The Welfare Impact of Targeted Advertising Technologies

2021 ◽  
Author(s):  
Veronica Marotta ◽  
Yue Wu ◽  
Kaifu Zhang ◽  
Alessandro Acquisti
Keyword(s):  
Personal Information ◽  
Online Advertising ◽  
Complete Information ◽  
Consumer Welfare ◽  
Two Dimensions ◽  
Consumer Information ◽  
Targeted Advertising ◽  
Consumer Data ◽  
Welfare Implications ◽  
Types Of Information

We analyze the welfare implications of consumer data sharing, and restrictions to that sharing, in the context of online targeted advertising. Targeting technologies offer firms the ability to reach desired audiences through intermediary platforms. The platforms run auctions in real time to display ads on internet sites, leveraging consumers’ personal information collected online to personalize the ads. The online advertising industry posits that targeted advertising benefits advertising firms (that is, merchants who want to target ads to the desired consumers), consumers who see ads for preferred products, and the intermediary platforms that match consumers with firms. However, the claims that targeted advertising benefits all players involved have not been fully vetted in the literature. We develop an analytical model to analyze the economic and welfare implications of targeting technologies for those three players under alternative consumer information regimes. The regimes differ in the type and amount of consumer data available to the intermediary and to the advertising firms, and reflect the presence or absence of technological or regulatory restrictions to personal information flows. We find evidence of incentive misalignment among the players, as the intermediary prefers to share only a subset of consumer information with firms, whereas advertising firms prefer having complete information about the consumers. As such, a strategic intermediary with the ability to control which information is shared during the auction can have an incentive to use only the information that maximizes its payoff, overlooking the interests of both advertising firms and consumers. The information regimes that maximize consumer welfare vastly differ depending on consumers’ heterogeneity along two dimensions: a horizontal dimension, capturing consumer’s heterogeneity in product preferences; and a vertical dimension, capturing consumers’ heterogeneity in purchase power. Consumers prefer none of their personal information to be used for targeting only in limited circumstances. Otherwise, consumers are either indifferent or prefer only specific types of information to be used for targeting.

scholarly journals Learning from the Dark Web: leveraging conversational agents in the era of hyper-privacy to enhance marketing

2019 ◽  
Vol 48 (1) ◽  
pp. 43-63 ◽  
Author(s):  
Felipe Thomaz ◽  
Carolina Salge ◽  
Elena Karahanna ◽  
John Hulland
Keyword(s):  
Complex System ◽  
Information Sharing ◽  
Personal Information ◽  
Consumer Information ◽  
Conversational Agents ◽  
Self Disclosure ◽  
Consumer Data ◽  
Dark Web ◽  
The Web

Abstract The Web is a constantly evolving, complex system, with important implications for both marketers and consumers. In this paper, we contend that over the next five to ten years society will see a shift in the nature of the Web, as consumers, firms and regulators become increasingly concerned about privacy. In particular, we predict that, as a result of this privacy-focus, various information sharing and protection practices currently found on the Dark Web will be increasingly adapted in the overall Web, and in the process, firms will lose much of their ability to fuel a modern marketing machinery that relies on abundant, rich, and timely consumer data. In this type of controlled information-sharing environment, we foresee the emersion of two distinct types of consumers: (1) those generally willing to share their information with marketers (Buffs), and (2) those who generally deny access to their personal information (Ghosts). We argue that one way marketers can navigate this new environment is by effectively designing and deploying conversational agents (CAs), often referred to as “chatbots.” In particular, we propose that CAs may be used to understand and engage both types of consumers, while providing personalization, and serving both as a form of differentiation and as an important strategic asset for the firm—one capable of eliciting self-disclosure of otherwise private consumer information.

The Value of Consumer Data in Online Advertising

2017 ◽  
Vol 16 (3) ◽  
pp. 269-289
Author(s):  
Marc Bourreau ◽  
Bernard Caillaud ◽  
Romain de Nijs
Keyword(s):  
Information Disclosure ◽  
Value Of Information ◽  
Online Advertising ◽  
Personal Data ◽  
Specific Information ◽  
Incremental Value ◽  
Imperfectly Competitive ◽  
Social Returns ◽  
Consumer Data ◽  
The Cost

Abstract In this paper we propose a model where consumer personal data have multidimensional characteristics, and are used by platforms to offer ad slots with better targeting possibilities to a market of differentiated advertisers through real-time auctions. A platform controls the amount of information about consumers that it discloses to advertisers, thereby affecting the dispersion of advertisers’ valuations for the slot. We first show by way of simulations that the amount of consumer-specific information that is optimally revealed to advertisers increases with the degree of competition on the advertising market and decreases with the cost of information disclosure for a monopolistic platform, competing platforms or a welfare-maximizing platform, provided the advertising market is not highly concentrated. Second, we exhibit different properties between the welfare-maximizing situation and the imperfectly competitive market situations with respect to how the incremental value of information varies: there are decreasing social returns to consumers’ data, while private returns may be increasing or decreasing locally.

Inhibitory Control of Information in Memory Across Domains

2021 ◽  
Vol 30 (5) ◽  
pp. 444-453
Author(s):  
M. Teresa Bajo ◽  
Carlos J. Gómez-Ariza ◽  
Alejandra Marful
Keyword(s):  
Decision Making ◽  
Problem Solving ◽  
Side Effects ◽  
Inhibitory Control ◽  
Language Production ◽  
Personal Information ◽  
Control Process ◽  
Control Mechanisms ◽  
Types Of Information ◽  
Behavioral Signature

Knowledge in memory is vast and not always relevant to the task at hand. Recent views suggest that the human cognitive system has evolved so that it includes goal-driven control mechanisms to regulate the level of activation of specific pieces of knowledge and make distracting or unwanted information in memory less accessible. This operation is primarily directed to facilitate the use of task-relevant knowledge. However, these control processes may also have side effects on performance in a variety of situations when the task at hand partly relies on access to suppressed information. In this article, we show that various types of information to be used in a variety of different contexts (problem solving, decision making based on personal information, language production) may be the target of inhibitory control. We also show that the control process may leave a behavioral signature if suppressed information turns out to be relevant shortly after being suppressed.

AI and privacy concerns: a smart meter case study

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Jillian Carmody ◽  
Samir Shringarpure ◽  
Gerhard Van de Venter
Keyword(s):  
Private Information ◽  
Personal Information ◽  
Consumer Information ◽  
Data Sets ◽  
Smart Meter ◽  
Smart Meters ◽  
Content Type ◽  
Privacy Concerns ◽  
Privacy Legislation

Purpose The purpose of this paper is to demonstrate privacy concerns arising from the rapidly increasing advancements and use of artificial intelligence (AI) technology and the challenges of existing privacy regimes to ensure the on-going protection of an individual’s sensitive private information. The authors illustrate this through a case study of energy smart meters and suggest a novel combination of four solutions to strengthen privacy protection. Design/methodology/approach The authors illustrate how, through smart meter obtained energy data, home energy providers can use AI to reveal private consumer information such as households’ electrical appliances, their time and frequency of usage, including number and model of appliance. The authors show how this data can further be combined with other data to infer sensitive personal information such as lifestyle and household income due to advances in AI technologies. Findings The authors highlight data protection and privacy concerns which are not immediately obvious to consumers due to the capabilities of advanced AI technology and its ability to extract sensitive personal information when applied to large overlapping granular data sets. Social implications The authors question the adequacy of existing privacy legislation to protect sensitive inferred consumer data from AI-driven technology. To address this, the authors suggest alternative solutions. Originality/value The original value of this paper is that it illustrates new privacy issues brought about by advances in AI, failings in current privacy legislation and implementation and opens the dialog between stakeholders to protect vulnerable consumers.

scholarly journals INFORMATION SUPPORT OF ASSESSMENT OF THE IMPACT OF BUSINESS PARTNERS IN THE CONDITIONS OF INTERNATIONAL ECONOMIC ACTIVITY

2021 ◽  
Author(s):  
Nataliia Kara ◽  
◽  
Iryna Protsyk ◽  
Keyword(s):  
International Economic ◽  
Economic Activity ◽  
Marketing Research ◽  
Growth Efficiency ◽  
Complete Information ◽  
Information Support ◽  
Economic Activities ◽  
Business Partners ◽  
Types Of Information ◽  
The Impact

The article examines the features of information support for assessing the impact of business partners in the conditions of international economic activity. Methodical and practical recommendations for the procedure and accumulation of information about the company's partners have been developed. The theoretical and methodological basis of the study there are the works of the Ukrainian and foreign scientists, regulational and legislational laws of Ukraine for information support and evaluation of partnerships of the enterprise. The information factor affects economic growth, efficiency and employment. Information at the enterprise is mainly considered in the form of data collected and systematized in an acceptable form for use, capable of accumulating, sharing and updating. Recently, information is increasingly considered as one of the types of organizational resources that exist in the form of certain scientific knowledge, results of research and development, generalized indicators, norms, standards, recommendations, results of marketing research and more. An important condition for assessing the impact of environmental factors on the production and economic activities of the enterprise is the availability of timely and sufficiently complete information about events, processes, trends that occur in the external environment. The paper also considers the stages of the process of evolution of types of information about the partners of the enterprise, the strategic advantages of the management information system (MIS). It is proposed to develop an information letter about business partners, which is entered in the database and file, as well as to create database management systems. It is also advisable to create an information department at the enterprise, which in particular will assess the impact of the company's partners, as long-term partnerships create their own statistical database for decision-making by the company's management.

Sponsored Data: Smarter Data Pricing with Incomplete Information

2021 ◽  
Author(s):  
Xiaowei Mei ◽  
Hsing Kenneth Cheng ◽  
Subhajyoti Bandyopadhyay ◽  
Liangfei Qiu ◽  
Lai Wei
Keyword(s):  
Consumer Surplus ◽  
Mobile Network ◽  
Complete Information ◽  
Consumer Welfare ◽  
High Definition ◽  
Mobile Data ◽  
Data Intensive ◽  
Data Consumption ◽  
New Business ◽  
The Impact

With the development of data-intensive internet services, the world has witnessed explosive growth in mobile data consumption during the last couple of years. The upcoming generation of 5G-capable phones and networks will continue and even accelerate that process. At the same time, consumers are becoming more conscious about their data consumption because their monthly caps of mobile data plans can be easily exhausted by premium content, such as high-definition videos and virtual-reality games. In response, the mobile network operators (MNOs) have proposed a new business model, the so-called sponsored data plans, to subsidize consumers by transferring at least part of the data bills from consumers to content providers. Although industry practitioners claim that sponsored data plans increase consumer welfare, our analysis reveals that the impact of sponsored data on consumer surplus depends crucially on whether the MNO has complete information of the consumers’ valuation of mobile data. Our analysis helps provide a clearer picture of the impact of sponsored data on consumer surplus while reconciling the conflicting views from scholars, digital rights groups, and the network carriers.

Behavioural Targeting in the Mobile Ecosystem

2016 ◽  
pp. 44-57
Author(s):  
José Luis Gómez-Barroso ◽  
Juan Ángel Ruiz
Keyword(s):  
Business Model ◽  
Personal Information ◽  
Personal Data ◽  
Intangible Asset ◽  
Mobile Environment ◽  
Comprehensive Description ◽  
Targeted Advertising ◽  
Mobile Ecosystem ◽  
Target Markets

Personal information is a key intangible asset for companies. In particular, for those companies that collect personal data to attract advertisers through being a channel to reach their target markets, i.e., through offering targeted advertising. A universe of always located and always connected potential consumers enhance the potential of behavioural targeting, which is seen as the business model on which the success of new mobile content, applications and services relies. This chapter aims to explain the implications of the use of behavioural targeting within the mobile environment. It provides an overview of the exploitation of personal data, a comprehensive description of the behavioural targeting ecosystem, and a view of the promises and pitfalls associated to the rise of mobility.

Competitive Effects of Purchase-Based Targeted Advertising

2012 ◽  
Vol 10 (4) ◽  
pp. 71-84
Author(s):  
Jianqiang Zhang ◽  
Weijun Zhong ◽  
Shue Mei
Keyword(s):  
Social Welfare ◽  
Product Differentiation ◽  
Price Competition ◽  
Consumer Surplus ◽  
Consumer Information ◽  
Competitive Effects ◽  
Targeted Advertising ◽  
Consumer Valuation ◽  
Competitive Environments ◽  
Second Period

This paper develops a two-period sales model to investigate the competitive effects of purchase-based targeted advertising. In the model, two competing firms gain consumer information during the first period sales, which allows them to target advertising based on consumer purchase history. Advertising is assumed to be persuasive in terms of consumer valuation enhancing and product differentiation increasing. The authors find that the firm’s ability to target can damage industry profits, consumer surplus, and even social welfare. The conditions under which targeted advertising is positive or negative are derived, showing that price competition is softened in the second period but intensified in the first. It is suggested that firms under competitive environments cautiously sponsor targeted advertising with appropriate contents.

scholarly journals An inter-disciplinary perspective on the information privacy issue in a global environment

2003 ◽  
Vol 6 (2) ◽  
pp. 384-398
Author(s):  
A. C. Jordaan ◽  
Y. Jordaan
Keyword(s):  
Personal Information ◽  
Information Privacy ◽  
Consumer Information ◽  
Global Environment ◽  
Production Model ◽  
Privacy Issue ◽  
Financial Interests ◽  
World Economic ◽  
Conceptual Paper ◽  
Fair Balance

The world economic system’s transformation from a dominantly mass-production model, to a mass-customisation model is seen as creating a demand for personal information on consumers. This has lead many consumers to feel the need to protect their information because businesses request personal information during commercial transactions. This conceptual paper addresses information privacy as a marketing-related issue with an inter-disciplinary nature and aims to illustrate how marketing and economics can work together in a more cohesive manner. The information privacy issue is presented as striking a fair balance between the privacy interests of consumers, the financial interests of businesses, and the sustainability of an economy in the global environment. The paper concludes that consumer information privacy will always remain an issue of protection for consumers, an ethical issue for marketers, and is fast becoming an issue of social responsibility for government.

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