Privacy for sale! : An exploratory study of personalization privacy paradox in consumers’ response to personalized advertisements on social networking sites

Sammanfattning: Social networking sites are channels that allow companies to appeal to their target audience through personalized advertising which has become an increasingly common way for companies to reach their target customers. Personalization is possible through the use of customer data which allows designing an advertisement based on individual consumers' preferences benefiting the consumers with more personally appealing advertisements. However, the collection of the data has led to consumers’ experiencing costs from the personalization involving concerns for the safety of personal information. Because of the tension between benefits and costs of personalization, consumers' behavior has become paradoxical. The consumers’ behaviour does not always correspond to their concerns by which the consumers trade off their privacy to receive benefits from the personalization in return. With that said, this study aims to explore how the personalization privacy paradox appears in the consumers’ response to personalized advertisements on social networking sites by assessing their perception of the benefits and costs of personalized advertisements. Semi-structured interviews of eight participants lead to the main findings of this research identifying four factors that have an impact on consumers’ interaction with the advertisement; (1) simplified purchase decisions, (2) personal interest, (3) personal gain, and (4) trustworthiness. In addition, the research revealed additional findings indicating that consumers' concern for data collection could be changing from privacy risks regarding themselves to concerns about the consequence of data collection on a societal level. Furthermore, the findings show an indication for an emerging dilemma of personalized advertising for companies to overcome. Finally, this research provides implications for both academia as well as practitioners.