Source-linked AI summary
Online Behavioral Advertising: A Literature Review and Research Agenda
Sophie C. Boerman, Sanne Kruikemeier, Frederik J. Zuiderveen Borgesius
TL;DR
The paper addresses limited understanding of why consumers accept or reject online behavioral advertising, amid privacy and control concerns. It synthesizes empirical and theoretical perspectives in an integrative framework, showing that OBA outcomes depend on advertiser and consumer factors while identifying research needs around knowledge, transparency, and measurement.
Problem
Research has not fully explained why consumers reject OBA, despite significant concerns about privacy and control over personal data.
Method
The paper develops an integrative framework connecting advertiser-controlled factors, consumer factors, and theories used to explain responses to OBA.
Results
OBA can increase click-through rates and purchases, but its effects depend on advertiser-controlled and consumer-related factors.
Takeaways & Limitations
The framework points to research and practical efforts focused on improving consumer knowledge, transparency, privacy protection, and methods for studying OBA.
Takeaways & Limitations
Empirical OBA research is constrained by difficulty measuring exposure and manipulating behaviorally targeted ads in experiments.
Abstract
from arXiv · showhide
Advertisers are increasingly monitoring people's online behavior and using the information collected to show people individually targeted advertisements. This phenomenon is called online behavioral advertising (OBA). Although advertisers can benefit from OBA, the practice also raises concerns about privacy. Therefore, OBA has received much attention from advertisers, consumers, policymakers, and scholars. Despite this attention, there is neither a strong definition of OBA nor a clear accumulation of empirical findings. This article defines OBA and provides an overview of the empirical findings by developing a framework that identifies and integrates all factors that can explain consumer responses toward OBA. The framework suggests that the outcomes of OBA are dependent on advertiser-controlled factors (e.g., the level of personalization) and consumer-controlled factors (e.g., knowledge and perceptions about OBA and individual characteristics). The article also overviews the theoretical positioning of OBA by placing the theories that are used to explain consumers' responses to OBA in our framework. Finally, we develop a research agenda and discuss implications for policymakers and advertisers.
OBA Transparency
Transparency initiatives are intended to inform consumers about OBA data practices and provide control, but many approaches are overlooked or poorly understood. Clearer disclosures can improve awareness, trust, and ad effectiveness, while consumer knowledge, privacy concerns, and trust shape responses to OBA.
- OBA Transparency: Privacy statements disclose collected data and its use, but they are seldom read and often difficult to understand.People may agree to requests or ignore them, so informed-consent approaches often fail to inform or empower consumers.
- Disclosure: OBA disclosure icons and taglines are often unnoticed or misunderstood by consumers.Only one-quarter remembered disclosure icons, and 12% remembered and correctly identified a tagline.
- Disclosure: Transparency can reduce vulnerability associated with highly personalized ads and increase trust, website-use intentions, and recommendations.These benefits are reported when companies openly disclose data collection or cookie usage.
- Disclosure: Undisclosed data collection and use can violate consumers’ expected social contract and personal space, lowering trust.Social contract theory and expectancy violation theory are used to explain this relationship.
- Consumer Characteristics: Consumers generally lack OBA knowledge and insight into tracking, while their perceptions range from recognizing benefits to viewing OBA as invasive.Privacy concerns, perceived intrusiveness, and trust are related to consumer acceptance and responses.
- Consumer Characteristics: Consumers’ ability to protect their privacy is constrained by limited knowledge and unevenly effective tools.Third-party-cookie blockers can limit OBA, whereas opt-outs may not stop tracking and do-not-track options limit OBA only slightly.
Consumer Characteristics
Consumer responses to OBA vary with privacy concerns, personal characteristics, personalization, transparency, and advertiser trust. Empirical findings show that these factors shape advertising effects, acceptance, and avoidance in nuanced ways.
- Consumer Characteristics: Consumers with lower privacy concerns tend to respond more positively to OBA, while privacy concerns can moderate advertising responses.Responses to OBA also vary with age, education, and online experience.
- Consumer Characteristics: OBA outcomes depend on both advertiser-controlled and consumer-controlled factors, including personalization, privacy concerns, knowledge, perceptions, and individual characteristics.Studied outcomes include click-through behavior, purchases, purchase intentions, acceptance, and avoidance.
- Consumer Characteristics: Personalization can increase click-through rates, but its effect depends on intensity and retailer trust.Moderate personalization outperformed nonpersonalized ads in one study, whereas highly personalized ads reduced click-through rates; high-depth personalization helped only for trusted retailers.
- Consumer Characteristics: Transparency about data collection generally improves responses, whereas covert collection can reduce click-through rates or leave them unchanged.An OBA icon eliminated overt-versus-covert differences in click-through intentions and improved brand recall and perceived relevance in another study.
- Consumer Characteristics: Consumer awareness mediates personalization effects: personalization can improve responses when data collection is known but increase vulnerability when it is not.Vulnerability is associated with lower click intentions, while usefulness, reactance, and privacy concerns help explain these responses.
- Consumer Characteristics: Purchase responses are more positive when OBA fits consumers’ current needs, narrowly construed preferences, or self-perceptions, although fit can also increase perceived intrusiveness.Discounts did not offset the negative effects of increased personalization, and accurate behavioral fit can increase purchase behavior.
Empowering the Consumer
Consumers generally lack knowledge about OBA while expressing significant privacy concerns, and current transparency approaches often do not improve understanding. The literature therefore calls for better education, more effective transparency, and research on how consumers can protect their privacy.
- Consumers lack relevant OBA knowledge despite significant concerns about online collection and use of personal information.
- Further research should examine how OBA characteristics influence consumer knowledge and how knowledge affects OBA outcomes.The proposed agenda also highlights self-protection behavior, longitudinal change, implicit measures, and unobtrusive observation as areas for study.
- Consumers may understand OBA yet remain unable to protect their privacy effectively because available tools differ in effectiveness.Ineffective tools can create a false sense of safety, motivating research on education, transparency, and possible legal protection.
- Current transparency approaches often fail to increase OBA knowledge, awareness, or self-protection.People may not notice or may ignore consent requests, privacy statements, and icons; descriptive information could make OBA icons more informative.
- OBA outcomes depend on advertiser-controlled factors and consumer factors such as trust, usefulness, intrusiveness, and privacy concerns.Advertisers should calibrate personalization and transparency because overly personal ads can seem intrusive, while transparency can improve responses.