Person:

John, Leslie

Given the increasingly specific ways marketers can target ads, many consumers and regulators are demanding ad transparency: disclosure of how consumers’ personal information was used to generate ads. We investigate how and why ad transparency impacts ad effectiveness. Drawing on literature about offline norms of information-sharing, we posit that ad transparency backfires when it exposes marketing practices that violate norms about “information flows”—consumers’ beliefs about how their information ought to move between parties. Study 1 inductively shows that consumers deem information flows acceptable (or not) based on whether their personal information was: 1) obtained within versus outside of the website on which the ad appears and 2) stated by the consumer versus inferred by the firm (the latter of each pair being less acceptable). Studies 2 and 3 show that revealing unacceptable information flows reduces ad effectiveness, which is driven by increasing consumers’ relative concern for their privacy over desire for the personalization that such targeting affords. Study 4 shows the moderating role of platform trust: when consumers trust a platform, revealing acceptable information flows increases ad effectiveness. Studies 5a and 5b, conducted in the field with a loyalty program website (i.e., a trusted platform), demonstrate this benefit of transparency.

Consumers readily indicate liking options that appear dissimilar—for example, enjoying both rustic lake vacations and chic city vacations or liking both scholarly documentary films and action-packed thrillers. However, when predicting other consumers’ tastes for the same items, people believe that a preference for one precludes enjoyment of the dissimilar other. Five studies show that people sensibly expect others to like similar products but erroneously expect others to dislike dissimilar ones (Studies 1 and 2). While people readily select dissimilar items for themselves (particularly if the dissimilar item is of higher quality than a similar one), they fail to predict this choice for others (Studies 3 and 4)—even when monetary rewards are at stake (Study 3). The tendency to infer dislike from dissimilarity is driven by a belief that others have a narrow and homogeneous range of preferences (Study 5).

As technological advances enable consumers to share more information in unprecedented ways, today’s disclosure takes on a variety of new forms, triggering a paradigm shift in what “disclosure” entails. This review introduces two factors to conceptualize consumer disclosure: how (i.e., actively versus passively) and between whom (i.e., consumers and/or firms) disclosure occurs. We begin by exploring the drivers of active disclosure occurring in both social and commercial contexts: characteristics of (1) the discloser, (2) the situation in which the disclosure occurs, (3) the information being disclosed, and (4) others. Additionally, we review the limited but growing research on passive disclosure by focusing on (1) inferences observers make based on passively shared information, and (2) expectations disclosers have regarding the use and collection of passively shared information. Because the current understanding of passive disclosure is limited, we also outline what we see as fruitful avenues of future research. We conclude by pointing out what we perceive as key managerial insights.

Firms are increasingly giving consumers the vote. Eight studies demonstrate that when firms empower consumers to vote, consumers infer a series of implicit promises—even in the absence of explicit promises. We identify three implicit promises to which consumers react negatively when violated: representation (Experiments 1A–1C); consistency (Experiment 2), and non-suppression (Experiment 3). However, when firms honor these implicit promises, voting can mitigate the disappointment that arises from receiving an undesired outcome (Experiment 4). Finally, Experiment 5 identifies one instance when suppressing the vote outcome is condoned: when voters believe that the process of voting has resulted in an unacceptable outcome. More generally, we show that procedural justice plays a key mediating role in determining the relative success or failure of various empowerment initiatives—from soliciting feedback to voting. Taken together, we offer insight into how firms can realize the benefits of empowerment strategies while mitigating their risks.