Fake News, Real Problems for Brands: The Impact of Content Truthfulness and Source Credibility on Consumers' Behavioral Intentions Toward the Advertised Brands

The presence of fake news via Internet media compels researchers and practitioners to understand the consequences of this phenomenon on marketing activities. Surprisingly, no marketing study to date has analyzed the effect of fake news on consumers' evaluations of a brand advertised on the same webpage. To fill this gap, this study empirically investigated whether individuals' perceptions of fake news transfer to an adjacent brand advertisement. Specifically, we manipulated news truthfulness and source credibility, observing the change in individuals' responses while distinguishing between objective truthfulness and the perceived credibility of the news. The results confirmed that the news' objective truthfulness exerts no direct effect on behavioral intentions toward the brand (i.e., intention to purchase, spread word-of-mouth, or visit the brand's store). However, we did uncover a chain of effects whereby the impact of fake news on behavioral intentions was fully mediated by people's perceptions of the news' credibility, which affected the perceived credibility of the sources, which then influenced brand trust, which finally translated into brand attitudes. From a managerial perspective, this study's results can partially reassure brand managers that their brand advertisements will not suffer from appearing next to fake news when the source itself is credible.