When is personalized advertising crossing personal boundaries? How type of information, data sharing, and personalized pricing influence consumer perceptions of personalized advertising

Abstract

We examine the boundary conditions of online personalized advertising by investigating when it is perceived as acceptable and when negative feelings predominate. We conducted a 4 (type of information) x 2 (sharing of information) x 3 (personalized pricing) scenario-based experiment among a representative sample of the Dutch population (N = 1244). Results suggest that, in general, people hold quite negative attitudes towards personalized advertising. Furthermore, ads that use individual-specific and private information (i.e., email content and name), when personal information is shared with other parties, and a higher personalized price all led to lower perceptions of personalized advertising and more resistance to the context (the website), message (the ad), and source (the advertiser). In addition, we find a tipping point: ads that present a higher price based on personal information led to even stronger negative perceptions. For advertisers, our findings imply that boundaries can be crossed in personalizing advertising.

Keywords

• Personalized advertising
• Perceptions
• Consumer attitudes
• Privacy
• Resistance
• Scenario-based experiment