The Role of Privacy in the Adoption of Location-Based Services

Businesses are paying increasing attention to engaging mobile phones users through location-based services (LBS). LBS on mobile phones presents a tremendous opportunity for businesses to market their products and services. However, using LBS may pose privacy concerns for consumers. An understanding of what facilitates consumers to adopt LBS on their mobile phones and how privacy concerns may inhibit their adoption would help marketers promote LBS services more effectively. A research model was developed based on the technology acceptance model. We augmented the model with privacy concerns and emotional reactions to LBS. Specifically, we investigated whether and how perceived usefulness, ease of use, affective values, and privacy concerns influence consumers' behavioral intentions to adopt LBS and to spread positive word-of-mouth about LBS. Based on data collected from an online survey of 176 potential LBS adopters, we tested the research model using structural equation modeling. The results suggest that perceived usefulness, affective values, and privacy concerns have significant impacts on LBS adoption intentions, whereas only perceived usefulness and affective values influenced the intentions to spread positive word-of-mouth. Practical and theoretical contributions are discussed.