HONG KONG, July 20, 2011 - (ACN Newswire) - When consumers research a product online, a big question for marketers is whether or not to tailor advertisements to individuals' interests. If you're looking at a pair of running shoes on a website, how effective would it be for an ad for those shoes to pop up again later on in an ad on an unrelated website?
Maybe that ad would persuade you to buy the shoes, but it is unlikely to have any effect at all, according to a recent study by Anja Lambrecht, Assistant Professor of Marketing at London Business School and Catherine Tucker, Assistant Professor of Marketing at MIT Sloan School of Management.
Lambrecht and Tucker used data provided by Havas Digital from Artemis, the advertising company's digital and campaign management and optimisation system, which enables marketers to collect data and evaluate their campaign's performance.
The objective was to address the questions of whether it is always optimal for advertisers to provide more specific ad content based on consumers' earlier product interests, as well as when increased specificity of information in an ad is effective. In their study, consumers who had looked at a company's specific products were randomly shown either a generic or a personalised ad. The company then tracked whether consumers ultimately purchased one of its products.
People who saw the personalised product information were on average less likely to buy a product on the day they were shown the ad than the people who were shown the more generic ad. Highly-specific ads were generally not more effective than generic messages. This goes against the conventional wisdom that more specificity is always good.
However, Lambrecht and Tucker did find that under certain circumstances, this type of specific ad did work. The key, they said, was whether the consumer had developed well-defined product preferences at the time they saw the ad. When online shoppers were simply looking at a product category, ads that matched their prior web browsing interests were ineffective. However, after consumers had visited a review site to seek out information about product details - and had better defined what product they were looking for and were closer to a purchase - then personalised ads became more effective than generic ads intended for a mass audience.
As a result, notes Lambrecht, marketers should carefully evaluate when to use new online advertising techniques, paying attention to how they can identify whether a consumer thinks broadly about a product category or seeks out detailed information. "In our study, we took visiting a category review site as an indicator for being likely to have well-defined product preferences. Consumers who had visited these sites to compare products reacted more positively to an ad that specifically reflected the product they had looked at earlier. But if they had not yet visited a category review site, they were more responsive to generic messages."
This was a "big surprise," says Tucker, as there has been a lot of excitement about using this new technique in online advertising where marketers can reach consumers with messages that are a better fit based on their known interests. "But it turns out that just because you have the data to personalise, it doesn't mean you always should," she says.
The results of the study are published in, "When does Retargeting Work? Timing Information Specificity".
The full paper can be found at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1795105
About London Business School
London Business School's purpose is to deliver insights and leaders that have impact. The School is ranked number one in the world for the full-time MBA programme*. In research, the School is ranked top ten and holds the highest average research score of any UK academic institution**.
The School's faculty, from over 30 countries, is grouped into seven subject areas - Accounting; Economics; Finance; Management Science and Operations; Marketing; Organisational Behaviour; and Strategic and International Management.
Studying at the School provides access to an unmatched diversity of thought. With a presence in four international cities - London, New York, Hong Kong and Dubai - the School is well positioned to equip students from more than 130 countries with the capabilities needed to operate in today's business environment. Students further benefit from our 30,000 alumni who provide a wealth of knowledge, business experience and worldwide networking opportunities.
The School awards over 1,000 degrees every year, across MBA, Executive MBA, Masters in Finance, Sloan Fellow and PhD programmes and has most recently added Masters in Management to its portfolio. The Executive Education team offers a portfolio of over 30 open programmes as well as custom-designed programmes developed to meet the specific needs of individuals and their organisation. Annually, over 8,000 participants attend executive programmes that are led by many of the world's leading business thinkers. www.london.edu
* Financial Times MBA 2009,2010 and 2011 Rankings
** Research Assessment Exercise (RAE) 2008
About Havas Digital
Havas Digital is the umbrella company that manages all Havas Media's interactive companies: Havas Digital is the umbrella holding company that manages all Havas Media's interactive companies, Media Contacts and Lattitud, global interactive media networks; iGlue, new independent interactive media network; Mobext, mobile advertising network; Archibald Ingall Stretton, creative interactive network quickly expanding around the globe; and N2, offering digital strategy services in France.
Havas Digital brands provide data driven marketing solutions across all interactive channels: digital, direct response, relationship based media, and design. Havas Digital's companies work and complement each other bringing together professional expertise, proven strategic insight, and Artemis(R), an advanced proprietary digital campaign management and optimization system, which allows the group agencies to maximize impact for the advertiser interactive marketing investment. Artemis enables the centralization and analysis of data coming from all online and offline interactive media, and provides a better understanding of advertising campaign performance.
Havas Digital's brands currently operate from 54 cities in 42 different countries across Europe, North America, South America, Asia, Africa and Australia, serving over 400 clients, including the market leaders in many industries such as: Air France, Danone, Expedia, Fidelity, France Telecom, Hyundai Kia, Nike, Peugeot/Citroen, Repsol, Reckitt Benckiser and Vodafone, amongst others.
This press release is issued on behalf of the London Business School by Strategic Public Relations Group (SPRG). For further information, please contact:
Strategic Public Relations Group (SPRG)
Tel: +852 2114 4350 / 9492 8298
Tel: +852 2114 4992 / 9226 9011
Fax: +852 2114 0880
London Business School
Tel: + 44 207 000 7112
Topic: Research / Industry Report
Source: London Business School
Sectors: Retail & eCommerce, Daily Finance
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