How consumers cope with location-based advertising (LBA) and personal information disclosure: The mediating role of persuasion knowledge, perceived benefits and harms, and attitudes toward LBA

Abstract

While the practice of sending out location-based advertising (LBA) messages via smart devices is increasingly popular, relatively little is known about how consumers cope with such personalized advertising messages and the disclosure of their personal information. Applying the persuasion knowledge model (PKM), we propose that consumers form attitudes and behavioral intentions based on their persuasion knowledge and their understanding of how LBA works, which affect their assessment of its benefits and harms. Perhaps more importantly, we examine different dimensions of persuasion knowledge by exploring to what extent objective and subjective persuasion knowledge have differential impacts on consumers’ benefit/harm assessments as well as attitudinal responses to LBA. A total of 246 useable responses were obtained from an online survey and structural equation modeling was employed for data analyses. The results confirmed the proposed model; consumers cope with LBA by making assessments of benefits (financial and utility benefits) and harms (privacy concerns) based on their persuasion knowledge (objective and subjective) and form attitudes toward LBA, which ultimately affect their intention to disclose personal information as well as their decision to accept or reject LBA.