The effects of fair information practices on ad effectiveness among Chinese consumers: trust transfer across contexts

Abstract

ABSTRACT In response to growing privacy concern among global online consumers, platform companies may follow principles of fair information practices (FIPs) to foster consumer trust, which subsequently shapes the effectiveness of digital ads displayed by the platform. However, the connection between FIPs and advertising perceptions remains underresearched in existing literature. By establishing and testing a dual context framework that integrates theories of procedural fairness, trust transfer and regulatory focus, this study investigates the psychological mechanism driving the effects of FIPs on targeted ads. The results show that FIPs arouse consumers’ platform trust via perceived fairness, followed by a transference of trust from the platform to the ads, thereby amplifying positive responses to targeted ads. Whereas privacy concern is reduced by platform trust, its hypothesised effects on ad effectiveness were not supported. Our findings underscore a cross-context trust transference embedded in social platforms for advertising, whereby trust enhancement (relative to privacy concern reduction) directly boosts ad perceptions, thus, offering valuable insights on the practices of digital platform managers and e-marketers.