New Research Reveals the Unexpected Impact of Misinformation on Consumer Perceptions
Fake news can significantly damage a company’s reputation, even when consumers recognise the information as false, according to new research by emlyon Business School, King’s Business School, HEC Lausanne, and SRI Management Consulting.
The study found that while fake news does not directly alter personal perceptions, it influences how people think others view a company. This subconscious shift can still impact consumer trust and corporate standing.
Understanding the Influence of Fake News
The research was conducted by Marta Pizzetti, Associate Professor of Marketing at emlyon Business School, alongside Patrick Haack (HEC Lausanne), Michael Etter (King’s Business School), and Simone Mariconda (SRI Management Consulting). The team conducted three experimental studies with nearly 800 participants to assess the effects of fake news on corporate reputation.
The first study measured changes in perceptions about a company after exposure to fake news. The second study examined both perception changes and how they influenced purchasing decisions. In the third study, participants engaged in group discussions after encountering fake news, allowing researchers to analyse how collective opinions shape individual attitudes and behaviour.
Fake News and Perceived Public Opinion
The findings revealed a surprising psychological effect—people assume fake news will impact others more than themselves, yet they still adjust their views based on what they believe others think. Even when individuals are aware that the information is false, it continues to shape their attitudes towards the company.
“In today’s digital landscape, the volume and sophistication of fake news present a major challenge for organisations,” says Professor Pizzetti. “Studies show that 38% of U.S. social media users have unknowingly shared fake news. False CEO statements, misleading social media posts, and fabricated media reports can spark panic and harm corporate operations. Our research highlights how difficult it is to counteract these effects.”
Interestingly, the study also found that companies with stronger positive reputations suffer greater reputational damage from fake news than those with weaker reputations. This suggests that well-established businesses have more to lose when misinformation spreads.
Why Fact-Checking Alone Isn’t Enough
The research highlights a critical issue: fact-checking efforts and public awareness of misinformation do not necessarily reduce its impact. Even when participants knew the news was false, their views of the company remained negatively influenced. This phenomenon explains real-world scenarios such as mass stock sell-offs or bank runs that occur in response to fake news stories.
For corporate leaders, these findings underscore the limitations of traditional crisis management tactics. Simply labelling news as fake does not effectively counteract its indirect effects.
Strategies to Protect Corporate Reputation
The researchers recommend that companies adopt “social proof” strategies to reinforce their reputation. Instead of merely denying false claims, businesses should:
- Highlight positive public opinions through customer reviews and survey data.
- Secure expert endorsements to validate their credibility.
- Demonstrate strong consumer support through testimonials and engagement.
By actively showcasing trust and confidence in their brand, organisations can help safeguard their reputation against the hidden dangers of fake news.
The Ongoing Battle Against Misinformation
Ultimately, while fake news may be blatantly false, its consequences are real. Companies must go beyond debunking misinformation and take proactive steps to maintain consumer trust and brand integrity.