Springer Nature is making SARS-CoV-2 and COVID-19 research free. View research | View latest news | Sign up for updates

The role of data privacy in marketing

Abstract

This paper captures the current state of privacy scholarship in marketing and related disciplines. We examine theoretical perspectives and empirical findings about data and information privacy grouped according to privacy’s role in society, the psychology of privacy, and the economics of privacy. Although a coherent subset of research themes provide deep understanding, theoretical and empirical findings show this narrow focus also has constrained our view of privacy to consumer, organizational, ethical, or legal silos. In response, we take a necessary step toward expanding the privacy domain across these borders, emphasizing the compelling synergies that span multiple interests. We conclude by highlighting future research themes that embody a multidimensional approach, which blends the many interconnected concerns that feature in contemporary privacy questions in marketing. Since internal and external stakeholders are affected in multiple and potentially unforeseen ways by data privacy issues, additional work in this space remains critical and needed.

This is a preview of subscription content, log in to check access.

Fig. 1

Notes

  1. 1.

    An excellent example involves Indian citizens’ widespread rejection of the Free Basics initiative by Facebook, which offered people limited access to the internet, including Facebook and select other websites. Mass protests occurred in the country to advocate for net neutrality and open access for all. This outcome surprised many experts who viewed the offer as an important step toward connectivity for the poor. Facebook has launched, or plans to launch Free Basics in more than 30 other developing and impoverished countries (BBC News).

  2. 2.

    The EFF index is comprised of five key protection areas including (1) following industry best practices, (2) telling users about government data demands, (3) disclosing data retention policies, (4) disclosing content removal requests, and (5) opposing government backdoor access to data (www.eff.org).

References

  1. Acquisti, A., John, L. K., & Loewenstein, G. (2012). The impact of relative standards on the propensity to disclose. Journal of Marketing Research, 49, 160–174.

  2. Acquisti, A., John, L. K., & Loewenstein, G. (2013). What is privacy worth? The Journal of Legal Studies, 42, 249–274.

  3. Aguirre, E., Mahr, D., Grewel, D., Ruyter, K. D., & Wetzels, M. (2015). Unraveling the personalization paradox: The effect of information collection and trust-building strategies on online advertisement effectiveness. Journal of Retailing, 91, 34–59.

  4. Aiken, K. D., & Boush, D. M. (2006). Trustmarks, objective-source ratings, and implied investments in advertising: Investigating online trust and the context-specific nature of internet signals. Journal of the Academy of Marketing Science, 34, 308–323.

  5. Altman, I. (1975). The environment and social behavior: Privacy, personal space, territory, and crowding. Monterey, CA: Brooks/Cole Publishing.

  6. Ashworth, L., & Free, C. (2006). Marketing dataveillance and digital privacy: Using theories of justice to understand consumers’ online privacy concerns. Journal of Business Ethics, 67, 107–123.

  7. Awad, N. F., & Krishnan, M. S. (2006). The personalization privacy paradox: an empirical evaluation of information transparency and the willingness to be profiled online for personalization. MIS Quarterly, 30, 13–28.

  8. Bart, Y., Shankar, V., Sultan, F., & Urban, G. L. (2005). Are the drivers and role of online trust the same for all web sites and consumers? A large-scale exploratory empirical study. Journal of Marketing, 69, 133–152.

  9. Bleier, A., & Eisenbeiss, M. (2015a). The importance of trust for personalized online advertising. Journal of Retailing, 91, 390–409.

  10. Bleier, A., & Eisenbeiss, M. (2015b). Personalized online advertising effectiveness: The interplay of what, when, and where. Marketing Science, 34, 669–688.

  11. Bloom, P. N., Milne, G. R., & Adler, R. (1994). Avoiding misuse of new information technologies: legal and societal considerations. Journal of Marketing, 58, 98–110.

  12. Bowie, N. E., & Jamal, K. (2006). Privacy rights on the internet: Self-regulation or government regulation? Business Ethics Quarterly, 16, 323–342.

  13. Brandimarte, L., Acquisti, A., & Lowenstein, G. (2012). Misplaced confidences: privacy and the control paradox. Social Psychological and Personality Science, 4, 341–347.

  14. Brehm, J. W. (1966). A theory of psychological reactance. Oxford, England: Academic Press.

  15. Brodie, R. J., Hollebeek, L. D., Juric, B., & Lilc, A. (2011). Customer engagement: Conceptual domain, fundamental propositions, and implications for research. Journal of Service Research, 14, 252–271.

  16. Campbell, K., Gordon, L. A., Loeb, M. P., & Zhou, L. (2003). The economic cost of publicly announced information security breaches: Empirical evidence from the stock market. Journal of Computer Security, 11, 431–448.

  17. Casadesus-Masanell, R., & Hervas-Drane, A. (2015). Competing with privacy. Management Science, 61, 229–246.

  18. Caudill, E. M., & Murphy, P. E. (2000). Consumer online privacy: legal and ethical issues. Journal of Public Policy & Marketing, 19(1), 7–19.

  19. Chellappa, R. K., & Sin, R. G. (2005). Personalization versus Privacy: An empirical examination of the online consumer’s dilemma. Information Technology and Management, 6, 181–202.

  20. Chung, T. S., Wedel, M., & Rust, R. T. (2016). Adaptive personalization using social networks. Journal of the Academy of Marketing Science, 44, 66–87.

  21. Conitzer, V., Taylor, C. R., & Wagman, L. (2012). Hide and seek: Costly consumer privacy in a market with repeat purchases. Marketing Science, 31, 277–292.

  22. Culnan, M. J., & Armstrong, P. K. (1999). Information privacy concerns, procedural fairness, and impersonal trust: An empirical investigation. Organization Science, 10(1), 104–115.

  23. Culnan, M. J., & Bies, R. J. (2003). Consumer privacy: Balancing economic and justice considerations. Journal of Social Issues, 59(2), 323–343.

  24. Culnan, M. J., & Williams, C. C. (2009). How ethics can enhance organization privacy: Lessons from the Choice Point and TJX data breaches. MIS Quarterly, 33, 673–687.

  25. Dinev, T., & Hart, P. (2004). Internet privacy concerns and their antecedents measurement validity and a regression model. Behaviour & Information Technology, 23, 413–422.

  26. Dolnicar, S., & Jordaan, Y. (2007). A market-oriented approach to responsibly managing information privacy concerns in direct marketing. Journal of Advertising, 36, 123–149.

  27. Duhigg, C. (2012). How companies learn your secrets. In New York Times Magazine .Retrieved April 4, 2016 from www.nytimes.com/2012/02/19/magazine

  28. Dunfee, T. W., Smith, N. C., & Ross, W. T. (1999). Social contracts and marketing ethics. Journal of Marketing, 3, 14–32.

  29. Emerson, R. M. (1976). Social exchange theory. Annual Review of Sociology, 2, 335–362.

  30. Ernst & Young (2015), Megatrends 2015: Making sense of a world in motion. EY Global Report.

  31. European Commission (2016). EU Commission and United States agree on new framework for transatlantic data flows: EU-US Privacy Shield. Retrieved April 4, 2016 from http://europa.eu/rapid/press-release_IP-16-216_en.htm.

  32. Ferrell, O. C., & Gresham, L. G. (1985). A contingency framework for understanding ethical decision making in marketing. Journal of Marketing, 49, 87–96.

  33. Fong, N. M., Fang, Z., & Luo, X. (2015). Geo-conquesting: Competitive locational targeting of mobile promotions. Journal of Marketing Research, 52, 726–735.

  34. Foxman, E. R., & Kilcoyne, P. (1993). Marketing practice, and consumer privacy: Ethical issues. Journal of Public Policy & Marketing, 12, 106–119.

  35. Gabisch, J. A., & Milne, G. R. (2014). The impact of compensation on information ownership and privacy control. Journal of Consumer Marketing, 31, 13–26.

  36. Goldfarb, A., & Tucker, C. (2011a). Online display advertising: targeting and obtrusiveness. Marketing Science, 30, 389–404.

  37. Goldfarb, A., & Tucker, C. E. (2011b). Privacy regulation and online advertising. Management Science, 57, 57–71.

  38. Goldfarb, A., & Tucker, C. (2012). Shifts in privacy concerns. American Economic Review, 102, 349–353.

  39. Goldfarb, A., & Tucker, C. (2013). Why managing customer privacy can be an opportunity. MIT Sloan Management Review, 54, 10–12.

  40. Goodman, M. (2016). Future crimes: Inside the digital underground and the battle for our connected world. New York: Anchor Books.

  41. Hann, I. H., Hui, K. L., Tom Lee, S. Y., & Png, I. P. L. (2007). Overcoming online information privacy concerns: An information-processing theory approach. Journal of Management Information Systems, 24, 13–42.

  42. Hovav, A., & D’Arcy, J. (2003). The impact of denial-of-service attack announcements on the market value of firms. Risk Management & Insurance Review, 6, 97–121.

  43. John, L. K., Acquisti, A., & Loewenstein, G. (2011). Strangers on a plane: Context-dependent willingness to divulge sensitive information. Journal of Consumer Research, 37, 858–873.

  44. Jones, M. G. (1991). Privacy: A significant marketing issue for the 1990s. Journal of Public Policy & Marketing, 10, 133–148.

  45. Kahneman, D. (2003). A perspective on judgement and choice: mapping bounded rationality. American Psychologist, 58, 697–720.

  46. Kannan, K., Rees, J., & Sridhar, S. (2007). Market reactions to information security breach announcements: An empirical analysis. International Journal of Electronic Commerce, 12, 69–91.

  47. Kshetri, N. (2014). Big data’s impact on privacy, security and consumer welfare. Telecommunications Policy, 38, 1134–1145.

  48. Laczniak, G. R., & Murphy, P. E. (2006). Marketing, consumers, and technology: Perspectives for enhancing ethical transactions. Business Ethics Quarterly, 16, 313–321.

  49. Langenderfer, J., & Miyazaki, A. D. (2009). Privacy in the information economy. The Journal of Consumer Affairs., 43, 380–388.

  50. Lanier Jr., C. D., & Saini, A. (2008). Understanding consumer privacy: A review and future directions. Academy of Marketing Science Review, 12, 1–45.

  51. Lenard, T. M., & Rubin, P. H. (2010). In defense of data: Information and the costs of privacy. Policy & Internet, 2, 149–183.

  52. Lichtblau, E., & Apuzzo, M. (2016). Justice department calls Apple’s refusal to unlock iPhone a ‘marketing strategy.’ New York Times. Retrieved March 11, 2016, from www.nytimes/2016/02/20/business/.

  53. Lwin, M., Wirtz, J., & Williams, J. D. (2007). Consumer online privacy concerns and responses: A power-responsibility equilibrium perspective. Journal of the Academy of Marketing Science, 35, 572–585.

  54. Maignan, I., & Ferrell, O. C. (2004). Corporate social responsibility and marketing: An integrative framework. Journal of the Academy of Marketing Science, 32, 3–19.

  55. Malhotra, A., & Malhotra, C. K. (2011). Evaluating customer information breaches as service failures: An event study approach. Journal of Service Research, 14, 44–59.

  56. Malhotra, N. K., Kim, S. S., & Agarwal, J. (2004). Internet users’ information privacy concerns: The construct, the scale, and a causal model. Information Systems Research, 15, 336–355.

  57. Manjoo, F. (2015). ‘Right to be forgotten’ online could spread. In New York Times .Retrieved April 4, 2016 from www.nytimes.com/2015/09/06/technology

  58. Martin, K. (2015). Privacy notices as tabula rasa: An empirical investigation into how complying with a privacy notice is related to meeting privacy expectations online. Journal of Public Policy & Marketing., 34, 210–227.

  59. Martin, K. D., Borah, A., & Palmatier, R. W. (2016). Data privacy: Effects on customer and firm performance. Journal of Marketing, In-Press. doi:10.1509/jm.15.0497.

  60. Milberg, S. J., Smith, H. J., & Burke, S. J. (2000). Information privacy: Corporate management and national regulation. Organization Science, 11, 35–57.

  61. Milne, G. R., & Bahl, S. (2010). Are there differences between consumers’ and marketers’ privacy expectations? A segment-and technology-level analysis. Journal of Public Policy & Marketing, 29, 138–149.

  62. Milne, G. R., Rohm, A. J., & Bahl, S. (2004). Consumers’ protection of online privacy and identity. Journal of Consumer Affairs, 38, 217–232.

  63. Milne, G. R., Culnan, M. J., & Greene, H. (2006). A longitudinal assessment of online privacy notice readability. Journal of Public Policy & Marketing, 25, 238–249.

  64. Miyazaki, A. D. (2008). Online privacy and the disclosure of cookie use: Effects on consumer trust and anticipated patronage. Journal of Public Policy & Marketing., 27, 19–33.

  65. Miyazaki, A. D., & Fernandez, A. (2000). Internet privacy and security: An examination of online retailer disclosures. Journal of Public Policy & Marketing, 19, 54–61.

  66. Miyazaki, A. D., & Krishnamurthy, S. (2002). Internet seals of approval: Effects on online privacy policies and consumer perceptions. Journal of Consumer Affairs, 36, 28–49.

  67. Moon, Y. (2000). Intimate exchanges: using computers to elicit self-disclosure from consumers. Journal of Consumer Research, 26, 323–337.

  68. Morey, T., Forbath, T., & Schoop, A. (2015). Customer data: Designing for transparency and trust. Harvard Business Review, 93, 96–105.

  69. Mothersbaugh, D. L., Foxx II, W. K., Beatty, S. E., & Wang, S. (2012). Disclosure antecedents in an online service context: The role of sensitivity of information. Journal of Service Research, 15, 76–98.

  70. Murphy, P. E., Laczniak, G. R., Bowie, N. E., & Klein, T. A. (2005). Ethical marketing. Upper Saddle River, NJ: Pearson.

  71. Nill, A., & Aalberts, R. J. (2014). Legal and ethical challenges of online behavioral targeting in advertising. Journal of Current Issues and Research in Advertising, 35, 126–146.

  72. Nissenbaum, H. (2010). Privacy in context: Technology, policy, and the integrity of social life. Palo Alto, CA: Stanford University Press.

  73. Norberg, P. A., & Horne, D. R. (2014). Coping with information requests in marketing exchanges: An examination of pre-post affective and behavioral coping. Journal of the Academy of Marketing Science, 42, 415–429.

  74. O’Reilly, L. (2015). Microsoft has finally abandoned its Google-bashing ‘Scroogled’ ad campaign. In Business Insider .Retrieved March 11, 2016 from www.businessinsider.com

  75. Ohlhausen, M. K. (2014). Privacy challenges and opportunities: The role of the Federal Trade Commission. Journal of Public Policy & Marketing, 33, 4–9.

  76. Palmatier, R. W., Dant, R. P., Grewal, D., & Evans, K. R. (2006). Factors influencing the effectiveness of relationship marketing: A meta-analysis. Journal of Marketing, 70, 136–153.

  77. Peterson, A. (2016). FCC cracks down on Verizon Wireless for using ‘supercookies.’ Washington Post. Retrieved March 11, 2016 from www.washingtonpost.com/news/.

  78. Phelps, J., Nowak, G., & Ferrell, E. (2000). Privacy concerns and consumer willingness to provide personal information. Journal of Public Policy & Marketing, 19, 27–41.

  79. Ponemon Institute (2015). 2015 Cost of data breach study: Global analysis. Ponemon Institute Research Report, available at (www.ibm.com/services).

  80. Rainie, L., & Duggan, M. (2016). Privacy and information sharing. In Pew Reseach Center .Retrieved April 4, 2016 from www.pewinternet.org

  81. Rawls, J. (1971). A theory of justice. Cambridge, MA: Harvard University Press.

  82. Romanosky, S., Hoffman, D., & Acquisti, A. (2014). Empirical analysis of data breach litigation. Journal of Empirical Legal Studies, 11(1), 74–104.

  83. Rust, T. R., Kannan, P. K., & Peng, N. (2002). The customer economics of internet privacy. Journal of the Academy of Marketing Science, 30, 455–464.

  84. Schlosser, A. E., White, T. B., & Lloyd, S. M. (2006). Converting web site visitors: Investment increases consumer trusting beliefs and online purchase intentions. Journal of Marketing, 70, 133–148.

  85. Schumann, J. H., Wangenheim, F. V., & Groene, N. (2014). Targeted online advertising reciprocity appeals to increase acceptance among users of free web services. Journal of Marketing, 78, 59–75.

  86. Sen, R., & Borle, S. (2015). Estimating the contextual risk of data breach: An empirical approach. Journal of Management Information Systems, 32(2), 314–341.

  87. Sheehan, K. B. (2005). In poor health: An assessment of privacy policies at direct-to-consumer websites. Journal of Public Policy & Marketing, 24(2), 273–283.

  88. Sheehan, K. B., & Hoy, M. G. (1999). Flaming, complaining, abstaining: how online users respond to privacy concerns. Journal of Advertising, 28(3), 37–51.

  89. Sheehan, K. B., & Hoy, M. G. (2000). Dimensions of privacy concern among online consumers. Journal of Public Policy & Marketing, 19(1), 62–73.

  90. Singer, N. (2012), Mapping, and sharing, the consumer genome. New York Times. Retrieved April 4, 2016 from www.nytimes/2012/06/17/technology.

  91. Smith, J. H., Milberg, S. J., & Burke, J. B. (1996). Information privacy: Measuring individuals’ concerns about organizational practices. MIS Quarterly, 167–196.

  92. Solove, D. J. (2008). Understanding privacy. Cambridge, MA: Harvard University Press.

  93. Solove, D. J. (2011). Nothing to hide: The false tradeoff between privacy and security. New Haven, CT: Yale University Press.

  94. Tirunillai, S., & Tellis, G. J. (2014). Mining marketing meaning from online chatter: strategic brand analysis of big data using latent Dirichlet allocation. Journal of Marketing Research, 51, 463–479.

  95. Tsai, J. Y., Egelman, S., Cranor, L., & Acquisti, A. (2011). The effect of online privacy information behavior: An experimental study. Information Systems Research, 22, 254–268.

  96. Tucker, C. E. (2014). Social networks, personalized advertising and privacy controls. Journal of Marketing Research, 51, 1547–7193.

  97. Vail, M. W., Earp, J. B., & Antón, A. I. (2008). An empirical study of consumer perceptions and comprehension of web site privacy policies. IEEE Transactions on Engineering Management, 55, 442–454.

  98. Warren, S., & Brandeis. L. (1890). The Right to Privacy. In F. Schoeman (Ed.), Philosophical Dimensions of Privacy (pp. 75–103). Cambridge: Cambridge University Press (Originally published in Harvard Law Review, 4 p. 193).

  99. Westin, A. (1967). Privacy and freedom. New York: Antheneum.

  100. White, T. B. (2004). Consumer disclosure and disclosure avoidance: a motivational framework. Journal of Consumer Psychology, 14, 41–51.

  101. White House (2012). Consumer data privacy in a networked world: A framework for protecting privacy and promoting innovation in the global digital economy. D.C.: Washington.

  102. White House (2014). Big data: Seizing opportunities, preserving values. D.C.: Washington.

  103. White, T. B., Zahay, D. L., Thorbjørnsen, H., & Shavitt, S. (2008). Getting too personal: Reactance to highly personalized email solicitations. Marketing Letters, 19, 40–50.

  104. Wirtz, J., & Lwin, M. O. (2009). Regulatory focus theory, trust, and privacy concern. Journal of Service Research, 20, 1–18.

  105. Xu, H., Teo, H. H., Tan, B. C. Y., & Agarwal, R. (2012). Effects of individual self-protection industry self-regulation, and government regulation on privacy concerns: A study of location based services. Information Systems Research, 23, 1342–1363.

Download references

Acknowledgments

The authors are grateful for the insightful feedback of the Editor-in-Chief and the anonymous reviewers.

Author information

Correspondence to Kelly D. Martin.

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Martin, K.D., Murphy, P.E. The role of data privacy in marketing. J. of the Acad. Mark. Sci. 45, 135–155 (2017). https://doi.org/10.1007/s11747-016-0495-4

Download citation

Keywords

  • Privacy
  • Big data
  • Ethics
  • Review article