Work

Advertising strategies of competing firms considering consumer privacy concerns

Year: 2023

Type: article

Abstract: Targeted advertising based on consumers' purchase history is the most prevalent choice for firms; however, its effectiveness is affected by an increase in consumer privacy concerns. We established a two‐period game model to analyze firms' equilibrium advertising strategies, pricing strategies, and profits when a segment of consumers is unwilling to provide their purchase information owing to privacy concerns. Based on the equilibrium results, some valuable managerial insights are suggested for competing firms. Firms should consider the proportion of privacy‐sensitive consumers and advertising costs when developing advertising strategies. Targeted advertising is not an optimal choice invariably.

Source: Managerial and Decision Economics

DOI: 10.1002/mde.3826

Authors: Yue Shen, Weijun Zhong, Shue Mei

Institution: Southeast University

Language: English

Topic: Consumer Market Behavior and Pricing

Subfield: Marketing

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

Funder: National Natural Science Foundation of China

Award: 电子商务中考虑消费者隐私信息关注的定向广告投放策略研究