Social utility theory suggests that labeling video news release (VNR) source material is the ethical decision (Wulfemeyer & Frazier, 1992), yet the persuasion knowledge model predicts that the effectiveness of VNRs will decrease as people become aware of this PR tactic (Friestad & Wright, 1994). Our study found that positive and negative effects were heightened when subjects read about VNRs and viewed a labeled VNR in a newscast. These subjects were most likely to recognize the VNR story source and least likely to perceive the story as credible. Neither reading nor labeling affected evaluations of the VNR message or featured company.