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Triggering the Personalization Backfire Effect: The Moderating Role of Situational Privacy Concern.

Hyeongseok Kim1, Seunghee Han1

  • 1Department of Business Administration, Chung-Ang University, Seoul 06974, Republic of Korea.

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Summary

Personalized marketing can backfire when consumer privacy concerns are high. Highly intrusive personalization is less effective than moderate, contextual personalization, especially when privacy is a concern.

Keywords:
personalization–privacy paradoxpersonalized marketingprivacy concern

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Area of Science:

  • Consumer Psychology
  • Marketing Science
  • Digital Communication

Background:

  • Personalized marketing offers benefits but faces challenges from increasing consumer privacy concerns.
  • Understanding the failure points of personalization is crucial for effective marketing strategies.

Purpose of the Study:

  • To investigate the interaction between message personalization levels and situational privacy concerns.
  • To identify the tipping point at which personalization becomes counterproductive.

Main Methods:

  • A 3 (Message Personalization: Low, Medium, High) x 2 (Situational Privacy Concern: Low, High) between-subjects experiment was conducted with 360 participants.
  • Personalization levels ranged from generic messages to those using contextual data and personally identifiable information (PII).
  • Situational privacy concern was induced via a news article prime.

Main Results:

  • A significant interaction effect was observed, indicating a critical tipping point.
  • In low privacy concern conditions, increased personalization enhanced purchase intention.
  • When privacy concerns were activated, highly intrusive PII-based personalization backfired, becoming less effective than moderate personalization.

Conclusions:

  • Situational privacy concern moderates consumer responses to personalized marketing, triggering non-linear effects.
  • Activating consumer privacy concerns can lead to a backfire effect with highly intrusive personalization tactics.
  • Marketers must carefully calibrate data intrusiveness to avoid counterproductivity when consumer privacy sensitivities are heightened.