Addressing the Personalization-Privacy Paradox: An Empirical Assessment from a Field Experiment on Smartphone Users

Abstract

Privacy has been an enduring concern associated with commercial information technology (IT) applications, in particular regarding the issue of personalization. IT-enabled personalization, while potentially making the user computing experience more gratifying, often relies heavily on the user's personal information to deliver individualized services, which raises the user's privacy concerns. We term the tension between personalization and privacy, which follows from marketers exploiting consumers' data to offer personalized product information, the personalization-privacy paradox. To better understand this paradox, we build on the theoretical lenses of uses and gratification theory and information boundary theory to conceptualize the extent to which privacy impacts the process and content gratifications derived from personalization, and how an IT solution can be designed to alleviate privacy concerns. 1 Set in the context of personalized advertising applications for smartphones, we propose and prototype an IT solution, referred to as a personalized, privacy-safe application, that retains users' information locally on their smartphones while still providing them with personalized product messages. We validated this solution through a field experiment by benchmarking it against two more conventional applications: a base non-personalized application that broadcasts non-personalized product information to users, and a personalized, non-privacy safe application that transmits user information to a central marketer's server. The results show that (com

Online Behavioral Advertising: A Literature Review and Research Agenda

“…When they do, privacy concerns are often placed within a debate about the privacy calculus, which is directly related to social exchange theory (Schumann, von Wangenheim, and Groene 2014), acquisition-transaction utility theory (Baek and Morimoto 2012), and information boundary theory (Sutanto et al 2013).…”

“…Aside from the theories that can be attributed to one of the factors in our framework, some general communication and processing theories are also applied to OBA: human-interaction theory (Ahrens and Coyle 2011), uses and gratifications theory (Sutanto et al 2013), overload theory (Schumann, von Wangenheim, and Groene 2014), and dual process theory (Phelan, Lampe, and Resnick 2016). These theories are helpful in explaining how people process and respond to computermediated communication and specific messages, but they do not seem to be specific to the concept of OBA or our framework.…”

“…The information boundary theory (Sutanto et al 2013) provides some insight into the actual weight that consumers give to the benefits and risks of OBA. This theory suggests people find the collection and use of personal information intrusive and thus perceive it as a risk or cost that does not outweigh the possible benefits of OBA when people consider using this information as crossing a boundary.…”

The effects of general privacy concerns and transactional privacy concerns on Facebook apps usage

“…Ample IS research has focused on the importance of general privacy concerns in driving disclosure behaviour and technology usage (e.g., Awad and Krishnan 2006;Sutanto et al 2013) and emerging studies have revealed the importance of transactional privacy concerns (e.g., Junglas et al 2008;Xu et al 2012). Hence, following past research examining transactional concerns for privacy, this study emphasizes the distinction between general privacy concerns and transactional privacy concerns.…”

When mobile is the norm: researching mobile information systems and mobility as post-adoption phenomena

“…Mobile IS were not new in late 2011 when we called for papers for this issue, but expectations of mobile access to information were not as deeply embedded in organisational and personal routines and practices as they are today. Mobile access is the norm now, as reflected in recent papers that investigate the use of mobile devices and development of mobile services as essential components of the IS environment (e.g., Bang et al, 2013;Kietzmann et al, 2013;Sutanto et al, 2013).…”