An evaluation of personalized advertising and privacy trade-offs on consumer trust: Evidence from an online service in Kano.
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Background of the study
Personalized advertising uses consumer data to tailor marketing messages, enhancing relevance and engagement. However, this approach often involves trade-offs between personalization benefits and privacy concerns. In Kano, an online service has implemented personalized advertising strategies aimed at increasing user engagement and conversion rates. At the same time, the company faces growing consumer scrutiny over the extent of personal data usage and potential privacy intrusions (Adeniyi, 2023; Uche, 2024). This study investigates the balance between delivering personalized content and maintaining consumer trust in privacy. It explores the mechanisms of data collection, user profiling, and targeted messaging, while examining consumer attitudes toward these practices. The research assesses whether personalized advertising leads to higher satisfaction and loyalty or if privacy trade-offs result in skepticism and reduced trust. Additionally, the study evaluates the effectiveness of transparency measures, such as clear privacy notices and consent management systems, in mitigating negative perceptions. The goal is to provide actionable insights into optimizing personalized advertising strategies that do not compromise consumer privacy, thereby fostering a trustworthy digital environment that supports both business objectives and consumer rights.
Statement of the problem
Despite the benefits of personalized advertising, there is uncertainty regarding its impact on consumer trust when privacy trade-offs are involved. The online service in Kano faces challenges in balancing the need for data-driven personalization with the risk of infringing on consumer privacy. Consumers may feel uneasy if they perceive that their personal information is being over-utilized, leading to a decline in trust and engagement. Inconsistent communication about data usage and insufficient transparency further exacerbate these concerns. Without clear evidence linking personalized advertising practices to consumer trust, the company risks alienating its user base and undermining the effectiveness of its marketing efforts. This study seeks to address these issues by exploring the relationship between personalization, privacy trade-offs, and consumer trust (Okafor, 2024).
Objectives of the study:
To evaluate the impact of personalized advertising on consumer trust.
To examine the trade-offs between personalization benefits and privacy concerns.
To recommend strategies to optimize personalized advertising while safeguarding consumer privacy.
Research questions::
How does personalized advertising affect consumer trust?
What privacy trade-offs do consumers perceive in personalized advertising?
Which measures can enhance transparency and balance personalization with privacy?
Significance of the study
This study is significant for online services seeking to refine personalized advertising practices without compromising consumer privacy. It provides insights into the trade-offs involved and offers recommendations for enhancing transparency and trust. The findings help companies optimize their digital marketing strategies to maintain consumer confidence, ultimately improving engagement and loyalty. The research contributes to the broader understanding of privacy issues in digital marketing and informs industry best practices for balancing personalization with data protection (Ibrahim, 2024).
Scope and limitations of the study
The study is limited to an online service in Kano and focuses exclusively on the trade-offs between personalized advertising and privacy in relation to consumer trust.
Definitions of terms
Personalized advertising: Targeted marketing messages based on consumer data.
Privacy trade-offs: The balance between personalized services and the potential loss of privacy.
Consumer trust: The confidence consumers have in a company’s ability to protect their personal information.
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