Online Behavioral Targeting: Are Knowledgeable Consumers Willing to Sell Their Privacy?
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Online Behavioral Targeting: Are Knowledgeable Consumers Willing to Sell Their Privacy? H. Li 1 & A. Nill 2 Received: 10 December 2019 / Accepted: 25 August 2020/ # Springer Science+Business Media, LLC, part of Springer Nature 2020
Abstract
Unbeknownst to many online consumers, their personal information is being traded on a flourishing and rapidly increasing market for privacy data. In a process often labeled online behavioral targeting (OBT), data mining companies and online brokers collect, analyze, buy, and sell consumers’ personal data in an effort to enable online and offline marketers to deliver personalized, highly relevant, and ultimately profitable advertisements. For the most part, consumers have not yet been afforded the opportunity to meaningfully participate in this market for privacy data. The purpose of this article is to explore more deeply the impact of knowledge on consumers’ potential willingness to keep versus trade their private information. Using survey data methodology, we find that those consumers who are more knowledgeable about OBT are willing to pay more for keeping their data private and, at the same time, are willing to sell their data for less money than less informed consumers. Keywords Consumer privacy . Online behavioral targeting . Online behavioral advertising . New media . Big data . Ethics Dan Abate could not explain why he received so many advertisements about diabetesrelated medications–online and via regular mail—until he discovered that his name showed up in a database of millions of people with “diabetes interest.” Acxiom Corp., one of the world’s biggest data mining companies, sells this list to advertisers and data
Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10603-02009469-7) contains supplementary material, which is available to authorized users.
* H. Li [email protected]
1
Department of Economics, California State University, Sacramento, USA
2
Department of Marketing and International Business, University of Nevada, Las Vegas, USA
H. Li, A. Nill
brokers. One of Acxiom Corp’s customers, the data reseller Exact Data, posted Dan’s full name and his physical address online, along with 100 others, under the header “Sample Diabetes Mailing List.” This is just one of hundreds of medical databases up for sale to marketers (Pettypiece and Robertson 2014). A data broker such as Exact Data typically buys those lists wholesale for a mere 20 cents per name and breaks the data down into sub-categories, including income level, sex, profession, geography, and ethnicity. These customized lists are sold to marketers such as pharmaceutical companies who in turn can send customers highly relevant advertisements. Dan’s story is an example of online behavioral targeting (OBT) and its potential consequences in the physical world. While Dan’s personal information has been bought and sold several times, he has not been afforded the opportunity to meaningfully participate in this market for privacy data. He had no control over how h
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