Social Networks, Personalized Advertising, and Privacy Controls
AbstractThis paper investigates how internet users' perception of control over their personal information affects how likely they are to click on online advertising. The paper uses data from a randomized field experiment that examined the relative effectiveness of personalizing ad copy to mesh with existing personal information on a social networking website. The website gave users more control over their personally identifiable information in the middle of the field test. The website did not change how advertisers used anonymous data to target ads. After this policy change, users were twice as likely to click on personalized ads. There was no comparable change in the effectiveness of ads that did not signal that they used private information when targeting. The increase in effectiveness was larger for ads that used less commonly available private information to personalize their message. This suggests that giving users the perception of more control over their private information can be an effective strategy for advertising-supported websites.
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Bibliographic InfoPaper provided by NET Institute in its series Working Papers with number 10-07.
Length: 41 pages
Date of creation: Sep 2010
Date of revision:
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Web page: http://www.NETinst.org/
Social Networks; Privacy; Online Advertising;
Find related papers by JEL classification:
- M37 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Advertising
- M38 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Government Policy and Regulation
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-09 (All new papers)
- NEP-EXP-2010-10-09 (Experimental Economics)
- NEP-ICT-2010-10-09 (Information & Communication Technologies)
- NEP-MKT-2010-10-09 (Marketing)
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