Using privacy calculus theory to explore entrepreneurial directions in mobile location-based advertising: Identifying intrusiveness as the critical risk factor

Location-based advertising is an entrepreneurial and innovative means for advertisers to reach out through personalised messages sent directly to mobile phones using their geographic location. The mobile phone users’ willingness to disclose their location and other personal information is essential for the successful implementation of mobile location-based advertising (MLBA). Despite the potential enhancement of the user experience through such personalisation and the improved interaction with the marketer, there is an increasing tension between that personalisation and mobile users’ concerns about privacy. While the privacy calculus theory (PCT) suggests that consumers make privacy-based decisions by evaluating the benefits any information may bring against the risk of its disclosure, this study examines the specific risks and benefits that influence consumers’ acceptance of MLBA. A conceptual model is proposed based on the existing literature and a standardised survey was developed and targeted at individuals with known interests in the subject matter. From these requests, 252 valid responses were received and used to evaluate the key benefits and risks of MLBA from the users’ perspectives. While the results confirmed the importance of internet privacy concerns (IPC) as an important determinant, they also indicate that monetary rewards and intrusiveness have a notably stronger impact on acceptance intentions towards MLBA. Intrusiveness is the most important risk factor in determining mobile users’ intentions to accept MLBA and therefore establishing effective means of minimising the perceived intrusiveness of MLBA can be expected to have the greatest impact on achieving effective communications with mobile phone users.