«Technische Universität München As marketing expenditures in the Internet rush, effectiveness and efficiency become increasingly relevant. ...»
Second, we were unable to increase consumers’ acceptance and decrease the perceived intrusiveness of the targeted advertisements by arguing that targeting would make them more interesting. The ineffectiveness of the relevance mechanism is a surprising result because several studies report that many consumers prefer relevant advertisements (McDonald; Cranor, 2010; Turow et al., 2010) and advertisers often use this argument to justify targeting practices and even to collect data for predictive targeting. It seems that consumers do not believe that targeting makes advertisements more interesting or they do not consider highly relevant advertisements sufficiently beneficial. Milne and Gordon’s (1993) conjoint study supports this view, showing advertising relevance received a substantially smaller importance weight than compensation.
Third, the studies show that in the context of free content, under certain conditions, surfers are highly concerned about distributive justice. Surfers exposed to a blatant reciprocity primer not only are more willing to share data for targeting purposes but also perceive targeted advertisements as less intrusive. As such, the studies show that findings on pay-what-you-want pricing mechanisms (Kim; Natter; Spann, 2009) can be transferred to the online world. Our findings suggest that consumers consider targeted advertising an alternative “online currency” to voluntarily repay a website for benefits received after they are informed of the challenges related to offering free content. This result is particularly noteworthy because previous research reveals that altruistic, prosocial behavior is often motivated by the desire for status and social acceptance (e.g., Greenberg, 1980; Griskevicius; Tybur; van den Bergh, 2010). In contrast, our studies show that even in a fully anonymous business-to-consumer Internet environment, the idea of a self-oriented, purely rational, utility-maximizing user does not hold true. Therefore, our findings might even be applicable to contexts other than Internet advertising. In general, activating the norm of reciprocity might be a principle to finance “for-free” online business models.
We believe that a core strength of this article is that it validates the findings on consumers’ willingness to reciprocate online with real behavioral data with an extremely large sample size. We report real click rates, which is rare in academic literature because of confidentiality requirements of most industry partners.
5.2. Managerial Implications Many websites offering predictive behavioral targeting can benefit immediately from our findings related to priming reciprocity by changing their teasers when conducting predictive targeting surveys. Doing so would enable them to collect more profiles and thus offer more efficient targeting. In Study 2, we were able to increase the number of completed predictive targeting surveys by 379% and 591%, respectively. Furthermore, Study 1 shows that appealing to reciprocity can increase the number of people choosing to opt-in, or conversely, reduce the number of people opting out of behavioral targeting.
In light of our findings, critics might question whether a website should proactively inform its consumers about its targeting practices as long it is not requires by law. In fact, our research shows that surfers who were told that the advertisements shown to them were targeted perceived them as more intrusive than surfers who were not informed. Even with our most effective reciprocity mechanism, we were unable to fully reduce the perceived intrusiveness of targeted advertisements to the level of those not denoted as behaviorally targeted. From a normative and public policy perspective, a website must proactively inform consumers about targeting practices to allow for informed consent (e.g., Dunfee; Smith; Ross Jr., 1999). But also from a purely commercial point of view, doing so seems advisable. Consumers’ privacy concerns are likely to intensify after they realize that marketers have somehow obtained information about them without their awareness or permission. Our research shows that websites should educate consumers truthfully and comprehensively so that they can make informed trade-offs. This might also reduce increasing regulatory attention and the likelihood of tighter privacy laws being passed.
5.3. Limitations and Further Research Our study has several limitations that, in turn, might open avenues for further research. First, we were only able to test our hypotheses on two websites, a news website and a query community. Additional research could validate our findings in different online environments. Second, both studies were conducted in Germany.
Because privacy concerns are related to cultural values and might differ across countries (Milberg; Smith; Burke, 2000), the impact of our mechanisms might differ as well. Third, we were only able to study the short-term effects of increasing the salience of the norm or reciprocity. Therefore, an important area for research would be to study the mid- and long-term effects of reciprocity priming. Regarding the former, research could investigate how long the effect of reciprocity priming on targeting acceptance lasts. Such research would provide insights into how regularly consumers should be reminded of the advantages of targeted advertising to fund free-content websites. Regarding the latter, research could examine the effect of repeated reciprocity priming by several websites. For example, does the effect diminish as consumers become familiar with and thus indifferent to appeals to reciprocity? Or in contrast, does the effect lead to a generally increased awareness of the challenges freecontent websites face? If so, this could lead to a mind-set change regarding consumers’ willingness to reciprocate benefits or even pay for free online services.
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Nicole, Gröne, doctoral candidate Technische Universität München Lehrstuhl für Dienstleistungs- und Technologiemarketing Arcisstr. 21, 80333 Munich, Germany Email: firstname.lastname@example.org Florian, v. Wangenheim, Prof. Dr.
Technische Universität München Lehrstuhl für Dienstleistungs- und Technologiemarketing Arcisstr. 21, 80333 Munich, Germany Email: email@example.com Jan H., Schumann, Prof. Dr.
Technische Universität München Juniorprofessur für Marketing Arcisstr. 21, 80333 Munich, Germany Email: firstname.lastname@example.org