Exploring the effect of perceived relevance and privacy concerns on consumer responses to online behavioral advertising

Abstract

Online behavioral advertising (OBA) is a new form of online advertising based on consumer online activity history. Despite the growing attention and use of this form of advertising, research on OBA is still in its early stages. This study presents preliminary investigation of consumer responses to OBA, particularly focusing on the effects of perceived ad relevance and perceived privacy concerns. Other influencing factors for the two perceptual responses are also explored. An online survey was conducted with a volunteer sample of 292 MTurk users. The results indicate that perceived relevance of OBA is a strong, positive influencer of consumer responses to OBA while privacy concerns regarding OBA appear to play a negative yet less critical role. Perceived ad personalization, knowledge of OBA privacy risks, and institutional trust in online marketing practices were found to be significant factors influencing the two perceptual factors. Implications for advertising practitioners and directions for future research are discussed.