How Information-Use Transparency Affects the Effectiveness of Location Targeting: When Privacy Disclosures Help and When They Backfire

Targeted advertising can increase ad effectiveness through personalization but may also evoke privacy concerns. Using two online experiments and a field experiment, this research examines how location targeting specificity and information-use transparency affect consumers’ click intentions and actual click behavior. Results show that more specific location targeting increases perceived personalization and consumer engagement. Consumers simultaneously weigh perceived personal relevance against perceived privacy intrusiveness when deciding whether to engage with an advertisement. The effects of transparency are context dependent: transparency mitigates privacy-related avoidance under less specific targeting, but increases privacy concerns when highly specific targeting makes personal data use particularly salient.Management SlantMore specific location targeting increases consumers’ overall intention to click and click behavior.Consumers’ clicking intentions reflect a tradeoff between perceived relevance and perceived privacy intrusiveness.Information-use transparency has a nuanced effect; failing to provide consumers with transparency increases the negative effect of perceived privacy intrusiveness and thereby reduces intention to click.Advertisers should calibrate transparency to the level of targeting specificity rather than treating transparency disclosures as universally beneficial.