Will Consumers Risk Privacy for Incentives in Mobile Advertising? A Cross-Cultural Examination of the U.S. and South Korea: An Abstract

Mobile advertising has become an important digital marketing tool for marketers to reach targeted consumers worldwide. Much research has been done on identifying factors influencing consumers’ adoption and usage of mobile advertising based on established theoretical frameworks such as Theory of Reasoned Action and Technology Acceptance Model. However, prior researches largely failed to give specific considerations of the unique characteristics of mobile communication such as being highly personal, interactive, and location sensitive. To address this issue, this study focuses on two most relevant but under-examined factors affecting mobile advertising effectiveness including incentives and privacy concerns in a cross-cultural setting of the U.S. and South Korea. South Korea and the U.S. are selected because both countries are leading players in the mobile advertising market and they represent two largely different cultures, which warrant meaningful cross-cultural comparisons. Our results show that incentive was a positive and significant influencing factor in both South Korea and the U.S and the effect is stronger in the South Korean sample than that of in the U.S. sample. Similarly, privacy concerns was a significant negative factor of consumers’ intention to use mobile advertising in both countries. However, as an unexpected result, the impact of privacy concerns on consumers’ attitude towards mobile advertising is stronger in South Korea than in the U.S. Moreover, in both markets, we found that beliefs about mobile advertising significantly influence consumers’ attitude towards mobile advertising (ATMA), which in turn influences intention to use mobile advertising and purchase intention. Specifically, perceived informational usefulness, perceived entertainment usefulness and perceived ease of use emerged as significant benefits influencing consumers’ attitude toward mobile advertising. Perceived entertainment usefulness emerged as the strongest influencing factor on ATMA in both countries. Therefore, increasing the entertainment value for users is key to increase the effectiveness of mobile advertising. Perceived social usefulness is a significant predictor among Korean consumers but not among Americans. This can be attributed to the individualistic culture orientation in the U.S. South Korea is a typical collective culture in which social relations are important and emphasized in people’s everyday life.