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Facebook Data Breach: A Systematic Review of Its Consequences on Consumers’ Behaviour Towards Advertising

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Abstract

Advancement of Internet and digitalisation of information has led to increase of data breach incidences in social networking sites (SNS) particularly Facebook, thus affecting its market value and reputation. The intriguing question is whether and how does data breach affects consumers’ behaviour towards Facebook advertising? The privacy literature provides inadequate account on this question. In order to fill the gap, the current paper analyses privacy in Facebook and investigates the consequences of perceived data breach (PDB) on consumers’ behaviour towards Facebook advertising. A systematic review of privacy literature was undertaken to answer the research question. This paper reveals that protection of consumers’ privacy in Facebook is in deficit, and it further hypothesises that PDB influences consumers’ behaviour negatively by discouraging both acceptance and engagement with ads. Moreover, PDB influences ad avoidance positively. Likewise, it influences consumers’ psychology by increasing privacy concerns and emotional violation and reducing trust concurrently. The findings of this study are not confirmatory; thus, a scope for further empirical research to test the developed model and inclusion of other mediating and moderating constructs is provided. Practically, this paper recommends tough personal data protection regulations and privacy policy that prohibit Facebook and other SNS from online tracking of consumers. Also, Facebook should build trust and revise privacy settings to enable consumers to opt in or out of receiving ads. Finally, this paper’s theoretical contribution is the model which proposes that perceived data breach affects consumers’ behaviour towards Facebook advertising both directly and indirectly through psychological mediating variables.

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Retailers gather data about customers’ online behavior to develop personalized service offers. Greater personalization typically increases service relevance and customer adoption, but paradoxically, it also may increase customers’ sense of vulnerability and lower adoption rates. To demonstrate this contradiction, an exploratory field study on Facebook and secondary data about a personalized advertising campaign indicate sharp drops in click-through rates when customers realize their personal information has been collected without their consent. To investigate the personalization paradox, this study uses three experiments that confirm a firm's strategy for collecting information from social media websites is a crucial determinant of how customers react to online personalized advertising. When firms engage in overt information collection, participants exhibit greater click-through intentions in response to more personalized advertisements, in contrast with their reactions when firms collect information covertly. This effect reflects the feelings of vulnerability that consumers experience when firms undertake covert information collection strategies. Trust-building marketing strategies that transfer trust from another website or signal trust with informational cues can offset this negative effect. These studies help unravel the personalization paradox by explicating the role of information collection and its impact on vulnerability and click-through rates.
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The development of computing technologies and the Internet has made it possible to capture, save and analyze increasing amounts of personal information, leading to increased public concern over privacy. The present article analyzes individuals' Internet privacy concerns with respect to social networking sites. We study data on a set of 22,253 individuals in 26 EU countries, collected in December 2009 by Eurobarometer. We use an ordered logit model to examine the variables associated with the probability of increased concerns over privacy, in order to draw policy implications. The results show that national efforts to safeguard personal data positively affect perceived privacy. We observe also that both cultural and socio-demographic variables affect the level of privacy concerns.
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This study attempts to identify the potential determinants of advertising avoidance in the context of personalized advertising media, including unsolicited commercial e-mail, postal direct mail, telemarketing, and text messaging. Using a self-administered survey (n = 442), the proposed model is tested with structural equation modeling analysis. The findings indicate that while ad skepticism partially mediates the relationship between ad avoidance and its three determinants (perceived personalization, privacy concerns, and ad irritation), both privacy concerns and ad irritation have a direct positive effect on ad avoidance. However, increased perceived personalization leads directly to decreased ad avoidance.
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Privacy is one of the few concepts that has been studied across many disciplines, but is still difficult to grasp. The current understanding of privacy is largely fragmented and discipline-dependent. This study develops and tests a framework of information privacy and its correlates, the latter often being confused with or built into definitions of information privacy per se. Our framework development was based on the privacy theories of Westin and Altman, the economic view of the privacy calculus, and the identity management framework of Zwick and Dholakia. The dependent variable of the model is perceived information privacy. The particularly relevant correlates to information privacy are anonymity, secrecy, confidentiality, and control. We posit that the first three are tactics for information control; perceived information control and perceived risk are salient determinants of perceived information privacy; and perceived risk is a function of perceived benefits of information disclosure, information sensitivity, importance of information transparency, and regulatory expectations. The research model was empirically tested and validated in the Web 2.0 context, using a survey of Web 2.0 users. Our study enhances the theoretical understanding of information privacy and is useful for privacy advocates, and legal, management information systems, marketing, and social science scholars.
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The Federal Trade Commission (FTC) is one of many organizations studying influences on consumer privacy online. The authors investigate these influences, taking into consideration the current body of literature on privacy and the Internet and the FTC's core principles of fair information practice. The authors analyze these influences to assess the underlying factors of privacy concern online. The authors examine the current recommendations and actions of the FTC in light of the results of an e-mail survey of online consumers in the United States that assessed their attitudes toward privacy online. The authors find that the FTC's core principles address many of online consumers' privacy concerns. However, two factors not directly incorporated in the five principles, the relationships between entities and online users and the exchange of information for appropriate compensation, may influence consumers' privacy concerns.
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Consumer privacy is a public policy issue that has received substantial attention over the last thirty years. The phenomenal growth of the Internet has spawned several new concerns about protecting the privacy of consumers. The authors examine both historical and conceptual analyses of privacy and discuss domestic and international regulatory and self-regulatory approaches to confronting privacy issues on the Internet. The authors also review ethical theories that apply to consumer privacy and offer specific suggestions for corporate ethical policy and public policy as well as a research agenda.
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This study was designed ca provide insights into why people avoid advertising on the Internet. Recent negative trends in Internet advertising, such a.s "banner blindness" and extremely low click-through rates, make it imperative to study various factors affecting Internee ad avoidance. Accordingly, this study builds a comprehensive theoretical model explaining advertising avoidance on the Internet, We examined three latent variables of Internet ad avoidance: perceived goal impediment, perceived ad clutter, and prior negative experience. We found that these constructs successfully explain why people cognitively, affectively, and behaviorally avoid advertising messages on the Internet. Perceived goal impediment Is found to be the most significant antecedent explaining advertising avoidance on the Internet.
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Purpose This study seeks to explain a buyer's response to a seller's violation of trust. Four negative responses (decline in trust, negative emotions, negative word‐of‐mouth (WOM) and reduction in repurchase intentions) and four explanatory variables (magnitude of violation, integrity versus capability‐based cause of failure, perceived likelihood of repeated violations and stage of trust prior to the violation) were identified. The study develops and tests hypotheses regarding the possible influence of the explanatory variables on each of the four negative responses. Design/methodology/approach An experiment was conducted in which business professionals were given one of 16 scenarios, varied by levels of the four explanatory variables, describing a violation of trust in a business‐to‐business service situation. Respondents were asked questions regarding their probable response. Four‐way ANCOVA was used to analyze the results. Findings The study finds that stage of trust and perceived likelihood of repeated violation had significant main effects on decline in trust, negative WOM and repurchase intentions. Integrity‐based attribution influenced decline in trust, but magnitude of violation had no main effects. Three significant interactions were found. Research limitations/implications Findings show the importance of first impressions and reputation. Care should be taken to assure customers that violations will not be repeated. A major limitation was that scenarios cannot induce the same intensity of thought and emotion that real situations do. Originality/value Despite extensive literature in service failure and recovery, this is perhaps the first study to rigorously examine and seek to explain a buyer's response to a seller's violation of trust.
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This 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 with posted 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 data to target and personalize ads. After the introduction of improved privacy controls, users were twice as likely to click on personalized ads. There was no comparable change in the effectiveness of ads that did not make explicit that they used private information when targeting. The increase in effectiveness was larger for ads that used more unique private information to personalize their message.
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Internet technology has made possible the widespread dissemination of individualized media messages, but we know very little about their psychological import. A between-subjects experiment (N =60) with three levels of customization (low, medium, high) was designed to examine whether greater levels of personalized content engender more positive attitudes. The results not only confirm this hypothesis but also reveal the mediating role played by users’ perceptions of relevance, involvement, interactivity, and novelty of portal content. In addition, customization has behavioral effects in that it affects users’ browsing activity.
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This article examines online behaviors that increase or reduce risk of online identity theft. The authors report results from three consumer surveys that indicate the propensity to protect oneself from online identity theft varies by population. The authors then examine attitudinal, behavioral, and demographic antecedents that predict the tendency to protect one's privacy and identity online. Implications and suggestions for managers, public policy makers, and consumers related to protecting online privacy and identity theft are provided.
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With Rogers' protection motivation theory as the theoretical framework, this study identified determinants of young adolescents' level of privacy concerns, which, in turn, affects their resultant coping behaviors to protect privacy. Survey data from 144 middle school students revealed that perceived risks of information disclosure increased privacy concerns, whereas perceived benefits offered by information exchange decreased privacy concerns. Subsequently, privacy concerns had an impact on risk-coping behaviors such as seeking out interpersonal advice or additional information (e.g., privacy statement) or refraining from using Web sites that ask for personal information. Counter to our expectation, privacy self-efficacy did not appear to be related to privacy concerns. Implications of privacy education to protect online privacy among young adolescents were discussed.
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A survey of 1,000 Chicago-area consumers suggests that concern about privacy issues varies depending on the situation, the company conducting the marketing activities, and the consumer's own personal need for the products being sold. In addition, the survey found that certain kinds of consumers are more negative about potential threats to their privacy than are others.