Capitalizing on Our Faults:

Examining the Effectiveness of Mea Culpa Advertising

Matt Shaner, The University of TennesseeNawar Chaker, The University of TennesseeAnton Fenik, The University of Tennessee

Capitalizing on Our Faults: Examining the Effectiveness of Mea Culpa Advertising

Abstract

Keywords: mea culpa, comparative advertising, trust, reference framing, loyalty

Mea culpa ads are ads which implicitly or explicitly admit to wrongdoing or poor product

quality, while promising to improve in the future. In this article, we examine the effects of mea

culpa advertising, including mediating mechanisms and a moderator of the mea culpa ad to

attitudinal and behavioral outcomes. Specifically, we conduct three experiments in which trust,

reference framing effects are shown to mediate the effectiveness of mea culpa ads. Further, we

show that preexisting loyalty toward the product being advertised negatively moderates the direct

and mediated relationships with attitude toward the ad, attitude toward the brand and purchase

intentions.

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Imagine the following scenario: A firm decides to radically overhaul its product in

response to consumer dissatisfaction with the quality of its offerings. It runs a series of ads

essentially acknowledging the historically poor quality of the product and pledging to listen to

the voice of the customer and promising to do a better job in the future. Such brutal honesty and

willingness to castigate one’s own product shouldn’t be surprising given the rate at which market

changes are accelerating (Day 2011). Marketers are employing an ever-changing arsenal of

tactics, ad campaigns and messages to consumers to try to encourage loyalty among existing

customers while attracting new ones to increase market share (Kumar and Shah 2009).

There are several prominent examples of U.S. firms that have adopted this mea culpa

approach in their advertising campaigns. Domino’s Pizza launched a promotion in which they

quoted particularly unhappy customers’ comments about the poor quality of their current product

as the “worst excuse for a pizza I ever had” (Farhi 2010). JC Penney launched a new retail

pricing strategy in early 2012, and ran an ad campaign in which they acknowledged the

frustrating nature of their high-low pricing strategy and frequent sales promotions, promising a

better customer experience with the arrival of their everyday low prices (Wong 2012). JC Penney

has even recently appeared in the news with another ad campaign apologizing to customers and

pleading for them to come back (Fox 2013). This comes just one month after the ousting of

former CEO Ron Johnson, whose changes resulted in 50% loss of shares of the company and a

$427 million loss in the fourth quarter. The recent ad acknowledges the mistakes made during

the Johnson-era and promises to make changes, stating “it’s no secret: recently J.C. Penney

changed. Some changes you liked, and some you didn’t… but what matters with mistakes is

what we learn.” Fast-food restaurants, airlines, retailers, and even professional sports teams have

begun adopting this strategy in recent years as well (Farhi 2010). The Chicago Bears, after a

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lackluster 2009-2010 season, ran advertisements acknowledging that their on-field performance

was less than stellar and vowing to their fans to do better the next season. In all of these cases,

marketers have displayed a willingness to castigate their own offerings, coupled with a promise

to improve in the future, in an effort to increase market share, win back disappointed customers,

and attract new customers.

According to Olsen et al (2008), a self-comparative ad is an advertisement which

“promotes a superior product offering by contrasting it with a prior or current product under the

same brand name.” In this course of research we explore a related, but slightly different version

of self-comparative ads, mea culpa ads (Farhi 2010), which are a sub type of self-comparative

ads. For this paper, we focus on one significant difference. In contrast to self-comparative ads,

mea culpa either implicitly (or directly) admits to previous wrongdoing or to poor delivery of

quality on the part of the product featured in the ad. While the difference is somewhat nuanced,

the theoretical implications of how such ads are likely to influence corporate credibility and

brand trust make this an important distinction. We assert most firms that release incremental

upgrades to their products and services implicitly engage in self-comparison advertising, but that

consumer response to these ads should be different than the response to mea culpa advertising.

Self-Comparative ads may have mixed effects with consumers. On one hand, it may be a source

of frustration and negative affect for customers who purchased an “older” version of a product,

which becomes outdated when new versions are released. On the other hand, product upgrades

might serve as an innovativeness cue for customers, signaling the firm managing the focal

product is working to improve the quality of its offerings (Boonea et al. 2001).

In contrast, we view mea culpa advertising as admission of guilt in the public sphere by

the advertiser, as if to say, “Previous versions of our products were of low quality or

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undesirable.” Mea culpa ads differ from simple self-comparative advertising, which, in past

research has not included an admission of poor previous product quality or desirability.

Mea culpa advertising has appeared in several salient advertising campaigns in recent

years, yet the direct effects of this approach are not well-understood. Furthermore, the benefits

and boundary conditions of competitor-comparison advertising have been fairly-well established

in the literature (Choi and Miracle 2004; Grewal et al. 1997; Shao et al. 2004). Extant literature

has not investigated the boundary conditions of self-comparative advertising in general and mea

culpa advertising in particular. In this paper, we focus on several important questions related to

the effectiveness of mea culpa ads:

1. What are the direct effects of mea culpa ads on consumer attitudes and behavior (attitude

toward the brand, attitude toward the ad, and purchase intentions)?

2. What are the mechanisms that mediate the relationship between mea culpa ads and

consumer outcomes (attitude toward the brand, attitude toward the ad, and purchase

intentions)?

3. How do mea culpa ads differ from ads that simply communicate product improvements,

without disparaging prior product quality or performance?

4. Does pre-existing loyalty to a product affect how a customer responds to mea culpa ads?

Conceptual model and Propositions Development

In this section we develop a conceptual model and make several propositions regarding

direct effects, mediated effects and a moderator of the relationship between mea culpa

advertising and consumer attitude towards the ad, consumer attitude towards the brand and

purchase intent. Figure 1 shows these relationships. Specifically, we posit that mea culpa ads

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result in more positive attitudes toward the ad, attitudes toward the brand and purchase intentions

through the mediating mechanisms of establishing trust and manipulating consumers’ frame of

reference for making judgments about the advertised products. We also theorize that the loyalty

moderator will negatively impact all of the above stated relationships.

<Insert Figure 1 about here>

Direct Effects of Mea Culpa Advertising

Many scholars have investigated the effects of comparative advertising, hereafter referred

to as competitor-comparative advertising, which presents a focal brand or product in favorable

comparison to competitors’ products (Choi and Miracle 2004; Grewal et al. 1997; Meirick 2002;

Olsen et al. 2008; Shao et al. 2004; Thompson and Hamilton 2006). Although there has been

some debate as to the efficacy of comparative advertising, a meta-analysis by Grewal et al.

(1997), found that competitor-comparative ads generally create more attention to the ad, greater

awareness of the brand and the advertising message, attitudes that are more favorable toward the

brand being advertised and greater purchase intentions. We propose that mea culpa ads are kind

of comparative advertising, self-comparative advertising (Olsen et al. 2008), and the outcomes of

mea culpa ads should be similar to competitor-comparison ads – attitude toward the ad, attitude

toward the brand and purchase intentions.

Grewal et al. (1997) also found that, while competitor-comparative ads had a positive

effect on purchase intentions, they had a negative effect on attitudes toward the ad, suggesting

that such advertising had the effect of communicating the desired message about relative value,

but did so in an irritating way. We postulate that ads using self-comparison in a mea culpa

fashion may give advertisers the best of both worlds – inducing positive attitudes toward the ad

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and toward the focal product and increasing purchase intentions without eliciting negative affect

through competitive or contentious statements about other brands. Thus, formally stated:

P1: Mea culpa ads will result in (a) more positive attitudes toward the brand, (b) more

positive attitude toward the ad, and (c) greater purchase intentions than ads that

communicate product upgrades, or competitor-comparative ads.

Much of the literature that has examined the effects of competitor-comparative

advertising has explored the boundary conditions that exist for the positive effects of

comparative advertising. It is to this topic that we next turn in our conceptual development of

self-comparative ads.

The Mediating Effect of Reference Point Framing

Reference point framing refers to the tendency of individuals to respond differently to the

same information, depending on how it is framed (Malhotra and Bazerman 2008; Tversky and

Kahneman 1986) and the anchors, or social norms, used to make judgments about received

information (Woodruff et al. 1983). An example of this would be a home seller who accepts a

less-than-asking-price offer from a prospective buyer, after receiving an extreme low-ball offer.

In this case, the extreme low-ball offer serves as a frame of reference against which a higher, but

still less-than-asking-price offer looks more attractive. The concept of framing an exchange

partners’ transaction or experience expectations has been explored in a variety of contexts in

academic business literature. Areas of inquiry have included consumer behavior (Tversky and

Kahneman 1986; Woodruff et al. 1983), advertising and public relations (Hallahan 1999; Keller

1991; Vakratsas and Ambler 1999), personal selling (Castleberry and Shepherd 1993), and

negotiations (Malhotra and Bazerman 2008).

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Malhotra and Bazerman (2008) discuss these reference point effects in a negotiation

context: “negotiators look for assistance in making judgments regarding the value of an item, and

this assistance often comes in the form of salient reference points on which to focus” (p. 519).

Similarly, individuals exposed to advertising may look for reference points against which to

judge the information being processed in an attempt to determine if elaboration is needed or if a

judgment can be rendered about the content (Petty and Cacioppo 1986; Petty et al. 1983). These

anchors and perceived norms as points of comparison can drive brand performance judgments

(Kahneman 1992; Woodruff et al. 1983).

According to Kahneman (1992), “One of the important implications of framing effects is

that people are usually unaware of the possibility that their views of a problem might change

with a different formulation” (p. 305). Extending this notion to an advertising context, framing

effects of ads are posited to exert a subconscious influence on consumers in the way they

interpret information and make judgments about advertised products.

Stated differently, we propose mea culpa ads change the point of reference from the

quality of the focal product in relation to competitors’ products to the quality of the focal product

in relation to low-quality versions of itself. As such, we suggest that this same framing effect,

found in mea culpa ads, can improve the overall perception of the focal brands’ quality, as well

as increasing purchase intentions, by limiting the points of comparison consumers make with

potentially higher-quality comparisons. In effect, other options, particularly competitors’

offerings, are framed out of the criteria against which consumer judgments are made.

The framing effects of advertising are also consistent with a similar concept, the principal

of asymmetric dominance (Bettman et al. 1998; Huber et al. 1982), which states that price being

equal, less attractive options will make similar options look more attractive. In the same vein, we

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suggest that less attractive versions of products will enhance their more attractive counterparts.

For example, a professional sports team with a .500 winning record, may use last season’s losing

record as a reference point in attempt to make the current season seem more palatable to fans,

even when compared to other rival teams that have greater than .500 win/loss records.

Based on the preceding arguments, we theorize that, mea culpa advertising should serve

to limit the frame of reference consumers use to make comparisons and subsequent judgments

about product quality, resulting in more favorable attitudes toward the ad, toward the product and

more positive purchase intentions. Formally stated, we postulate the following:

P2: The positive relationship between mea culpa ads and consumer outcomes will be

mediated by the degree to which the ads create a frame of reference that enhances the

focal product compared to prior versions of itself and impedes comparison to

competitors’ products.

The Mediating Effect of Corporate Credibility (Trust)

The concept of credibility is generally considered when researchers and marketers

discuss the impact of advertisements. Research has referred to credibility as the extent to which a

source (e.g. print advertisements) is detected as having expertise relevant to the communication

message and whether this message can be trusted (Belch and Michael ; Goldsmith et al. 2000;

Lafferty and Goldsmith 1999; Ohanian 1990). Corporations should not take the idea of

credibility lightly, as its credibility can be harmed when consumers suspect inferior products,

corporate lies or reports of legal and ethical violations (Fombrun 1996; Lafferty et al. 2002).

Keller et al. (2011) have defined firm corporate credibility as the degree of belief a

consumer has in the firm’s ability to design and deliver products and services that satisfy

consumer needs. Expertise and trustworthiness are stressed as vital elements of corporate

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credibility. The expertise of the communication is determined from one’s knowledge of the

subject, while trustworthiness is associated with the honesty and believability of the source

(McGinnies and Ward 1980). In their study of adult consumers’ perceptions advertisements,

Goldsmith et al. (2000) showed that corporate credibility influences a consumer’s attitude-

towards the ad, attitude-towards the brand and purchase intentions.

In the case of mea culpa ads, firms try to reconcile and improve their corporate credibility

by self-admitting shortcomings and emphasizing improvements. For our analysis of these ads,

the element of expertise within the notion of corporate credibility might not be as applicable to

these types of ads and as a result we will focus on only the element of trustworthiness.

Trustworthiness

Trust is an important construct that has been studied in a variety of contexts across the

disciplines of marketing, management, law, communications, sociology, psychology and

economics (Cowles 1997; Fisher et al. 2010). In the contexts of marketing and consumer

behavior, trust is found to be a key factor that consumers use for making purchase decisions

(Morgan and Hunt 1994). As a result, it becomes important to consider the role of trust,

specifically the trust of a brand or firm, when using mea culpa advertisements to communicate

with consumers.

In their seminal piece, Morgan and Hunt (1994) mention that trust exists “when one party

has confidence in an exchange partner’s reliability and integrity” (p. 23). Regarding particular

brands, brand trust occurs when consumers have confidence that the brand, product or service

firm is dependable and competent (Herbst et al. 2012). When firms use mea culpa

advertisements, they hope to establish and confirm that they had previously “missed the mark”

and that their brand’s prior reputation should be disregarded as their improved products and

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services are more dependable and reliable. Another aspect of brand trust is that it reduces

uncertainty and perceived risk (Chaudhuri and Holbrook 2001; Fisher et al. 2010; Morgan and

Hunt 1994). As such, the use of mea culpa ads is a way for previously tarnished firms to

acknowledge the negative associations with their brand by reducing risk by affirming consumers

that quality of the product has improved. Hence, trust can be used to predict perceptions of brand

credibility (Erdem and Swait 2004) and brand loyalty commitment (Chaudhuri and Holbrook

2001; Garbarino and Johnson 1999; Herbst et al. 2012).

Marketers have understood the importance of brand trust, and as a result have attempted

to find ways to show consumers that the brand can be trusted. Wang et al. (2004) suggest that

firms use cue-based trust to signal trustworthiness to customers. Recent research has explored

ways firms have used signal trustworthiness as cues to customers; including ads that use

disclaimers (Herbst et al. 2012), ads that focused on business tenure and local ownership (Fisher

et al. 2010), and the use of virtual-advisor technology in websites (Urban et al. 2000). Thus, we

posit that mea culpa ads serve as a cue-based trust signal that firms use to communicate with

consumers. Further, consumers will use such cues as a heuristic to evaluate the trustworthiness of

the brand (Herbst et al. 2012). In evaluating mea culpa ads, we assume that consumers will form

attitudes about the product being advertised, about the product itself and overall purchase

intentions through the mediating mechanism of trust. Firms utilizing mea culpa ads hope to send

consumers trustworthiness cues in an effort to enhance consumer trust, and ultimately attitudes

that lead to consumer purchase intentions. The result of this should ultimately lead a firm to

increase market share and profits.

Based on this, we postulate that trust in the firm will be the mediator between the

outcome of mea culpa ads and attitude towards the ad and purchase intentions. That is, a positive

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relationship exists between mea culpa ads and attitude toward the ad and purchase intentions that

is mediated by trust in the firm. More formally,

P3: The positive relationship between mea culpa ads and consumer outcomes will be

mediated by the degree of corporate credibility, and subsequently, trust, that self-

comparative ads engender among consumers.

The Moderating Influence of Pre-Existing Loyalty

Thus far, our conceptual framework has described the mechanism through which mea

culpa ads could be effective at increasing consumers’ attitude toward the ad, attitude toward the

brand, and purchase intentions through framing the point of comparison consumers use to make

subjective judgments about quality and fostering a sense of corporate credibility and trust in the

focal brand’s company. This section proposes a potential moderator – consumers’ level of

customer loyalty prior to exposure to a mea culpa advertisement.

In order to begin to understand the moderating role of customer loyalty to the exposure of

a mea culpa advertisement, we need to first define loyalty. Firms and consumer marketing

researchers have long regarded loyalty as an important goal (Reichheld and Schefter 2000; Yang

and Peterson 2004), acting as a major source of sustained growth and profit and as a valuable

asset (Anderson and Mittal 2000). Prior research has linked customer loyalty with satisfaction

(Bloemer et al. 1999; Oliver 1999; Yi 1990), perceived value (Woodruff 1997; Yang and

Peterson 2004), brand attitudes (Chaudhuri and Holbrook 2001; Keller et al. 2011; Suh and Yi

2006), and repeat purchase frequency (Jacoby and Chestnut 1978; Neal 1999; Newman and

Werbel 1973; Oliver 1999; Tellis 1988). Loyalty has also been viewed both from an attitudinal

perspective (i.e. specific desire to continue a relationship, see Czepiel and Gilmore 1997) and a

behavioral view (i.e. repeat patronage, see Neal 1999). Oliver (1999) elaborated on his earlier

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definition of loyalty by taking into account the act of consuming to describe loyalty as “a deeply

held commitment to rebuy or repatronize a preferred product/service consistently in the future,

thereby causing repetitive same-brand or same brand-set purchasing, despite situational

influences and marketing efforts having the potential to cause switching behavior” (p. 34). Dick

and Basu (1994) describe customer loyalty as “the strength of the relationship between an

individual’s relative attitude and repeat patronage” (p. 99). For this study, we will divert our

attention to individuals’ attitudes towards a brand and repeat purchase frequency as the major

components of brand loyalty.

A consumer’s intention of repeat purchase is usually determined by the attitude towards

the brand (Ajzen and Fishbein 1980). For example, a consumer might continue to buy their

favorite brand of jeans because of a positive attitude towards that brand. Research has also found

that consumer attitudes towards a brand can change through direct and indirect customer

experiences (such as advertising) (Berger and Mitchell 1989; Suh and Yi 2006). For this reason,

many firms have focused heavily on providing consumers with various exposures in order to

cultivate these experiences. The way these experiences are formed will depend on the how the

messages and stimuli are presented (Priester et al. 2004; Suh and Yi 2006). Mea culpa

advertisements act as those messages that create indirect stimuli. It has been found that

advertising forms brand beliefs and feelings (MacKenzie et al. 1986; Olney et al. 1991; Suh and

Yi 2006). When a firm uses mea culpa advertisements, they are providing messages to

consumers attempting to reaffirm and establish a favorable and strong association with the firm’s

products (Keller et al. 2011). However, the message may be ill-received and misinterpreted by

loyal consumers, who will find this message to be incongruent with prior belief. That is, even

loyal customers can be vulnerable to situational factors (e.g. mea culpa advertisements) (Oliver

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1999). This incongruent belief can result in a negative change of brand attitude and subsequently

impact purchase intentions (MacKenzie et al. 1986).

In their exploration of consumer responses to self-comparative ads, (Olsen et al. 2008)

found that consumers who had recently purchased a product then were exposed to advertising

downplaying the product in favor of an upgraded version, experienced a decreased level of trust

in the advertiser. They described consumers as being left with a sense of decreased trust and

feelings of “betrayal” by the advertiser. Further, they found that those consumers that had not

previously purchased the focal product, when exposed to a self-comparative advertisement for

that product, were more likely to consider purchasing the product.

The Dick and Basu (1994) framework suggests that increasing clarity and confidence of a

relative attitude toward an offering, should result in enhanced loyalty for that offering. Therefore,

we posit that mea culpa advertising creates less clarity, incongruence and decreased confidence

for the attitudes of loyal customers, resulting in decreased brand loyalty. In other words, in the

case of mea culpa advertising, we expect consumers’ level of pre-ad exposure loyalty to

negatively moderate attitudes and purchase intentions. Alienating already-loyal customers by

telling them the products to which they are loyal were somehow undesirable to begin with is

likely to produce feelings of betrayal and product information incongruence with loyal

customers’ self-concept in relationship to the focal product in the ad. Formally stated, we posit

the following:

P4: A consumer’s level of pre-existing loyalty to the focal product will negatively moderate

the (a) direct effect of self-comparative ads on consumer attitudes and intentions, (b) the

mediating effect of reference point effects, and (c) the mediating effect of corporate

credibility.

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Discussion

Mea culpa advertising serves as a cue to consumers that the advertiser recognizes and has

responded to the poor quality of the focal product. The admission of fault should give consumers

more trust in the product and faith in the credibility of the firm and its ability to deliver on its

promise to improve. Using prior failures as a frame of reference repositions the company and

product in the consumer’s mind, paving the way for a positive attitude toward the improved

version of the focal product.

The framework provides insights and implication to researchers. The next study should

incorporate an empirical test of the proposed framework. Experiments could be conducted to

quantitatively test the theory and provide the necessary statistical support. Armed with a better

understanding of how mea culpa ads, impact purchase intentions and attitudes, research into

other impacts of apology advertising can be conducted. For example, future research might

examine what other cues consumers might use to make judgments about sincerity in a mea culpa

ad. Future research might also explore additional mechanisms that mediate consumer attitudes

and purchase intentions resulting from mea culpa ads. Comparison research on mea culpa

advertising and competitor position advertising is needed to provide a deeper understanding of

attitude towards the brand and purchase intentions when product improvements are made.

Finally, future research should focus on the lasting effects of mea culpa advertising to determine

if these effects are short-lived, or if their influence on attitudes and purchase intentions has

staying power.

This research has practical implications for practitioners, as well. While we explore the

mediating mechanisms through which mea culpa ads function, perhaps the most important

practical implication of this research for advertising managers is to consider the level of their

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customers' preexisting loyalty. In an effort to grow market share, mangers who adopt mea

culpa advertising strategies, may inadvertently damage their firms' relationships with already

loyal customers. As such, managers should use caution in adopting this approach as it may

simply create new customers at the expense of existing ones, with little (or negative) gains in

market share.

The framework also provides support and encouragement for practitioners.

Understanding the importance and impact of advertising truths should encourage more

companies to be honest and open with consumers when product changes are made. Knowing that

consumers will have greater trust in the company and product as well as more intention to

purchase is encouraging. Caution should be exercised, however, as advertisements should be

communicated in a way that encourages non-loyal customers to purchase, without isolating

already-loyal customers.

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Figure 1

Direct, Moderated, and Mediated Effects of Mea Culpa Ads

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Mea Culpa Ads

Reference Framing

Corporate Credibility

(Trust)

Pre-Existing Loyalty

Outcomes

• Attitude Toward the Brand (Ab)

• Attitude Toward the Ad (Aa)

• Purchase Intention (PI)

P1a, b, c (+)

P2 (+)

P3 (+)

P4b (-)

P4c (-)

P4a (-)

24