The effects of targeted political advertising on user privacy concerns and digital product acceptance: A preference-based approach

Abstract

Online businesses are increasingly relying on targeted advertisements as a revenue stream, which might lead to privacy concerns and hinder product adoption. Therefore, it is crucial for online companies to understand which types of targeted advertisements consumers will accept. In recent years, users have been increasingly targeted by political advertisements, which has caused adverse reactions in media and society. Nonetheless, few studies experimentally investigate user privacy concerns and their role in acceptance decisions in response to targeted political advertisements. To fill this gap, we explore the magnitude of privacy concerns towards targeted political ads compared to “traditional” targeting in the product context. Surprisingly, we find no notable differences in privacy concerns between these data use purposes. In the next step, user preferences over ad types are elicited with the help of a discrete choice experiment in the mobile app adoption context. Our findings suggest that while targeted political advertising is somewhat less desirable than targeted product advertising, the odds of choosing an app are statistically insignificant between two data use purposes. Together, these results contribute to a better understanding of users’ privacy concerns and preferences in the context of targeted political advertising online.