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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

Online Advertising; 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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    • November–December 2020
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    Lifting the Veil: The Benefits of Cost Transparency

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More from the Authors
  • Joy and Rigor in Behavioral Science By: Hanne K. Collins, Ashley V. Whillans and Leslie K. John
  • Consumer Disclosure By: Tami Kim, Kate Barasz and Leslie John
  • Lifting the Veil: The Benefits of Cost Transparency By: Bhavya Mohan, Ryan W. Buell and Leslie K. John
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