Consumer Response to False Information: Is Believability Necessary for Persuasion?

1. Consumer Response to False Information:Is Believability Necessary for Persuasion? Claudiu V. Dimofte Georgetown University Richard F. Yalch University of Washington May 7, 2005 Vancouver, BC

2. Outline • Crisis Management • Damage Control (Study 5) • False Marketplace Information • Negative Rumors about Company/Brand • Overselling of Product/Brand Features • The Implicit Account • Rumors • Information Processing (Studies 1, 2, 3) • Infomercials • Curious Disbelief (sic) (Study 4) • Discussion/Conclusions

3. DECEPTIVESALES RUMORS ADS/WOM CRISES

4. DECEPTIVESALES RUMORS ADS/WOM CRISES

5. Coping with Crises • Examples • Celebrities • Bill O’Reilly – sexual harassment • Michael Jackson – being weird • Pat O’Brien – alcoholic leaving obscene messages • Martha Stewart – prison time for lying • Janet Jackson – Superbowl • Paul Abdul – misbehavior with contestant

6. Damage Control • Do Nothing – Bill O’Reilly • Refutation – Michael Jackson • Apologize and Go On – Pat O’Brien • Retrieval – Martha Stewart “Apprentice spinoff” • Storage – Janet Jackson “Equipment malfunction” • Counterattack – Paula Abdul

7. Study 5: Damage Control • Goals: • Look at all damage control strategies in one experiment • Participants: • 133 undergrads from introductory GT Marketing class • Method: • Participants are exposed to news coverage on Bank of America losing customer data • Participants take IAT and provide explicit truth ratings

8. Study 5 - Stimuli • Explicit Procedure Stimuli: • Participants read web news story on Bank of America’s losing data • After short delay, they are given 6-item questionnaire about problem gravity, responsibility, BA evaluation, BA data safety, importance of apology, safety of BA vs. WF • Conditions: apology, do nothing, deny, counterattack, storage, retrieval • Implicit Procedure Stimuli: • IAT Bank of America/Wells Fargo, safe/unsafe

9. CRISIS

10. APOLOGY

11. REFUTE

12. STORAGE

13. ATTACK RETRIEVAL

14. ATTACK

15. Study 5 - Gravity

16. Study 5 – BofA’s Responsibility

17. Study 5 – Data Safe & vs Wells Fargo?

18. Study 5 – Overall Evaluation of BofA

19. Study 5 – Implicit Associations

20. Study 5 – Conclusions • Explicit Results: • Apologize: Admitting fault was generally worst strategy. • Ignore: left doubt and did not help. Second worst strategy. • Refute: slight help with most issues. • Storage: lowered perceived severity & BofA concerns. Best strategy. • Retrieval: only lowered severity but aided overall evaluation. • Counterattack: Minimized severity but kept low safety ratings. Similar but not as good as retrieval for overall evaluations.

21. Study 5 – Conclusions • Implicit Results: • Bank of America is strongly automatically associated with ‘unsafe’ in all cases except: • apology (only time better thanWells Fargo) • storage (equal to Wells Fargo) • Overall Insights: • Storage works at both levels, by turning – into + • Apology • – for explicits but + for implicits • Explicit judgments, think about why they apologized • Implicit judgments, think about BofA not the apology or safety

22. DECEPTIVESALES RUMORS ADS/WOM CRISES

23. False Negative Information • Rumors about Company/Brand • Rumors: specific propositions or beliefs passed along from person to person without any secure standards of evidence(Allport and Postman 1947) • Originate in unconscious desires that are transformed to become conscious (Rossignol 1973) • “[…] the rumor could exist at various levels of consciousness and could lead one to get a pizza or a taco without being aware of why one did so” (Koenig 1985)

24. Unfounded Rumor Examples • Corona • Mountain Dew • Procter & Gamble

25. Failing to Combat Rumors can have Severe Consequences

26. Rumor Quelling Strategies • Tybout et al. (1981): refutation does not work, use storage or retrieval strategies • Iyer and Debevec (1991): rumors are less credible when propagated by someone that can gain out of its dissemination • Koller (1992): the best way to fight rumors is to explain their rumor and lack of veracity via positive advertising • Kamins et al. (1997): rumors are generally more easily spread when they are personally relevant and favorable • Bordia et. al (2000): best way to fight rumors is via honest denial

27. Information Processing Insights • Tybout et al. (1981) • Directly refuting rumors is the least effective way to deal with them; offered two alternative strategies: • STORAGE STRATEGY: expose consumers to a secondary stimulus during encoding of rumor information, making the brand more likely to be associated with that stimulus rather than the rumor • RETRIEVAL STRATEGY: expose consumers to a secondary stimulus during retrieval of brand information, thus lessening the chance of the joint retrieval of brand and rumor

28. Information Processing Insights(cont’d) • Tybout et al. (1981) design: employed rumor of McDonald’s’ use of red worm meat in their burgers • STORAGE STRATEGY: during encoding of worm rumor information, consumers were exposed to a secondary stimulus (confederate claiming a famous, pricey local French restaurant uses tasty worm sauces) GOAL: make worm meat more desirable or more associated with French restaurants than McDonalds.

29. Information Processing Insights(cont’d) • RETRIEVAL STRATEGY: during retrieval of McDonald’s information, consumers were exposed to a secondary stimulus (questionnaire about the McDonald’s location they frequent the most) GOAL: lessen likelihood of joint retrieval of McDonald’s and worm meat rumor • REFUTATION STRATEGY: after exposure to worm rumor, consumers were exposed to McDonald’s’ claim that red worm meat is too expensive to use.GOAL: alter believability of the worm rumor

30. Tybout (1981) results

31. Information Processing Insights(cont’d) • Problem: no clear understanding of what the processing mechanisms behind these effects are • STORAGE: did it disrupt the McDonald’s – worms association or did it make eating worms more positive by relating it to French food? • RETRIEVAL: did it block the activation of the McDonald’s – worm association or inhibited its retrieval in relation to other McDonald’s thoughts? • REFUTATION: after study, subjects in all conditions showed strong disbelief in the rumor’s veracity so why were they still affected by it?

32. Explicit vs. Implicit Processing "Are you aware of the unconscious hostility you are exhibiting to us right now?“ Doctor X, Psychiatrist ”How could I be aware if it's unconscious?” Leonard, Mental Hospital patientin the movie The Awakening

33. Explicit vs. Implicit Processing • Explicit (implicit) processing: those aspects of cognition which are (un)available to the individual's conscious awareness. • The methods used to test for each differ: • explicit processing is typically examined directly, by asking individuals to evaluate their own thought processes; • implicit processing is typically examined indirectly by evaluating performance on tests that depend on thought processes that are not subject to introspection.

34. Explicit vs. Implicit Processing • Fazio et al. (1986): attitudes characterized by a strong association between the attitude object (AO) and its evaluation are capable of being activated from memory automatically upon mere presentation of AO. • Devine (1989): dissociation of automatic and controlled processes involved in prejudice • social stereotype is automatically activated in the presence of a member of stereotyped group and that low-prejudice responses require controlled inhibition thereof

35. Explicit vs. Implicit Processing • Bargh et al. (1996): stereotypes become active automatically in the presence of relevant behavior or stereotyped-group features • participants for whom an elderly stereotype was primed walked more slowly down the hallway when leaving experiment • Greenwald et al. (1998): measured individual differences in implicit cognition with implicit association test (IAT) • Bottom line: automatic cognition occurs and is driven by associations that we generally cannot control.

36. Rumor Processing: The Implicit Account • False information persuades via an unconscious route by building automatic associations between brands and the information cues in the message. • While explicitly rejecting the veracity of outlandish brand rumors, consumers lack control over the implicit associations occurring at exposure and being practiced during subsequent evaluations.

37. Study 1 - Storage • Goal: • Replicate Tybout et al. (1981) storage strategy results • Disentangle processing mechanisms behind strategy • Participants: • 229 undergrads from introductory Marketing class • Method: • Participants are exposed to rumor and secondary stimulus • Filler task for 5 minutes • Participants take IAT, then provide explicit brand ratings

38. Study 1 - Stimuli • Explicit Procedure Stimuli: • Participants read series of supposed New York Times news stories on politics, business (McDonald’s worm rumor troubles in Asia), sports, and leisure. • Half read about gourmet worm food from AsiaHalf read about house decorating. • Implicit Measures: • IAT McDonald’s/Burger-King, food-related/worm-related • IAT food-related/worm-related, pleasant/unpleasant

39. press “d” for press “k” for Worm-related Food-related OR OR McDonald’s Burger King Study 1 – Stimuli(cont’d)

40. press “d” for press “k” for Worm-related Food-related OR OR McDonald’s Burger King larva Study 1 – Stimuli(cont’d)

41. press “d” for press “k” for Worm-related Food-related OR OR McDonald’s Burger King beef Study 1 – Stimuli(cont’d)

42. press “d” for press “k” for Worm-related Food-related OR OR McDonald’s Burger King Study 1 – Stimuli(cont’d)

43. press “d” for press “k” for Worm-related Food-related OR OR Pleasant Unpleasant beef Study 1 – Stimuli(cont’d)

44. press “d” for press “k” for Worm-related Food-related OR OR Pleasant Unpleasant rainbow Study 1 – Stimuli(cont’d)

45. press “d” for press “k” for Worm-related Food-related OR OR Pleasant Unpleasant hurricane Study 1 – Stimuli(cont’d)

46. Study 1 – Explicit Results • Tybout et al. (1981) results replicate: consumers in the storage condition have higher evaluations of McDonald’s than those in the rumor-only condition: t(228) = -2.20, p < .03

47. McDonald’s -Worms Worms - Unpleasant Worms - Pleasant McDonald’s -Food Study 1 – IAT Results • McDonald’s is equally (and weakly) associated with worms in both conditions: • t(117) < 1, ns • Worms are associated with unpleasant in both conditions, but less so in storage: • t(110) = 2.34, p < .03

48. Study 1 – Conclusion & Unresolved Issue • Conclusion: the storage strategy works by minimizing the negative feelings associated with the rumor via the positive secondary stimulus • Problem: the McDonald’s – Worms IAT showed little association, even in the control condition • Stronger rumor induction may be needed (vivid images or repetition).

49. Study 2 – Retrieval vs Refutation • Goal: compare two strategies in terms of implementation delay following rumor exposure. • Method: • 113 participants exposed to rumor • Followed by secondary stimulus • Retrieval – questions unrelated to rumor • Refutation – statement why the rumor is false • Filler task for 5 or 30 minutes • Participants take IAT, then provide explicit brand ratings

50. Study 2 - Stimuli • Explicit Procedure Stimuli: • Participants read series of supposed New York Times news stories on politics, business (McDonald’s worm rumor troubles in Asia), sports, and leisure. • After short/long delay, they are given 4-item questionnaire about the McDonald’s/Circuit City they frequent, or read McDonald’s press release refuting rumor. • Implicit Measures: • IAT McDonald’s/Burger-King, food-related/worm-related