  In response to privacy concerns about collecting and using personal data, the
online advertising industry has been developing privacy-enhancing technologies
(PETs), e.g., under Google's Privacy Sandbox initiative. In this research, we
use the dual-privacy framework, which postulates that consumers have intrinsic
and instrumental preferences for privacy, to understand consumers' perceived
privacy violations (PPVs) for current and proposed online advertising
practices. The key idea is that different practices differ in whether
individual data leaves the consumer's machine or not and in how they track and
target consumers; these affect, respectively, the intrinsic and instrumental
components of privacy preferences differently, leading to different PPVs for
different practices. We conducted online studies focused on consumers in the
United States to elicit PPVs for various advertising practices. Our findings
confirm the intuition that tracking and targeting consumers under the industry
status quo of behavioral targeting leads to high PPV. New technologies or
proposals that ensure that data are kept on the consumer's machine lower PPV
relative to behavioral targeting but, importantly, this decrease is small.
Furthermore, group-level targeting does not differ significantly from
individual-level targeting in reducing PPV. Under contextual targeting, where
there is no tracking, PPV is significantly reduced. Interestingly, with respect
to PPV, consumers are indifferent between seeing untargeted ads and no ads when
they are not being tracked. We find that consumer perceptions of privacy
violations under different tracking and targeting practices may differ from
what technical definitions suggest. Therefore, rather than relying solely on
technical perspectives, a consumer-centric approach to privacy is needed, based
on, for instance, the dual-privacy framework.
