The role of peer-created content in digital advertising : Perceptions of sponsored and non-sponsored recommendations on Instagram, its recognition as a product advertisement and its effects on the level of trustworthiness.

Abstract: Background: Changing interests and expectations of societies have resulted in the development of new communication and business channels. The boom of social media, allowed for a rapid exchange of beliefs, opinions and ideas. The ways of advertising products have also been changed. Once beloved, both by companies and customers, celebrity endorsement is becoming less and less popular in favor of, commonly now used, peer-created reviews. Modern enterprises increasingly use an image of an ‘ordinary’ person in their marketing strategies and the internet has seen a flourishing trend of peercreated posts and reviews. The concept of trust has been known in the literature for ages, however with new times, new angles of perception of this phenomenon appear. There is still little to none research done in the area of trustworthiness towards peer-created content, and exploring this phenomenon is the purpose of this work. Purpose: The purpose of our work is in a way twofold. First, we aim to obtain more insights on how sponsored and non-sponsored peer-created content posted on Instagram can influence consumer’s knowledge of persuasion in advertising. Second, we examine if and how the source credibility and the trustworthiness of shared content can be affected by customers awareness of the persuasion intent of sponsored texts. Method: Web-based, self-completion surveys were disseminated amongst our friends and family in order to collect the data. The analysis was done through SPSS, using the correlation and multiple regression analysis calculations. Furthermore, to deeper understand the relationships between the variables and to find possible interaction effects between them, the moderator analysis was conducted. Conclusion: The sponsored peer-created content of the post is widely recognized as a deliberate marketing activity of a company. What is more, the non-sponsored content is also being perceived as a product advertisement, however, with less conviction that in the case of the sponsored posts. A positive relationship between lack of recognition of non-sponsored posts as the product advertisements and the trustworthiness towards the content has been found, meaning that the less the content of the post is perceived as a deliberate marketing activity of a company, the more trustworthy it is to the respondent. Consequently, the more people perceive a specific post as an advertisement commissioned by the company, the less trustworthy they feel towards its content.