The personalization-privacy paradox: personalized ads on social media : Exploring invasive ads on social media, in relation to perceived usefulness, consumer privacy and trust

Abstract: Background: In the realm of online digital marketing, personalization tailored around the user’s interests are becoming the norm. It is becoming more and more challenging for marketers to get the attention of relevant consumers and get heard through all the noise. While personalized marketing or individually customized advertisements are very prevalent and a norm when browsing the web, its incredible potential as a marketing strategy has not always been obvious. The implications of the internet, coupled with countless technological advances in both hardware and software, have made personalized marketing incredibly effective, hence so prevalent that many techniques are barely noticeable anymore. However, its usefulness towards the consumer is not possible without the same consumer paying with precious personal data, vital for personalization. Personalized advertising on social media sites offers the opportunity to direct ads specifically to user’s, this form of personalized and targeted marketing has raised concerns surrounding user’s privacy. It could have some serious consequences affecting consumer’s privacy, where privacy breaches could collect information without the consumer being aware of it, by clicking on ads. Purpose: The purpose of this thesis is to get a deeper understanding of how personalized ads on social media are generating feelings of invasiveness to users, in relation to privacy concerns, trust, perceived usefulness and the perceived amount of personalization felt. And what factors that are determining in, if an ad is perceived as either invasive or not by the user. Method: A quantitative method is used to conduct the research, which is used to test objective theories that examines the relationship between variables. In this study a deductive approach was implemented, the hypothesis development was greatly influenced by previous findings from relevant studies and literature. The choice of research design was to use a quantitative cross-sectional research approach, after considering the factors just mentioned above. This is applied to the study by looking at primary empirical data, collected through the use of an online self-completion questionnaire. This study will be using a multivariate analysis including three variables or more, and the data will be measured through a regression analysis, Pearson’s correlation coefficient (r) to measure construct validity, and Cronbach’s alpha to measure internal reliability. In the descriptive statistics dispersion and central tendency is analyzed, and the general distribution of the variables is analysed through skewness and kurtosis. contingency tables to analyse the relationship between different variables, and Pearson’s r to examine the relationship between interval and ratio variables. Conclusion: In conclusion, privacy concerns already held by the consumer, plays a huge role in determining whether personalized ads on social media, generates feelings of invasiveness upon the user or not.