MIT: Personalized Ads Don't Always Work

  • June 1, 2011
Personalized advertising isn't all it's been cracked up to be. Contrary to popular practice, personalized ads not only don't drive conversions, but are likely to be ignored, according to the study by MIT Sloan School of Management Prof. Catherine Tucker and London Business School Prof. Anja Lambrecht. The data for the project were provided by Havas Digital from the Artemis Database.

Using data from an online travel firm, Tucker and Lambrecht addressed the question 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 advertising is effective.

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 were closer to a purchase -- then personalized ads became more effective than generic ads intended for a mass audience. --Tanya Irwin

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2 comments about "MIT: Personalized Ads Don't Always Work ".
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  1. Paul Benjou from The Center for Media Management Strategies, June 2, 2011 at 1:14 p.m.

    This reference to effectiveness can also be applied to long-tail and exact search queries .... resulting in higher value prospects.

    Paul Benjou

  2. Michael Kelley from AdGenesis, June 2, 2011 at 4:34 p.m.

    At AdGenesis, we are called by TechCrunch the "match.com" of consumers and brands. Working through publishing partners, we provide a private label solution offering readers/viewers brands, rewards and offers matched to their lives. How? We politely ask. We don't ask about purchase history. We ask about near term purchase intentions and lifestyle information that has given over 100 volunteered data points per active user. As a result, when we send a user a video, reward and offer from a brand of interest, we see no less than 10% click-thru rates. While we agree with the conclusion that hitting people when they are about to buy, we are concerned that the "personalized advertising" not being as effective is too broad of a stroke to use in every regard. Michael Kelley, CMO, AdGenesis

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