled Deception in Marketplace: The Psychology of Deceptive Persuasion and Consumer Self-Protection, New York: Routledge, 2009. David M. Boush, Gerald B. Bashaw Professor of Business, Associate Dean for Administration, Lundquist College of Business, University of Oregon, 1205 University of Oregon, Eugene, OR 97403, USA E dmboush@lcbmail.uoregon.edu