Effect of location-based advertising filtering mechanism in smart service

Abstract

Location-based advertising (LBA) refers to the delivery of marketing messages to mobile devices based on consumer location. The literature finds that LBA improves marketing effectiveness; however, distrust threatens consumers’ acceptance of LBA. This research suggests that an LBA filtering mechanism, which allows consumers to select advertising categories according to their preferences autonomously, may overcome the distrust. Its effect was empirically investigated in a smart retailing service platform. Two field experiments were conducted in a large shopping center with a total of 360 consumers. The results reveal that filtered (vs. unfiltered) LBA leads to more favorable behavioral intention through serial mediation of reduced psychological distance and enhanced trust. Moreover, the effect of LBA filtering in reducing psychological distance is more prominent for consumers with a prevention (vs. promotion) focus and with (vs. without) a purchase plan. The findings have implications for the system design and marketing of LBA.