Chatbot Advertising As a Double-Edged Sword: The Roles of Regulatory Focus and Privacy Concerns

Abstract

In this article, the authors examine the effect of regulatory focus and privacy concerns on consumers' responses to highly personalized chatbot advertising. Findings from two experimental studies indicate that predominantly promotion-focused consumers are more receptive and respond more favorably to highly personalized chatbot advertising because they attend more to benefits they may gain from disclosing personal information. In contrast, consumers who are predominantly prevention focused are more attentive to the risks involved and feel unfavorably toward highly personalized chatbot advertising. In addition, consumers who are highly concerned about privacy disdain highly personalized ads, regardless of regulatory focus. Risk-benefit perceptions are shown to mediate interactions of ad personalization, regulatory focus, and privacy concerns.