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  • Journal of Consumer Research

Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness

By: Tami Kim, Kate Barasz and Leslie K. John
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Abstract

Given the increasingly specific ways marketers can target ads, many consumers and regulators are demanding ad transparency: disclosure of how consumers’ personal information was used to generate ads. We investigate how and why ad transparency impacts ad effectiveness. Drawing on literature about offline norms of information-sharing, we posit that ad transparency backfires when it exposes marketing practices that violate norms about “information flows”—consumers’ beliefs about how their information ought to move between parties. Study 1 inductively shows that consumers deem information flows acceptable (or not) based on whether their personal information was: 1) obtained within versus outside of the website on which the ad appears and 2) stated by the consumer versus inferred by the firm (the latter of each pair being less acceptable). Studies 2 and 3 show that revealing unacceptable information flows reduces ad effectiveness, which is driven by increasing consumers’ relative concern for their privacy over desire for the personalization that such targeting affords. Study 4 shows the moderating role of platform trust: when consumers trust a platform, revealing acceptable information flows increases ad effectiveness. Studies 5a and 5b, conducted in the field with a loyalty program website (i.e., a trusted platform), demonstrate this benefit of transparency.

Keywords

Digital Marketing; Customization and Personalization; Information; Trust; Performance Effectiveness

Citation

Kim, Tami, Kate Barasz, and Leslie K. John. "Why Am I Seeing This Ad? The Effect of Ad Transparency on Ad Effectiveness." Journal of Consumer Research 45, no. 5 (February 2019): 906–932.
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About The Author

Leslie K. John

Negotiation, Organizations & Markets
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More from the Authors
  • Reaching for Rigor and Relevance: Better Marketing Research for a Better World By: Shilpa Madan, Gita Venkataramani Johar, Jonah Berger, Pierre Chandon, Rajesh Chandy, Rebecca Hamilton, Leslie John, Aparna Labroo, Peggy J. Liu, John G. Lynch, Nina Mazar, Nicole Mead, Vikas Mittal, Christine Moorman, Michael I. Norton, John Roberts, Dilip Soman, Madhu Viswanathan and Katherine White
  • A Randomized Trial of Behavioral Nudges Delivered through Text Messages to Increase Influenza Vaccination among Patients with an Upcoming Primary Care Visit By: Mitesh S. Patel, Katherine L. Milkman, Linnea Gandhi, Heather N. Graci, Dena Gromet, Hung Ho, Joseph S. Kay, Timothy W. Lee, Jake Rothschild, Modupe Akinola, John Beshears, Jonathan E. Bogard, Alison Buttenheim, Christopher Chabris, Gretchen B. Chapman, James J. Choi, Hengchen Dai, Craig R. Fox, Amir Goren, Matthew D. Hilchey, Jillian Hmurovic, Leslie John, Dean Karlan, Melanie Kim, David Laibson, Cait Lamberton, Brigitte C. Madrian, Michelle N. Meyer, Maria Modanu, Jimin Nam, Todd Rogers, Renante Rondina, Silvia Saccardo, Maheen Shermohammed, Dilip Soman, Jehan Sparks, Caleb Warren, Megan Weber, Ron Berman, Chalanda N. Evans, Seung Hyeong Lee, Christopher K. Snider, Eli Tsukayama, Christophe Van den Bulte, Kevin G. Volpp and Angela L. Duckworth
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