This study aims to investigate the influence of advertising value and privacy concerns on consumers’ intention to use location-based advertising. It also explores if brand trust toward location-based advertising providers and consumers’ privacy self-efficacy reduce privacy concerns.
Based on the privacy calculus and expectancy theory, a conceptual model is developed and empirically tested through structural equation modeling using cross-sectional data of 1,121 actual smartphone users from Germany.
Advertising value positively and privacy concerns negatively affect consumers’ intention to use location-based advertising. As expected, brand trust and consumers’ privacy self-efficacy can reduce consumers’ privacy concerns.
Further research should test and validate the proposed framework in other cultures to gain insights into the culturally specific relevance of privacy concerns and their antecedents. The current study includes sociodemographics as potential moderators; additional studies could investigate other potential moderators (e.g. personality, values).
To reduce consumers’ privacy concerns, location-based advertising providers should make their offers transparent and give consumers control, to increase their privacy self-efficacy. They also should work to strengthen their brand, monitor brand trust trends and avoid any trust-damaging behavior.
This study introduces brand trust toward location-based advertising providers and privacy self-efficacy as factors to reduce consumers’ privacy concerns. It also encompasses a broader, general sample of consumers, which increases the generalizability and practical relevance of the results and supports an initial investigation of sociodemographic factors as potential moderators in this context.
