The Diversity of Consumer Perceptions toward Personalized Advertisements

Abstract

While personalized ads provide information that is relevant to consumers’ needs, they may also violate consumers’ privacy because such ads involve collection and use of personal information. When consumers browse a personalized ad, the level of perceived relevance can be (1) higher than, (2) lower than, or (3) equal to the level of perceived privacy concern. This research aims to identify the conditions under which each of these three patterns occurs. Study 1 shows that the first (third) pattern occurs if consumers with a promotion focus browse a personalized ad depicting the gain (non-loss) of the product, and that the second pattern occurs if consumers with a prevention focus regarding private facts browse a personalized ad. Studies 2 and 3 show that the third (first) pattern occurs if consumers with a prevention focus regarding product consumption browse a personalized ad depicting the gain (non-loss) of the product in the situation that advertisers or websites are more trusted.