Over the past decade, the networked information environment has increased consumers’ autonomy and brought radical change to the advertising industry. Now individual consumers can reach millions of others around the world and advise them on well-known brands through home-produced video-ads, which was not as accessible in a previous era dominated by one-way marketing. The overall objective of this thesis was to examine the attitudinal, behavioural and recall effects of consumer-generated advertising (CGA) on viewing audiences. This was achieved by implementing an exploratory sequential mixed method design. During an initial qualitative phase with focus groups, seven determinants of CGA effectiveness were identified: recognition of consumer-generated advertising; advertising quality; product involvement; perceived expertise of ad creators; motivations of ad creators; scepticism towards CGA; and consumer’s creativity. The Salience-Involvement model of CGA effects was then developed and tested in two subsequent empirical studies. Study One used a 2 x 2, between-subjects experimental design in which levels of advertising Source Salience (consumer-generated vs. company-generated) and Product Involvement (low vs. high involvement) were manipulated. Results reveal a largely negative impact of salient CGA when the consumer source was not disclosed. However, under high involvement conditions, amateur CGA was more entertaining and more likely to be electronically shared with others. Meanwhile, under low involvement, brands from consumer-generated ads showed higher levels of recall. Study Two investigated how the outcomes of professional and amateur CGA change after source disclosure using a 3 x 2 x 2, between-subjects design. In this experiment, levels of Source Awareness (consumer-generated ads vs. company ads vs. no source indicated) were manipulated in addition to Source Salience and Product Involvement. Findings show that Source Awareness produces an interactive effect with Source Salience and Product Involvement, which is significant only on the Cognitive component of Attitude towards the ad and the Attractiveness component of Credibility. Thus, disclosure of consumer source is likely to enhance ad evaluations when the CGA is professionally produced and involvement is low. Meanwhile, attribution of amateur CGA to consumer source is likely to have a negative impact. Conversely, attribution of an amateur ad to company source has a favourable attitudinal effect under high involvement. In summary, this research demonstrates that in the context of CGA, the communicator-receiver similarity does not necessarily guarantee a positive response. Most importantly, the CGA’s outcome is moderated by Source Salience. Since Source Salience specifically characterises the consumer source in this context, it could potentially add another dimension to the traditional conceptualisation of the information source.