Brand Protection in the Age of Fake News

Abstract

Fake news has great potential to cause damage to brand reputations and finances. Given the technical challenges of detecting fake news in time, it is inevitable that social media platforms will end up hosting fake news. The competition for attention and advertising revenue is intense. Many consumers read only the headlines. Fake news stories that mention brands in headlines can help news publishers garner social media engagement but can also hurt brands, raising concerns about brand protection. In this research, I focus on the first two stages of the information processing model – attending to information and encoding information (Berk 2018; Miller 1988).In Chapter 2, I investigate whether mentions of human and product brands are associated with news consumption and news retransmission (how brand mentions attract attention; the first stage of information processing). Using data from a news platform that generated both traditional and satirical (fake) news stories, I quantify the effects of brand mentions on social media engagement for both traditional and fake news. The analysis encompasses mentions of popular product brands, such as Apple, and mentions of human brands, such as famous politicians and actors. A framework based on uses and gratifications theory (UGT) aids in variable selection and the interpretation of results. My results imply that human brand mentions generally have a positive effect on news consumption and retransmission for both news formats, and product brand mentions affect engagement of satirical news via an interaction with news categories. Results provide further insights on the roles of sentiment, narrative style, and writing quality of news stories. The high potential of human and product brands in the headlines, especially human brands in satirical news, may be indicative of their potential to be misused by unscrupulous news media publishers. This reminds social media platforms of their responsibility to protect brands and consumers from fake news. Next, in Chapter 3, I examine the effectiveness of before-warnings (BWs) and after-warnings (AWs) in alerting consumers and reducing the persuasive influence of fake news on brand attitudes (how warning timing affects encoding; the second stage of information processing). Results reveal that for both negative and positive fake news, BWs are sometimes no more effective than no-warnings. Although BWs do encourage more critical processing of misinformation, this can distract consumers from the warning message. More importantly, Chapter 3 demonstrates a robust after-warning effect (AWE). Warning consumers after they have read fake news with AWs consistently leads to a higher reduction of persuasive influence (negative or positive) than BWs. AWs are more salient and arouse greater reactance to the false information than BWs. The resulting loss in control over how the news influenced attitudes and increased anger lead to the observed after-warning effect. News valence also matters since positive news is perceived to be more credible and processed less critically than negative news. AWs relative to BWs thus arouse feelings of being tricked when fake news is positive but not when it is negative, also leading to the after-warning effect. The findings have several theoretical and managerial implications.