Privacy Concerns in Personalized Advertising Effectiveness on Social Media

Abstract

One of the characteristics of industry 4.0 is that consumers increasingly want products to be made just for themselves. This can be supported by the presence of big data, which of course cannot be separated from the use of information, the more complete the data, the more precise and accurate the targeting will be. However, the use of information for some people can also be considered a violation of privacy. Various research about personalized advertising been tested and have yielded mixed results both positive and negative on perceptions and behaviour, and provide directions for next research to testing various consumer factors as moderating variable. This study aims to fill the gaps in previous research by examining the role of consumer privacy concerns as a moderating variable that affects the relationship of personalized advertising on the perceived advertising value of consumers using a survey method on 131 respondents who are active users of Instagram in Indonesia. The findings of this study that advertising personalization have a positive effect on advertising value and purchase intention and privacy concerns do not moderate the effect of personalized advertising on advertising value. This is influenced by the factor of respondents aged 17-25 years, where they can be said to be the Tech Savvy generation. Further research suggestions are also discussed in this study.