How do consumers respond to influencer discount codes? Insights from covert advertising processing

Purpose Drawing on the covert advertising recognition and effects (CARE) model, this study aims to examine how influencer discount codes serve as content-driven cues that interact with sponsorship disclosures to influence advertising recognition and persuasive outcomes. Design/methodology/approach The present study performed a 2 (discount code: absent vs. present) × 2 (sponsorship disclosure: absent vs. present) between-subjects online experiment. A total of 353 participants were recruited on Amazon MTurk and randomly assigned to one of the four conditions. After viewing their assigned Instagram page, participants completed a questionnaire. Findings Presenting the discount code in influencer content enhanced advertising recognition. Moreover, there was a significant interaction between discount codes and sponsorship disclosures. When the disclosure statement was present, participants generated a high level of advertising recognition regardless of the presence of discount codes. However, when the disclosure was absent, participants in the discount code condition generated significantly greater advertising recognition than those in the code-absent condition. Additionally, advertising recognition negatively affected influencer trustworthiness, which in turn affected brand attitude. Originality/value This study contributes to the literature by providing empirical support for the CARE model in the context of influencer marketing. It provides a comprehensive understanding of the factors that trigger advertising recognition, taking both disclosures and content-driven cues into account. Additionally, this study enriches the literature on covert advertising by elucidating the mechanisms underlying the processing of influencer posts that contain discount codes.