Quality Certificates Alleviate Consumer Aversion to Sponsored Search Advertising

Xiang Hui, Meng Liu and Raphael Thomadsen

No 9886, CESifo Working Paper Series from CESifo

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

Keywords: sponsored search advertising; quality certificates; e-commerce (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (2)

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