The Impact of Privacy Intrusiveness on Individuals’ Responses and Engagement Toward Personalization in Online Interactive Advertising

Abstract

Research suggests that personalized advertising can invade privacy. Yet other research praises its benefits, creating a gap in understanding. Moreover, recent research highlights the importance of transparency in reducing perceived privacy intrusion. However, revealing how companies collect individuals’ data may also heighten privacy concerns, eliciting negative responses that impact engagement and further widen the existing gap. This study, grounded in psychological reactance theory, addresses these gaps by employing a survey method and analyzing data from 262 university students using the stimulus-organism-response model. The aim is to investigate how perceived privacy intrusiveness influences individuals’ psychological mechanisms (irritation and skepticism) and their subsequent engagement with personalization. We also explore the moderating role of transparency between perceived privacy intrusiveness and psychological mechanisms. The results indicate that skepticism fully mediates the relationship between intrusiveness and engagement. Our research suggests that the perceived importance of transparency moderates the positive impact of intrusiveness on irritation, ultimately reducing engagement with personalized advertising.