Juxtaposing the persuasion knowledge model and privacy paradox: An experimental look at advertising personalization, public policy and public understanding

Abstract

Recent studies suggest the expanding collection and use of big data by advertisers to target messages to consumers based on their location, demographics and online behaviors is escalating information privacy concerns and negatively impacting campaign outcomes. For communication scholars and practitioners, this recent attitudinal shift indicates a critical need to better understand consumer perceptions related to personalized advertising in the era of big data. It is currently assumed that U.S. self-regulatory initiatives, including the AdChoices Icon, reduce perceived risk by giving consumers a greater sense of control over the exchange of their personal information online (Castro, 2011). However, less than 37% of U.S. Internet users are familiar with the AdChoices Icon (eMarketer, 2015), and 52% incorrectly believe that privacy policies ensure the confidentiality of their personal information (Pew, 2014). To examine the complexities of the privacy paradox, the present study utilizes a 2x2x2 experiment (N = 382) to measure attitudes toward personalized advertising with and without the presence of the AdChoices Icon. A Univariate GLM analysis of the data indicate that when controlling for demographics, online trust, message credibility, and perceived risks and benefits, advertising personalization did not have a significant effect on attitude toward the ad, but inclusion of the AdChoices Icon did. Further, respondents indicating no knowledge of the AdChoices Icon reported lower attitudinal responses toward the ad compared to those who were knowledgeable of its meaning. Exploring these complex relationships offers to advance research and practice by extending Persuasion Knowledge Model to examine the effects of personalized online message delivery, as well as offering practitioners actionable insights to improve their personalized advertising outcomes.