The effects of the FTC-mandated disclosure on homeopathic product purchase intentions and efficacy perceptions

Abstract Over-the-counter homeopathic products are gaining market share in the United States as consumers are looking for alternatives to conventional medicines. However, most objective scientific evidence does not support the efficacy of these products. Therefore, the U.S. Federal Trade Commission recently issued an Enforcement Policy Statement mandating that an information disclosure be included in homeopathic advertisements to counteract unsubstantiated claims made by manufacturers. To evaluate the effects of these disclosures, we offer explicit hypotheses grounded in marketing and advertising theory and literature. Findings from four experiments suggest that the information disclosure in these advertisements reduces perceived efficacy, which in turn, decreases product purchase intentions. These findings support predicted mediation effects. However, the effect on purchase intentions is attenuated among consumers who have previously used the products. Results offer insights for advertising researchers, product marketers, and policy makers on the effectiveness of information disclosures on alternative medicine advertisements.