Gen Z's personalization paradoxes: A privacy calculus examination of digital personalization and brand behaviors

Abstract

Employing privacy calculus theory, we examine why Gen Z consumers increasingly adopt ad blockers, use private browsers, or take other measures to limit data tracking. Specifically, we evaluate consumer behaviors related to personalized and non‐personalized digital marketing in light of two personalization paradoxes: privacy–benefits and avoidance–annoyance. Using structural equation modeling on a sample of 414 Gen Z consumers, our findings show that both the privacy–benefits paradox and avoidance–annoyance paradox strongly influence consumers' intentions to avoid brands that fail to personalize marketing efforts. We also explore the interaction effects of the two digital personalization tensions, showing that tradeoffs exist between the utilization of these two paradoxes. Our findings underscore key implications for marketers investing in personalized marketing efforts to enhance consumer–brand relationships.

Transformative privacy calculus: Conceptualizing the personalization‐privacy paradox on social media

“…The concept of the privacy calculus has taken on a heightened significance in today's digital landscape, as it plays a central role in individuals' decision-making processes related to sharing personal information online (Schumacher et al, 2023). Privacy concerns can substantially influence how consumers behave in terms of information disclosure and other online actions (McKee et al, 2023). Within this context, consumers' attitudes toward personalized marketing revolve around a contextual assessment of the perceived privacy risks versus the benefits (McKee et al, 2023).…”

“…Privacy concerns can substantially influence how consumers behave in terms of information disclosure and other online actions (McKee et al, 2023). Within this context, consumers' attitudes toward personalized marketing revolve around a contextual assessment of the perceived privacy risks versus the benefits (McKee et al, 2023). Despite the increasing relevance of the privacy calculus in understanding online behaviors, there remains a need for a more comprehensive conceptualization of how consumers navigate their privacy calculus, especially in their interactions with organizations (Beke et al, 2022).…”

“…Amidst the rapidly evolving digital marketing landscape, our investigation seeks to address a pertinent question: How and under which conditions does HWI influence users' willingness to disclose information for personalization on SNSs? By answering this question, our research not only deepens the theoretical understanding of digital user behavior but also furnishes marketers with actionable insights for navigating the complex interplay between personalization and privacy in our data‐centric era (Hilken et al, 2022; McKee et al, 2023).…”