Abstract
This research examines the impact of an online platform’s revenue model on consumers’ ethical inferences of the company. We demonstrate that consumers perceive online platforms that employ the advertising-based revenue model to be less ethical than platforms that employ the service-fee-based revenue model because platforms that adopt the advertising-based revenue model are thought to be less consumer-serving motivated (Study 1). The unfavorable ethical inferences induced by the advertising-based revenue model further lower consumers’ intention to disclose personal information and the intention to generate positive word of mouth for the company (Study 2 and Study 3). We further find that allowing consumers to skip advertisements (Study 4) does not improve the less favorable ethical inferences while using resources for public-service advertisements does (Study 5). These findings advance the understanding of consumers’ ethical inferences regarding business models and provide insights for managers to develop effective strategies to alleviate less favorable ethical inferences.
Similar content being viewed by others
References
Amit, R., & Zott, C. (2012). Creating value through business model innovation. MIT Sloan Management Review, 53(3), 41.
Anderson, E. W., Fornell, C., & Mazvancheryl, S. K. (2004). Customer satisfaction and shareholder value. Journal of Marketing, 68(4), 172–185.
Anderson, E. W., & Mittal, V. (2000). Strengthening the satisfaction-profit chain. Journal of Service Research, 3(2), 107–120.
Bei, L. T., & Chiao, Y. C. (2001). An integrated model for the effects of the perceived product, the perceived service quality, and perceived price fairness on consumer satisfaction and loyalty. Journal of Consumer Satisfaction, Dissatisfaction and Complaining Behavior, 14, 125.
Belanche, D., Flavián, C., & Pérez-Rueda, A. (2020). Consumer empowerment in interactive advertising and eWOM consequences: The PITRE model. Journal of Marketing Communications, 26(1), 1–20.
Brady, F. N., & Dunn, C. P. (1995). Business meta-ethics: An analysis of two theories. Business Ethics Quarterly, 5(3), 385–398.
Brunk, K. H. (2010). Exploring origins of ethical company/brand perceptions—A consumer perspective of corporate ethics. Journal of Business Research, 63(3), 255–262.
Campbell, M. C. (1999). Perceptions of price unfairness: Antecedents and consequences. Journal of Marketing Research, 36(2), 187–199.
Carrigan, M., & Attalla, A. (2001). The myth of the ethical consumer–do ethics matter in purchase behaviour? Journal of Consumer Marketing, 18(7), 560–578.
Carson, T. L., Wokutch, R. E., & Cox, J. E. (1985). An ethical analysis of deception in advertising. Journal of Business Ethics, 4(2), 93–104.
Cheung, M. F., & To, W. M. (2020). The effect of consumer perceptions of the ethics of retailers on purchase behavior and word-of-mouth: The moderating role of ethical beliefs. Journal of Business Ethics. https://doi.org/10.1007/s10551-020-04431-6.
Clement, J. (2020a). Global YouTube advertising revenues 2017–2019. Retrieved 23 September, 2020, from https://www.statista.com/statistics/289658/youtube-global-net-advertising-revenues/.
Clement, J. (2020b). YouTube usage penetration in the United States 2020, by age group. Retrieved 23 September, 2020, from https://www.statista.com/statistics/296227/us-youtube-reach-age-gender/.
Creyer, E. H. (1997). The influence of firm behavior on purchase intention: Do consumers really care about business ethics? Journal of Consumer Marketing, 14(6), 421–432.
Creyer, E. H., & Ross, W. T. (1996). The impact of corporate behavior on perceived product value. Marketing Letters, 7(2), 173–185.
Dean, D. H. (2003). Consumer perception of corporate donations effects of company reputation for social responsibility and type of donation. Journal of Advertising, 32(4), 91–102.
Dean, D. H. (2004). Consumer reaction to negative publicity: Effects of corporate reputation, response, and responsibility for a crisis event. The Journal of Business Communication (1973), 41(2), 192–211.
DeCarlo, T. E. (2005). The effects of sales message and suspicion of ulterior motives on salesperson evaluation. Journal of Consumer Psychology, 15(3), 238–249.
Edwards, S. M., Li, H., & Lee, J. H. (2002). Forced exposure and psychological reactance: Antecedents and consequences of the perceived intrusiveness of pop-up ads. Journal of Advertising, 31(3), 83–95.
Ferrell, O. C., & Ferrell, L. (2008). A macromarketing ethics framework: Stakeholder orientation and distributive justice. Journal of Macromarketing, 28(1), 24–32.
Flammer, C. (2013). Corporate social responsibility and shareholder reaction: The environmental awareness of investors. Academy of Management Journal, 56(3), 758–781.
Folkes, V. S., & Kamins, M. A. (1999). Effects of information about firms’ ethical and unethical actions on consumers’ attitudes. Journal of Consumer Psychology, 8(3), 243–259.
Gesenhues, A. (2019). Facebook ad revenue tops $16.6 billion, driven by Instagram, Stories. Retrieved 23 September, 2020, from https://martechtoday.com/despite-ongoing-criticism-facebook-generates-16-6-billion-in-ad-revenue-during-q4-up-30-yoy-230261.
Godfrey, P. C., Merrill, C. B., & Hansen, J. M. (2009). The relationship between corporate social responsibility and shareholder value: An empirical test of the risk management hypothesis. Strategic Management Journal, 30(4), 425–445.
Green, T., & Peloza, J. (2014). How do consumers infer corporate social responsibility? The role of organisation size. Journal of Consumer Behaviour, 13(4), 282–293.
Gruca, T. S., & Rego, L. L. (2005). Customer satisfaction, cash flow, and shareholder value. Journal of Marketing, 69(3), 115–130.
Ham, C.-D., Nelson, M. R., & Das, S. (2015). How to measure persuasion knowledge. International Journal of Advertising, 34(1), 17–53.
Hayes, A. F. (2018). Partial, conditional, and moderated moderated mediation: Quantification, inference, and interpretation. Communication Monographs, 85(1), 4–40.
Iqbal, M. (2020). Netflix Revenue and Usage Statistics (2020). Retrieved 23 September, 2020, from https://www.businessofapps.com/data/netflix-statistics/.
Jeong, H. J., & Lee, M. (2013). Effects of recommendation systems on consumer inferences of website motives and attitudes towards a website. International Journal of Advertising, 32(4), 539–558.
Kim, H., & Lee, T. H. (2018). Strategic CSR communication: A moderating role of transparency in trust building. International Journal of Strategic Communication, 12(2), 107–124.
Kim, H.-Y., & McGill, A. L. (2018). Minions for the rich? Financial status changes how consumers see products with anthropomorphic features. Journal of Consumer Research, 45(2), 429–450.
Klein, J., & Dawar, N. (2004). Corporate social responsibility and consumers’ attributions and brand evaluations in a product–harm crisis. International Journal of Research in Marketing, 21(3), 203–217.
Laczniak, G. R. (1983). Framework for analyzing marketing ethics. Journal of Macromarketing, 3(1), 7–18.
Li, H., Sarathy, R., & Xu, H. (2010). Understanding situational online information disclosure as a privacy calculus. Journal of Computer Information Systems, 51(1), 62–71.
Li, W., & Huang, Z. (2016). The research of influence factors of online behavioral advertising avoidance. American Journal of Industrial and Business Management, 6(09), 947.
Lichtenstein, D. R., Drumwright, M. E., & Braig, B. M. (2004). The effect of corporate social responsibility on customer donations to corporate-supported nonprofits. Journal of Marketing, 68(4), 16–32.
Limbu, Y. B., Wolf, M., & Lunsford, D. (2012). Perceived ethics of online retailers and consumer behavioral intentions: The mediating roles of trust and attitude. Journal of Research in Interactive Marketing, 6(2), 133–154.
Macdonald, J. E., & Beck-Dudley, C. L. (1994). Are deontology and teleology mutually exclusive? Journal of Business Ethics, 13(8), 615–623.
Marsden, J. L., & Thomas, B. G. (2013). Brand values: Exploring the associations of symmetry within financial brand marks. Design Management Journal, 8(1), 62–71.
Micewski, E. R., & Troy, C. (2007). Business ethics–deontologically revisited. Journal of Business Ethics, 72(1), 17–25.
Midha, V. (2012). Impact of consumer empowerment on online trust: An examination across genders. Decision Support Systems, 54(1), 198–205.
Mohr, L. A., Webb, D. J., & Harris, K. E. (2001). Do consumers expect companies to be socially responsible? The impact of corporate social responsibility on buying behavior. Journal of Consumer Affairs, 35(1), 45–72.
Montoya, A. K., & Hayes, A. F. (2017). Two condition within-participant statistical mediation analysis: A path-analytic framework. Psychological Methods, 22(1), 6–27.
Mpinganjira, M., & Maduku, D. K. (2019). Ethics of mobile behavioral advertising: Antecedents and outcomes of perceived ethical value of advertised brands. Journal of Business Research, 95, 464–478.
Muzellec, L., Ronteau, S., & Lambkin, M. (2015). Two-sided Internet platforms: A business model lifecycle perspective. Industrial Marketing Management, 45, 139–150.
Osterwalder, A., & Pigneur, Y. (2002). An e-business model ontology for modeling e-business. In 15th Bled Electronic Commerce Conference (pp. 75–91).
Reed, A., Aquino, K., & Levy, E. (2007). Moral identity and judgments of charitable behaviors. Journal of Marketing, 71(1), 178–193.
Rifon, N. J., Choi, S. M., Trimble, C. S., & Li, H. (2004). Congruence effects in sponsorship: The mediating role of sponsor credibility and consumer attributions of sponsor motive. Journal of Advertising, 33(1), 30–42.
Román, S., & Cuestas, P. J. (2008). The perceptions of consumers regarding online retailers’ ethics and their relationship with consumers’ general internet expertise and word of mouth: A preliminary analysis. Journal of Business Ethics, 83(4), 641–656.
Sen, S., & Bhattacharya, C. B. (2001). Does doing good always lead to doing better? Consumer reactions to corporate social responsibility. Journal of Marketing Research, 38(2), 225–243.
Seyedghorban, Z., Tahernejad, H., & Matanda, M. J. (2016). Reinquiry into advertising avoidance on the internet: A conceptual replication and extension. Journal of Advertising, 45(1), 120–129.
Shanahan, K. J., & Hyman, M. R. (2003). The development of a virtue ethics scale. Journal of Business Ethics, 42(2), 197–208.
Sherry, J. F. (1983). Gift giving in anthropological perspective. Journal of Consumer Research, 10(2), 157–168.
Shewan, D. (2018). Ethical marketing: 5 examples of companies with a conscience. Retrieved 23 September, 2020, from https://www.wordstream.com/blog/ws/2017/09/20/ethical-marketing.
Simpson, P. M., Brown, G., & Widing, R. E. (1998). The association of ethical judgment of advertising and selected advertising effectiveness response variables. Journal of Business Ethics, 17(2), 125–136.
Van Doorn, J., & Hoekstra, J. C. (2013). Customization of online advertising: The role of intrusiveness. Marketing Letters, 24(4), 339–351.
Van Quaquebeke, N., & Giessner, S. R. (2010). What does your logo really tell consumers. Harvard Business Review, 88(12), 30.
Watson, A. (2002). Netflix's annual revenue 2002–2019. Retrieved 23 September, 2020, from https://www.statista.com/statistics/272545/annual-revenue-of-netflix/.
Xia, L., Monroe, K. B., & Cox, J. L. (2004). The price is unfair! A conceptual framework of price fairness perceptions. Journal of Marketing, 68(4), 1–15.
Xie, G. X., Madrigal, R., & Boush, D. M. (2015). Disentangling the effects of perceived deception and anticipated harm on consumer responses to deceptive advertising. Journal of Business Ethics, 129(2), 281–293.
Yang, L. W., Aggarwal, P., & McGill, A. L. (2019). The 3 C’s of anthropomorphism: Connection, comprehension, and competition. Consumer Psychology Review, 3(1), 3–19.
Yoo, C. Y., & Jeong, H. J. (2014). Brand transparency in social media: Effects of message sidedness and persuasion knowledge. The Journal of Advertising and Promotion Research, 3(2), 5–44.
Yu, L., Li, H., He, W., Wang, F. K., & Jiao, S. (2020). A meta-analysis to explore privacy cognition and information disclosure of internet users. International Journal of Information Management, 51, 102015.
Funding
This research was supported by grants from the National Natural Science Foundation of China (Grant No. 71772045).
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Ethical Approval
All procedures performed in studies involving human participants were in accordance with the 1964 Helsinki declaration and its later amendments. This article does not contain any studies with animals performed by any of the authors.
Informed Consent
Informed consent was obtained from all individual participants included in the study.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Su, Y., Jin, L. The Impact of Online Platforms’ Revenue Model on Consumers’ Ethical Inferences. J Bus Ethics 178, 555–569 (2022). https://doi.org/10.1007/s10551-021-04798-0
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10551-021-04798-0