The Seal of Approval. Introducing the Third-Party Seal Model

Keywordsadvertising tactics marketing tactics third-party endorsement Third-party seals

JEL Classification M37

Full Article

1. Introduction

When brothers Andre and Edouard Michelin launched a guide to motoring in France in 1900 as a way to sell more tyres (Michelin, 2018), they could not have imagined what their book would become. In 1926, the guide introduced its now famous rating for the best in fine dining - the Michelin Star. Almost a century later, the guide now rates over 40,000 establishments in over 24 territories across three continents, and is beloved by diners the world over (Michelin, 2018). From “As Seen On TV” stickers on products to the promotion of environmental and societal benefits of a purchase, the use of third-party seals, verifications, recommendations, and certifications like the Michelin Star are a well-established marketing and advertising practice.

Third-party seals are intended as tools to assist consumers with the task of sorting information ‘wheat’ from ‘chaff’ (Burkell, 2014). And while the issuing of a seal can be intended as altruistic, for marketers, few tactics have the direct application of attempting to change brand perceptions or building credibility as third-party seals. With awards and certifications attempting to convey quality in comparison to alternate offerings, and health, environmental, charitable, and ethical marks attempting to display a brand’s impact on consumers and the world, third-party seals should, logically, impact consumer perceptions.

However, since first being studied more than 50 years ago (Parkinson, 1975), research has varied in reporting how effective third-party seals are in changing these perceptions, and ultimately driving purchase intent. From those finding seals to have a positive effect (for example Atkinson and Rosenthal, 2014; Bernard et al., 2015; Kamins and Marks, 1991; Kovar et al., 2000), to those finding little or no impact (for example Hu et al., 2010; Kimery and McCord, 2006; McKnight et al., 2004), and those finding results dependent on the circumstances (for example Caso et al., 2015; Orth and Krška, 2001; Viot, 2012). Currently, there is no model which attempts to not only compare the effectiveness of third-party seals to each other but also predict which are more likely to increase the likelihood of a purchase.

In this paper, I will review past literature related to third-party seals to identify what attributes effective third-party seals have compared to their less effective counterparts and use these attributes to create a model which can be used to predict seals which will impact purchase intent. This model will assist marketers in selecting third-party seals to use within brand communications, and which certifications and awards to consider applying for.

2. Literature Review

While third-party seals are used by marketers in an attempt to sell more products and services (for example Orth and Krška, 2001; Viot 2012), their intent is to act as information interfaces, helping consumers to sort information easily and effectively (Burkell, 2004). Research of third-party seals and their effectiveness at conveying information and changing perceptions by academics is approaching half a century. In 1975, Thomas Parkinson began research into the use of third-party seals by brands and was alarmed at the weight in which consumers placed on these ‘promotional tools’, calling for Governmental intervention. Research conducted in the decades since has continued to investigate consumer trust in third-party seals and the brands which display them.

While not the exclusive domains of study, since the turn of the century research has been conducted into third-party seals in the areas of internet security and e-commerce, health and nutrition, and environmental impact. Interestingly, the majority of research conducted into third-party seals has investigated brand intention (Kervyn et al., 2012). That is, a brand’s trustworthiness to handle payments, their care of the health and wellbeing of consumers, and impact on the environment.

The exact impact of third-party seals on consumer brand perception and purchase intent has varied, with no general consensus reached. This was especially evident in the explosion of online-based e-commerce in the early 2000s. During this time, researchers investigated the effect of third-party seals on building trust and consumer confidence in the new world of buying online. While widely accepted as best-practice among practitioners, research varied in its results; some studies reported that third-party seals did build trust (Kovar et al., 2000; Odom et al., 2002; Noteberg et al., 2003; Rifon et al., 2005), and others found results to be mixed or negligible (Hu et al., 2010; Kim et al., 2008; Kimery and McCord., 2006; McKnight et al., 2004; Pennington et al., 2003; Wang et al., 2004). And while research into e-commerce third-party seals has waned since its peak, similar mixed results have been seen in research related to the use of seals across other applications.

There is a general consensus that the impact of the seal is affected in several key ways; the consumer’s existing familiarity with the advertising brand, the consumer’s knowledge of and understanding of the third-party and seal, and the importance of third-party seals to the product/service category and individual consumer. These variables and their impact on the effectiveness of third-party seals was perhaps summed up best by Beltramini and Stafford (1993) who investigated the impact of third-party seals on the believability of advertising claims. The duo argues that consumers didn’t find advertising claims to be enhanced by the presence of seals, but identified that this may be in part due to unfamiliarity with the brand and misperceptions about what seals represent; in turn leading to ineffective product choices.

2.1.Awareness and Understanding of Third-Party Seals

The first step for any marketing professional is to make consumers aware of their brand. For new brands, a product launch can be difficult as consumers may be sceptical about the credibility of their offering (Morel and Pruyn, 2003). Logically, third-party endorsement is an answer to this scepticism by providing credibility to an unknown brand (McKnight et al., 2004). However, and perhaps counter-intuitively, Karmins and Marks (1991) showed that while the application of third-party seals to known brands increased purchase intent, it had no significant effect on brands unknown to the consumer.

Similarly, research suggests that for third-party seal to be effective, the endorser must be known to the consumer (Dam and Reuvekamp, 1995; Darnall and Potoski, 2017; Montoro Rios, 2006; Norberg, 2000) and there is also confusion among consumers as to what many seals and certifications mean (Dam and Reuvekamp, 1995; Darnall and Potoski, 2017; Norberg, 2000; Taufique et al., 2017). This has been evident since the discipline’s genesis study conducted by Parkinson (1975), where during a simulated shopping task lesser known seals or certifications seemed to have no impact on product choice.

In a survey of consumers, van Dam and Reuvekamp (1995) investigated the recognition and understanding of eleven environmental seals in market within the Netherlands. Results showed a wide difference between recognition and understanding of the environmental symbols; from theRecycle Symbol ranking highest with 92.7% recognition to the Society of Plastics Industry Symbol with 11.5% recognition. However, recognition did not necessarily correlate with understanding. Of the four seals and symbols that were widely recognized, only two were correctly understood by a majority of respondents.

In a similar survey of Swedes, Norberg (2000) reported that through unaided recall, knowledge of certification is lacking, with participants revealing that they had difficulty distinguishing certification marks from other symbols and logos. For the majority of participants, certification marks seem to be anonymous and indistinctive. Similarly, it has been found that third-party seals used within the travel industry have an awareness problem (Caso et al., 2015), and consumers struggle to differentiate stronger ecolabels and seals from weaker ones (Darnall et al., 2017). So, inconspicuous and misunderstood are some seals, the use of more than one environmental seal on a package may cancel out any positive effect of individual seals (Hidalgo-Baz et al., 2017).

As familiarity is a precondition of trust (Elliot and Yannopoulou, 2007), it does follow that unfamiliar or misunderstood third-party seals do not change perceptions or purchase intent. This, of course, poses a significant problem for both marketers and those organizations granting third-party seals as for a seal to be effective it must be known and understood.

2.2.Credibility of Third-Party Seals

Even if a third-party seal is known and understood, it must also be perceived as credible by the consumer to be effective (Atkinson and Rosenthal, 2014; Cai et al., 2017; Darnall and Vázquez-Brust, 2016; Wakefield and Whitten, 2006). This research also aligns with that conducted into the use of celebrity endorsements, where it is acknowledged that the endorser must be perceived as credible and relevant to the brand (for example Chi et al., 2011; Muda et al., 2014). In their aforementioned survey, Norberg (2000) reported that while most participants understood what third-party seals intended to communicate, they did not always believe them; going as far as to say they have a credibility problem. The degree to which a consumer finds a seal credible and believable largely comes down to the third-party issuing the seal.

In their 2010 study, Aaker and colleagues investigated how consumer perceptions for non-profit organisations could be boosted through the use of third-party seals. An endorsement from high-credibility source The Wall Street Journal was compared to lower credibility source The Detroit Free Press, with perceived brand competence increasing as a result of an endorsement from the former. Similarly, Hess and Melnyk (2016) found that when endorsed by high-credibility source Consumer Magazine compared to the fictitious Coffee News, purchase intent increased.

While The Wall Street Journal and Consumer Magazine were well known by study participants, research suggests that they may not be the most effective granting bodies of third-party seals. In comparing eco-labels issued by government compared to corporates, Atkinson and Rosenthal (2014) found that participants had greater trust in the government-sourced seals than corporate-sourced. In a similar study, it was found that consumers trust eco-labels sponsored by independent bodies, government, and environmental NGOs, and distrust private business and their use of business association-sponsored eco-labels (Darnall et al., 2016; Darnall et al., 2017).

Transparency and independence may be the key drivers of perceived credibility for third-party endorsers. Burkell (2004) proposes that a good seal should be transparent, allowing the consumer to find information easily and effectively. Not surprisingly, independent bodies issuing third-party seals have the strongest rules, followed by government and then industry (Darnall, 2017), and it would seem as though this is innately known by consumers. Interestingly, while seals do seem to have awareness and credibility problems, research also suggests that over granting of seals, regardless of the third-party organisation, may also diminish their impact (Norberg, 2000).

2.3.Relevance of Third-Party Seals to Product and Consumer

The effectiveness of third-party seals in changing brand perception and driving purchase intent has also been shown to be product and consumer dependent. Norberg (2000) reported that fair trade and ecological marks are perceived as meaningful symbols by a few idealists but were not significant to other consumers. Lwin and colleagues (2014) found that nutrition seals on food packaging enhanced perceptions of product healthfulness among restrained eaters, but by contrast, unrestrained eaters were largely unaffected.

The winning of medals and awards by winemakers is a long-standing marketing practice within the industry (Orth and Krška, 2001; Viot, 2012). But while these third-party endorsements and their display on bottles are among seven attributes considered important by high-knowledge wine drinkers, they are not considered at all by low-knowledge drinkers (Viot, 2012). So niche are consumers who consider medals and awards, Orth and Krška (2001) recommend that winemakers only submit wines to be judged if they know a target market is big enough and demands specific awards.

Research from Caso and colleagues (2015) also suggests that the impact of third-party certification and seals differs in the travel industry where tourists view hotel certifications as good indicators of a minimum service quality level. However, as the length of stay increases, so does the probability of selecting a certified establishment as it reduces the risk of making a wrong decision.

This may explain the literature available about third-party seals, as well as the industries and products to which seals are traditionally applied. That is, products and services with attributes in which consumers are emotionally invested (the environment, food and wine, their health), and high-value and consideration purchases (for example cars, home loans, university degrees).

3. The Third-Party Seal Model

While the above literature provides a strong theoretical background to third-party seals and the conditions in which they are most effective, to date there is no model available in which to predict the impact of using individual seals within marketing and advertising materials. With this in mind, I propose to develop the Third-Party Seal Model (TPSM), to provide marketers with a clearer picture of which seals to use within their marketing materials.

3.1.Study 1 - Categorisation of Third-Party Seals

As suggested by past research, the effectiveness of a third-party seal relies on the consumer being aware of the seal and understanding it is criteria, and how credible and believable it is perceived. These two drivers of effectiveness lead me to theorise that third-party seals could be categorised upon two dimensions; awareness and credibility. By plotting consumer perceptions of a seal upon these two dimensions, each seal can be categorised in one of four quadrants; low awareness- low credibility, high awareness-low credibility, low awareness- high credibility, and high awareness-high credibility. Informed by past research, the categorisation of third-party seals will be obtained through four survey questions rated on a ten-point Likert scale (Appendix I).

By plotting each seal, I propose that those falling within the high awareness-high credibility quadrant will have the strongest effect on purchase intent (H1), with those seals falling within the low awareness-low credibility quadrant not affecting purchase intent (H2). Additionally, based on previous research, seals issued by governmental and independent bodies will rate higher on credibility than those from industry bodies or for-profit organisations, regardless of their awareness level (H3).

3.1.1 Method

To test the categorisation, eight third-party seals were selected to be rated by survey respondents. Those chosen included well used but self-awarded seals (100% Money Back Guarantee and As Seen On TV), awards issued by third-party organisations (CNET Editor’s Choice and Tripadvisor Travellers’ Choice), a guarantee issued by third-party organisations (Good Housekeeping Seal of Approval), an NGO environmental seal (Rainforest Alliance Certified), and US Government issued seals (Safer Choice and USDA Organic).

In this first study, 217 adults from the United States of America (136 female) were recruited online to participate in the survey in exchange for access to online content. After viewing one of the eight seals chosen at random, participants were asked to rate the seal on a Likert scale of one to ten for the four questions. Once all data had been collected, the aggregate score for all participants of questions one and two were used to plot the “total awareness” dimension, and the aggregate score for all participants for questions three and four were used to plot the “total credibility” dimension.

3.1.2 Results

While it had been anticipated that the eight seals would be distributed across all four quadrants, seven of the eight seals were shared between the low awareness-low credibility (Rainforest Alliance, USDA Organic, Safe Choice, CNET Editors’ Choice) and high awareness-high credibility (Good Housekeeping, As Seen On TV, Money Back Guarantee) quadrants. The remaining seal, Tripadvisor Travellers’ Choice, was plotted to the high awareness-low credibility quadrant.

Table 1. Results of experiment 1 by third-party seal

When observed on a scatterplot (Figure 1), these unexpected results revealed a positive linear trendline between the two axes. A Pearson product-moment correlation coefficient was computed to assess the relationship between the awareness of third-party seals and the credibility of third-party seals. There was a positive correlation between the two variables, r = 0.9066, n = 8, p = 0.002. Increases in awareness of third-party seals were correlated with increases in the credibility of third-party seals.

Figure 1. Scatterplot of third-party seals from experiment 1

The link between awareness and credibility was also observed when results were segmented by gender of the respondent (Appendix II). A number of seals were plotted to different quadrants depending on the gender of the respondent including As Seen On TV, CNET Editors’ Choice, and Tripadvisor Travellers’ Choice.

3.1.3. Discussion

While the results of the first study were unexpected, they proved to be enlightening and bring an interesting new perspective to prior research. It had been expected that seals would occupy all four quadrants of the model, however, in practice, this did not prove to be the case. Instead, the mapping of seals demonstrated a strong, positive correlation between the two dimensions of awareness and credibility. While this correlation is yet to be explicitly identified, the result is not necessarily inconsistent with previous research. From the first study conducted on third-party seals (Parkinson, 1975), it has been shown that a seal must be known to be effective (Dam and Reuvekamp, 1995; Darnall and Potoski, 2017; Montoro Rios, 2006; Parkinson, 1975; Norberg, 2000). This logically leads to the conclusion that an unknown seal cannot be credible, regardless of the awarding organisation. This is particularly evident in the results of the two self-awarded seals; 100% Money Back Guarantee and As Seen On TV. Despite neither having an awarding organisation or set criteria, the two seals were perceived as the second and third most credible by respondents respectively.

Again, these results seem inconsistent with prior research which suggests that independent and governmental seals are perceived as the most credible (Darnall et al., 2016; Darnall et al., 2017). However, in comparing seals with similar levels of awareness, this does indeed follow. With a total awareness rating of 3.9, the governmentally issued USDA Organic seal received a credibility rating of 4.31. By comparison, the CNET Editors' Choice seal with a total awareness rating of 3.8 received a credibility rating of 3.87. Similarly, the independently issued Rainforest Alliance Certification achieved a credibility rating of 3.7, the same as the governmentally issued Safer Choice seal despite having a lower awareness rating. While governmental and independent seals are seen as more credible than their industry and self-awarded counterparts of similar awareness, as this isn’t the case as a general rule hypothesis three is rejected.

Interestingly, the third factor impacting the effectiveness of third-party seals identified within literature - importance to the individual and product - may also play a part in these results. Of all eight seals, the CNET Editors’ Choice demonstrated the largest change in ratings depending on whether the respondent was either male - who are generally more likely to be readers of technology websites (Bilton, 2016) - or female. For male respondents, the seal would have in fact moved into the high awareness-high credibility quadrant. Tripadvisor Travellers' Choice also moved into the high awareness-high credibility quadrant for female respondents, again, unsurprising given 58% of Tripadvisor’s site visitors are female (Tripadvisor 2018).

Despite the unexpected correlation between awareness and credibility, as overall results were found to be consistent with previous literature and categorised seals for further testing of purchase intent.

3.2.Study 2 – Purchase Intent of Third-Party Seals

With the eight selected seals now categorised, a further experiment was conducted to tests hypothesis one and two; that is, whether these categories can predict the impact of a third-party seal on purchase intent.

3.2.1. Method

In this second study, 204 adults from the United States of America (110 female) were recruited online to participate in the survey in exchange for access to online content. Respondents were shown two pieces of advertising creative for fictitious airline and luggage brands with either no third-party seal (control), a seal from the high awareness - high credibility quadrant (As Seen On Tv), a seal from the high awareness - low credibility quadrant (Tripadvisors Travellers’ Choice), and low awareness - low credibility quadrant (Rainforest Alliance), and asked to rate their purchase intent based on the creative (see Appendix III).

Fictitious brands were chosen so respondent’s previous brand experiences did not influence their purchase intent, while travel-related brands were created to test whether seals related to the product influenced purchase intent. To test whether seal influence was impacted by personal purchasing attributes and values, respondents were asked to rate whether they consider the environment when purchasing a product. Finally, respondents were also asked to rate their awareness of seals on a 10-point Likert scale so as to test whether awareness impacts purchase intent.

3.2.2. Results

All three seals received similar levels of awareness in study two to those seen in study one. However, the control group received the highest purchase intent, with the ranking of the three seals by purchase intent inverse to their ranking by awareness. A one-way between subjects ANOVA was conducted to compare the effect of the three third-party seals and control on purchase intent. There was not a significant effect of third-party seals on purchase intent at the p<.05 level for the three conditions [F(3,396) = 1.504, p = 0.213]. With the high awareness - high credibility seal, As Seen On TV, receiving the lowest purchase intent, hypothesis one is rejected. However, with no statistically significant difference in purchase intent across the three seals, hypothesis three is confirmed. Similarly, with no difference between the three seals despite being applied to creative in the travel industry, the domain-specific seal, the Tripadvisor Travellers’ Choice, did not affect purchase intent more than the two other seals or the control.

Figure 2. Purchase intent of third-party seals from experiment 2

To test whether the awareness of seals affected purchase intent, an independent-samples t-test was conducted to compare purchase intent for respondents with low awareness (rated 1-5) and high awareness (rated 6-10). There was a significant difference in the purchase intent for low-awareness respondents (M=2.95, SD=2.53) and high-awareness respondents (M=3.86, SD=2.92) conditions; t(149)=-2.65, p = 0.005. These results suggest that the high awareness of a seal can increase purchase intent compared to when a seal is unknown to the consumer. A Pearson product-moment correlation coefficient was computed to assess the relationship between the awareness of third-party seals and the purchase intent when observing an advertisement with the seal. There was a weak, positive correlation between the two variables, r = 0.2046, n = 154, p = 0.01.

To test the importance of seals and their representation of product attributes to individual consumers, a one-way between subjects ANOVA was conducted to compare the effect of the environmental concern on purchase intent for those respondents shown the Rainforest Alliance seal. There was a significant effect of environmental concern on purchase intent for those respondents shown the Rainforest Alliance seal at the p<.05 level for the three conditions [F(2, 127) = 4.497, p = 0.013]. Post hoc comparisons using the Tukey HSD test indicated that the mean score for those who did not consider the environment when making a purchase (M = 2.58, SD = 2.83) was significantly different than those who did consider the environment when making a purchase (M = 4.60, SD = 3.14). However, those who sometimes considered the environment when making a purchase (M = 3.35, SD = 2.85) did not significantly differ from the other respondents. These results suggest that for respondents where a seal represents a relevant product attribute, purchase intent increases.

3.2.3. Discussion

While the results of study two demonstrated that the simple categorisation of seals based on awareness and credibility was not an effective method for predicting the effect of third-party seals on purchase intent, it did provide further clarification for when seals are most effective. Contrary to expectations, the quadrant in which a seal is placed has no effect on purchase intent. In fact, the seal in the high awareness - high credibility quadrant - As Seen On TV - received the lowest purchase intent of the three seals used in the experiment. However, the significant difference - albeit a weak correlation - in the purchase intent of those with high awareness of the third-party seal compared to those with low awareness suggests that some familiarity with the seal is necessary for it to be effective. The control having the highest purchase intent is also not unexpected given that it has previously been shown that third-party seals only have a positive effect on purchase intent on known brands (Karmins and Marks, 1991).

This leaves us with the final, and perhaps most important finding of study two; that a seal has a positive effect on purchase intent if it represents an important attribute to the consumer. Again, this is not inconsistent with past research (Caso et al., 2015; Lwin et al., 2014; Norberg, 2000; Orth and Krška, 2001; Viot, 2012), but compared to awareness and credibility has not previously been as extensively studied.

4. The Third-Party Seal Model

While two hypothesis were rejected, the results of the two studies do provide a framework for the development of the TPSM. The three-stage model (Figure 4) can be used by marketers when considering the use of third-party seals as a creative element, within nurture content, or as a product differentiation strategy (Orth and Krška, 2001).

Figure 3. The Third-Party Seal Model

4.1.Stage 1 - Awareness of Brand

For a third-party seal to be effective, the brand to which it’s applied must be known by the consumer (Karmins and Marks, 1991). In using the TPSM, it is recommended that the audience of advertising and marketing messages be aware of the brand before introducing third-party seals into messaging. While this does not necessarily exclude the use of seals in brand-awareness activities - as a portion of the audience may already be aware of a brand - for marketers executing well-defined marketing and sales funnels, messaging and content including third-party seals should be used once a relationship with the prospect has been established and they are familiar with the brand.

4.2.Stage 2 - Awareness of Third-Party Seal

For the third-party seal to increase purchase intent, it must also be known to the consumer (Dam and Reuvekamp, 1995; Darnall and Potoski. 2017; Montoro Rios, 2006; Norberg 2000). While it has been shown that awareness is tied to credibility, the third-party seal should be known to the audience and, ideally, be issued by an independent or government body (Darnall, 2017) so it is seen as transparent (Burkell, 2004). For marketers, simply being awarded a seal - regardless of its transparency and difficulty in obtaining - is not enough if it is not known by the target audience. The awarding body, their standing within the consumer base, and their ongoing commitment to advertising and promotion should all be considerations when selecting a seal. A seal with strict criteria and exclusivity (Norberg, 2000), issued by an independent body may be the highest credibility third-party seal in the eyes of consumers.

4.3.Stage 3 - Third-Party Seal Representation of Important Consideration Attributes

Ultimately, a third-party seal is used to provide consumers with information to help differentiate offerings within the market (Burkell, 2004). For marketers, seals should be thought of as a way to quickly and easily communicate a product or service attribute to consumers through the use of a logo on packaging or within marketing material. Like all attributes and unique selling points, this must be important and relevant to the individual consumer, and something on which their purchase decision will be based.

4.4. Managerial Implications

For many marketers and managers, this may fundamentally change the way in which they view third-party seals. As seen in the winemaking industry, simply winning awards does not necessarily mean a bottle will be better received by all consumers (Orth and Krška, 2001). This was particularly evident in the high awareness but low purchase intent seen for the As Seen On TV seal in study two. While it is widely recognised and seen as credible, the fact a product has been on television is not a consideration for the vast majority of consumers. On the other hand, where a product is made, its ingredients, its health benefits, impact on the environment, security of payment and personal details, and ability to have the purchase price returned may be. By ensuring that third-party seals used in advertising and marketing materials check off the three steps of the TPSM, marketers can increase the likelihood of seals adding value to messaging and increasing purchase intent.

4.4.Limitations and Future Research

As with all studies there were limitations in both studies which also provide opportunities for future research. As online surveys, all participants were convenience samples and were unsupervised. While this does provide a picture of the population at large, future research and application of the model in category-specific or in-market audiences may provide greater insights into which seals are most effective in particular purchasing circumstances.

Appendices

Appendix I – Survey questions

1. How well do you recognise this seal?
2. How well do you understand the criteria for awarding this seal?
3. How strongly to you believe the claims of this seal?
4. How credible do you find the organisation awarding this seal?

Appendix II – Results of study 1 by respondent gender

Appendix III – Creative material used in study 2

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