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

Tami  Kim; Kate  Barasz; Leslie K. John

Article | 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

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;

Format: Print

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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.

Article | Journal of Experimental Psychology: General | April 2019

Shooting the Messenger

Leslie John, Hayley Blunden and Heidi Liu

Eleven experiments provide evidence that people have a tendency to “shoot the messenger,” deeming innocent bearers of bad news unlikeable. In a preregistered lab experiment, participants rated messengers who delivered bad news from a random drawing as relatively unlikeable (Study 1). A second set of studies points to the specificity of the effect: Study 2A shows that it is unique to the (innocent) messenger and not mere bystanders. Study 2B shows that it is distinct from merely receiving information that one disagrees with. We suggest that people’s tendency to deem bearers of bad news as unlikeable stems in part from their desire to make sense of chance processes. Consistent with this account, receiving bad news activates the desire to sense-make (Study 3A), and in turn, activating this desire enhances the tendency to dislike bearers of bad news (Study 3B). Next, stemming from the idea that unexpected outcomes heighten the desire to sense-make, Study 4 shows that when bad news is unexpected, messenger dislike is pronounced. Finally, consistent with the notion that people fulfill the desire to sense-make by attributing agency to entities adjacent to chance events, messenger dislike is correlated with the belief that the messenger had malevolent motives (Studies 5A, 5B, & 5C). Studies 6A & 6B go further, manipulating messenger motives independently from news valence to suggest its causal role in our process account: the tendency to dislike bearers of bad news is mitigated when recipients are made aware of the benevolence of the messenger’s motives.

Keywords: judgment; communication; sense-making; attribution; disclosure; Interpersonal Communication; Perception; Judgments; Motivation and Incentives;

Citation:

John, Leslie, Hayley Blunden, and Heidi Liu. "Shooting the Messenger." Journal of Experimental Psychology: General 148, no. 4 (April 2019): 644–666. View Details

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By the time Dan Doctoroff, CEO of Sidewalk Labs, began hosting a Reddit “Ask Me Anything” session in January 2018, he had only nine months remaining to convince the people of Toronto, their government representatives, and presumably his parent company Alphabet, Inc., that Sidewalk Labs’ plan to construct “the first truly 21st-century city” on the Canadian city’s waterfront was a sound one. Along with much excitement and optimism, strains of concern had emerged since Doctoroff and partners first announced their intentions for a city “built from the internet up” in Toronto’s Quayside district. As Doctoroff prepared for yet another milestone in a year of planning and community engagement, it was almost certain that of the many questions headed his way, digital privacy would be among them.

In August 2017, Commonwealth Bank of Australia was looking for ways to differentiate itself from competing banks and was also trying to improve the financial well-being of its customers. One domain where this was particularly relevant was in its bank-issued credit card business, where customers routinely selected cards that although profitable for the bank could be a poor fit for customers’ needs—leading to low satisfaction scores, cancellations, and occasionally, financial distress. To that end, the company’s Behavioral Economics team had developed a provocative experiment dubbed “The Good and the Bad.” Rather than just presenting the strengths of its various credit card offerings, they proposed also promoting each credit card’s less-obvious drawbacks. Being transparent with customers might help them make better choices, but would those choices come at the expense of bank performance? Should a company choose to be in the sales prevention business?

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

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