Disentangling Mixed Effects of Sponsorship Disclosure in Influencer Marketing: The Parasocial Relationship Mechanism Contingent on Brand and Influencer Characteristics

ABSTRACT Current influencer marketing literature shows mixed results regarding sponsorship disclosure's impact on consumer responses, highlighting a key research gap in defining the boundaries of sponsorship disclosure effects. To fill this research gap, this research examines the role of sponsorship disclosure in influencer marketing, the underlying mechanism, and key boundary conditions. Through three experiments, this research demonstrates that sponsorship disclosure can enhance consumers' product purchase intentions. Building on attribution theory and relevant research, the influencer‐consumer parasocial relationship (PSR) is found to be a key underlying mechanism. Furthermore, the positive effect of sponsorship disclosure via the PSR is found to be contingent on the awareness levels of the influencer and the sponsoring brand. Specifically, the positive effect of sponsorship disclosure is limited to well‐known influencers endorsing lesser‐known brands. This research contributes to the literature on sponsorship disclosure, PSRs, and influencer marketing, and offers implications for consumers, brands, influencers, and policymakers.