“We know what you see, so here’s an ad!” Online Behavioral Advertising and Surveillance on Social Media in an Era of Privacy Erosion.

Abstract

Technology has helped creating new opportunities for advertisers to better reach their audiences online. Online Behavioral Advertising is one of these strategies that is being used to target specific audiences with personalized messages to specific consumers based on their online behavior and personal information. However, this personalization has impacted how consumers respond to these personalized ads because they may feel that they are continuously monitored and watched by these brands. This feeling is called perceived surveillance. I explain the relationship between the levels of personalization of the ad based on the brand (match vs. mismatch in ad with previous search) and levels of personalization of the ad based on the product (match vs. mismatch in ad with previous search) and advertising effectiveness (i.e., ad avoidance, attitudes, and purchase intentions) through perceived surveillance. By using the Social Contract Theory, I suggest that higher levels of personalization (i.e., match in brand and/or product with previous online search) illustrate a breach in the social contract between brands and consumers. Furthermore, I explain the relationships between perceived surveillance and the advertising outcomes through the Reactance Theory where higher level of perceived surveillance would lead to more avoidance of the persuasive message and more negative attitudes, and lower purchase intention because of the threat to freedom that surveillance creates. This thesis contributes to theory by looking at perceived surveillance as an antecedent to these advertising outcomes and presents a framework to understand consumers’ perceptions of increased levels of personalization. Practically, this study amplifies the need to safeguard consumers’ privacy; thus, advertisers need to align their strategies to better serve their customers.