Getting too personal: Reactance to highly personalized email solicitations

Research on the effects of personalized messages on consumers’ behavioral responses has yielded mixed findings. We explore how e-mail personalization influences click-through intentions. Our results suggest that consumers experience personalization reactance in response to highly personalized messages when the fit between the offer in the message and consumers’ personal characteristics is not explicitly justified by firms. Consequently, consumers are less willing to respond favorably to the offer. Results of two studies suggest that this effect primarily emerges for consumers who perceive the utility of the service to be relatively low. For those consumers with higher perceived utility, justification of personalization is less important because highly personalized messages are less likely to elicit reactance.     

How does ad relevance affect consumers' attitudes toward personalized advertisements and social media platforms? The role of information co-ownership,vulnerability, and privacy cynicism

Consumers' responses to the use of their personal data for personalized advertising by platform providers are paradoxical. Drawing from psychological ownership theory and the collective information boundary, this study examines how the social relevance and personal relevance of ads impact consumers' attitudes toward advertisements and social media platforms. Basing on 350 responses, we confirm that perceptions of information co-ownership and feelings of vulnerability play a serial mediating role in the positive relationship between ad relevance and consumer attitudes. Specifically, ad relevance increases consumers' perceptions of social media platforms as co-owners of their personal information, which in turn reduces feelings of vulnerability and improves their attitudes toward personalized advertisements and social media platforms. Privacy cynicism negatively moderates the indirect effects of information co-ownership perceptions on two attitude variables mediated through feelings of vulnerability. Our research findings provide a new perspective on the personalization–privacy paradox and offer platform providers new insights into improving their personalized advertising performance and user–platform relationships.     

The Importance of Trust for Personalized Online Advertising

With the amount of online advertising on a steady rise, generic ads noticeably lose effectiveness. In order to break through the clutter, retailers employ a method called retargeting to tailor their advertisements to individual consumers based on inferred interests and preferences. However, while personalization should generally make ads more appealing, the authors use field data to show that the effectiveness of retargeting considerably hinges on consumers’ trust in a respective retailer. To uncover the underlying mechanisms of this phenomenon, they investigate how trust moderates the impact of ad personalization on consumers’ internal and external responses in the lab. They propose a two-dimensional conceptualization of ad personalization: First, a banner's personalization depth defines how closely the ad reflects a consumer's interests. Second, its personalization breadth determines how completely the banner reflects these interests. The lab results show that more trusted retailers can increase the perceived usefulness of their ads through a combination of high depth and narrow breadth of personalization without eliciting increased reactance or privacy concerns. On the other hand, for less trusted retailers, banners with higher depth are not perceived more useful, but instead trigger increased reactance and privacy concerns, regardless of their personalization breadth. These effects directly translate into consumers’ click-through intentions so that retailers should adjust their personalization strategies accordingly in order to increase the effectiveness of their online advertising.     

How Does Web Personalization Create Value for Online Retailers? Lower Cash Flow Volatility or Enhanced Cash Flows

This study examines the performance consequences of web personalization (WP), a type of personalization in which web content is personalized and recommendations are offered based on customer preferences. Despite the growing popularity of personalization, there is a dearth of research at the firm level on whether and how web personalization creates shareholder value. We develop and test a conceptual model that proposes that the impact of WP on shareholder value is mediated by (1) cash flow volatility and (2) premium price. The hypotheses are tested based on 603 firm-quarter observations spanning 80 firms over six years in the online financial services industry. The results suggest that while WP lowers the volatility of cash flows, it only enables firms to charge premium prices when online trust is high. Additional tests reveal that the reduction in cash flow volatility is because of lower churn as opposed to acquiring new customers or greater cross-buying. Finally, online trust positively moderates the relationships between WP and cash flow volatility and price premia. Practical implications of the findings are discussed.     

Strategic Implications of Keeping Product Value Secret from Competitor’s Customers

Customers can sometimes learn unanticipated or hidden use value of a firm’s product whereas the non-customers remain uninformed about that extra value. A monopolist will increase its profit by informing the non-customers of its product’s hidden value. However, our analysis reveals that this may not be true when the firm faces competition in the market—the firm may actually make a higher profit if it keeps its hidden value secret from its competitor’s customers even if advertising to inform those customers is costless. This is because no advertising leads to information heterogeneity among consumers about the existence of the firm’s hidden value, which gives an incentive for both firms to continue targeting their own existing customers rather than poaching each other’s customers, alleviating price competition and increasing firms’ profits. This beneficial strategic effect of keeping some product value secret from the competitor’s customers can persist even when the firms anticipate the hidden value and compete more aggressively for customers in the early period. Our research suggests that firms can benefit from an “under-promise and over-deliver” strategy if they refrain from communicating their extra value to the competitor’s customers. Moreover, positive word of mouth about a firm’s product will not necessarily benefit the firm and can in fact make all firms worse off.     

Online service personalization for apparel shopping

This study explores the dynamics of online service personalization in the online apparel retailing context, with regard to customers’ actual online shopping activities. From an empirical study of American Internet shoppers (n=204), three types of widely-used online service personalization, that is (i) offer, (ii) recognition, and (iii) personal advice, were identified. Moreover, grounded by the Theory of Reasoned Action [Fishbein, M., Ajzen, I., 1975. Belief, Attitudes, Intention, Behavior: An Introduction to Theory and Research. Addison-Wesley, Reading, MA], relationships between customers’ online service personalization attitudes and their online shopping activities—regarding apparel items—have been investigated. Findings of this study empirically present the dynamics of online service personalization in the context of online apparel retailing. Also, the results show that customer online shopping experiences may impact on their online service personalization attitudes. Theoretical and managerial implications are also discussed regarding online service management. Based on the results, Internet-based apparel retailers may benefit from developing various types of personalization services by enhancing shopping intentions of their customers, in particular, of those who are loyal to the retailers.     

Personalization has a Price,Controllability is the Currency: Predictors for the Intention to use Personalized eGovernment Websites

Content personalization on government websites provides individuals with a personal selection of information. In this study, we determine the role of trust in a government organization, trust in the technology, and perceived controllability on the intention to use content personalization for eGovernment websites. A total of 1141 participants were presented with scenarios describing a nonpersonalized webpage and one of four approaches to online content personalization, followed by an online survey. Results were analyzed by means of structural equation modeling. Perceived controllability is the most important antecedent of the intention to use online content personalization for eGovernment; trust in the technology also has a considerable influence. Trust in the government organization plays a minor role. The adaptable approach to online content personalization has the highest likelihood of citizen acceptance. When designing personalized eGovernment information services, designers should instill a feeling of controllability over the coming about of tailored content and trust in the technology.     

Sense and sensibility in personalized e‐commerce: How emotions rebalance the purchase intentions of persuaded customers

This research develops and tests a theoretical model of customer persuasion in personalized online shopping, building on information processing theory, and addressing cognitive and affective stages of the persuasion process. Data from 582 experienced online customers were used to validate the proposed model through structural equation modeling and multigroup analysis. Results show that quality of personalization, message quality, and benefits of the personalized recommendations are important in the persuasion process. Positive emotions increase the effect of persuasion on purchase intentions, contrary to negative emotions. The study extends online personalization theory, offers an in‐depth analysis of the persuasion process in online shopping, and provides valuable recommendations for personalized online marketing.     

Effects of personalized e-mail messages on privacy risk: Moderating roles of control and intimacy

New communication platforms have enabled firms to collect personal data on their consumers and provide more personalized services. Personalized service facilitates interpersonal communication and interactions based on consumers’ personal and preference information, and therefore constitutes a way to improve firm–customer relationships. However, such personalized services may be vulnerable to privacy issues. This study investigates the effects of personalized e-mail messages (an archetypal example of personalized service) on consumers’ risk perceptions and two moderating variables: consumers’ control and message intimacy. In three experiments, we show that an increase in the level of personalization in e-mail messages increases consumers’ privacy risk perceptions. However, giving consumers more control over their personal information and adding intimate cues to e-mail messages moderate the negative effects of personalized e-mail messages on their privacy risk perceptions. The study provides important implications for both academics and managers in developing and employing personalized service in new media communication.     

Like or dislike? Adolescents’ responses to personalized social network site advertising

Increasingly, personal data posted by users of social network sites (SNSs) can be used to personalize advertising. The present study investigates how adolescents respond to personalized ads in terms of attitude toward the ad, brand engagement and intention to forward, and whether privacy concerns moderate their responses. According to pretest results, a medium level of personalization was expected to be optimal in terms of advertising effectiveness. A within-subjects experiment involving 40 participants aged 14–18 years was performed. Three conditions of personalized advertising were designed with, respectively, low, medium, and high levels of personalization. The study found that the highest personalization condition generated the most positive response and that privacy concerns did not moderate the effects of personalization. The privacy paradox is discussed as an alternative explanation, along with other implications of the results.     

Impact of personalization and privacy concerns on information disclosure and pricing

Advances in IT have enabled some firms to offer personalized products according to the private information disclosed by consumers, while others are still offering standardized products, which brings about asymmetric competition. For consumers, disclosing private information for personalized products leads to reduced misfit cost as well as privacy loss. To illuminate the impact of consumers' trade-off between the benefit of information disclosure and the associated privacy concerns on firms' asymmetric price competition, we consider a setting where only one firm is capable of product personalization based on consumers' personal information. The capable firm makes a profit from selling the product and monetizing consumers' information. We demonstrate that as the capable firm becomes more adept at personalization, he may raise or lower the price depending on his profit foci, and an improvement in his capability does not always guarantee a higher profit. Counterintuitively, an increase in the unit misfit cost (i.e., greater product differentiation) can, under certain circumstances, intensity price competition, making both firms worse off and leading to higher consumer surplus. We also show that when consumers are more privacy-concerned, there exists an indirect effect that weakens the impact of an increase in price on the monetization of consumers’ information, and hence price competition can be mitigated and both firms can be better off. Furthermore, we demonstrate that product personalization with misfit-reducing effect always increases consumer surplus under the asymmetric competition. Our findings provide firms and policy-makers with great managerial insights.     

Internet advertising effectiveness

Online advertising has experienced phenomenal growth since its inception in 1994. This empirical study investigates the impact of seven creative characteristics of banner ads on the effectiveness of online advertising using a multiple regression model. A random sample of 209 banner ads was drawn from a sampling frame of advertisers, provided by an advertising agency specialising in internet advertising for the gaming industry. The findings of this study are broadly consistent with past research into online advertising efficiency, indicating that the creative characteristics of effective banner ads in the online gaming arena include: a larger size, absence of promotional incentives and the presence of information about casino games. In contrast, banner features such as animation, action phrase and presence of company brand or logo were ineffective in generating clickthroughs. Contrary to expectations, long messages on banners were associated with higher click-through rates.     

Collaborating online: the roles of interactivity and personalization

Collaborating with customers is considered a new source of competitive advantage so customer participation and involvement are emerging as key strategic factors. This research studies how interactivity and personalization influence both customers' participation during the online purchase of information services and their intentions to continue participating. It also analyzes whether personalization and interactivity improve customer involvement with the service purchased in online environments. Results verify the importance of interactivity and personalization to foster customer participation, involvement and intentions to continue participating. Moreover, it is found that interactivity moderates the effect of personalization, increasing its influence on service involvement and intentions to participate. This paper demonstrates the convenience of analyzing involvement and participation together in order to understand customer collaboration, as well as the importance of the purchase context from a participation and socialization perspective in the services arena.     

The effects of perceived value on loyalty: the moderating effect of market orientation adoption

This paper aims to identify the moderating effect of service firms’ adoption of market orientation on key variables of consumer behavior, namely perceived value and loyalty. The study took a business-to-customer perspective. First, the adoption of market orientation was measured, from the firm’s point of view. Second, customer perceptions were analyzed, using the two variables perceived value and loyalty. The sample comprised 100 service firms and 572 of their customers. The present work provides original insights, identifying that the effect of perceived value on loyalty depends on other variables external to the consumer, such as the market orientation approach.     

Enhancing playful customer experience with personalization

Retailers develop personalized websites with the aim of improving customer experience. However, we still have limited knowledge about the effect of personalization on customer experience and the underlying processes. With a lab experiment, this research specifically examines the effect of actual personalization and perceived personalization on playful customer experience using both subjective and objective measures, with the support of eye-tracking techniques. We show that personalization, regardless of whether it is perceived or not, enhance the playful customer experience of a retailing website. In addition, we highlight the presence of two concomitant processes. Content needs to be perceived as personalized to influence the subjective playful customer experience, but actual personalization does influence objective playful customer experience. Although customers spend the same time on the website, they focus more of their attention on their favorite products when content is personalized. Such focused attention leads them to select their favorite products for purchase.     

Personalized charity advertising. Can personalized prosocial messages promote empathy,attitude change,and helping intentions toward stigmatized social groups?

This study examines the role of personalized charity advertising in promoting empathy, attitude change, and helping intentions toward stigmatized social groups. Based on theories of message involvement, empathy, and reactance, we predicted that higher levels of involvement elicited by a personalized charity advertisement would reinforce empathy and prosocial outcomes. An online experiment was conducted using a personalized and a nonpersonalized version of a charity advertisement for a campaign soliciting donations of winter coats for homeless people. As expected, structural equation modeling revealed a positive indirect effect of personalization on prosocial outcomes (attitudes and behavioural intentions toward homeless people, and willingness to donate to the campaign) that was mediated by involvement and empathy. However, in addition to promoting involvement and empathy, personalization also led to heightened reactance, which detracted from the positive effects. Theoretical as well as practical implications of the findings for personalized charity advertising are discussed.     

When can interaction orientation create more service value? The moderating role of frontline employees' trust in managers and employee deep acting

Despite the well-recognized importance of interaction orientation, limited studies have investigated its boundary conditions from the frontline employees' perspective. To address this issue, this study investigates the effect of interaction orientation in service value creation and identifies hierarchical trust and deep acting of frontline employees as two moderators. This study conducts a moderated regression analysis for hypotheses testing using a triadic data set of 2090 responses from managers, frontline employees, and customers of 209 firms. The findings show that interaction orientation has no effect on service value. Rather, interaction orientation contributes to perceived service value only when frontline employees have higher trust in their managers or when employee deep acting is high. The value of this study is in revealing the contingencies of interaction orientation on service value. It offers managerial implications that firms should build high trust in managers and encourage deep acting among frontline employees when implementing an interaction orientation strategy.     

Investigating when religious culture increases trade credit: A signaling theory approach

Drawing on signaling theory, we propose that religious culture leads suppliers to alter their beliefs about their customers’ trustworthiness. Strong religious cultures are interpreted as a signal of fewer agency problems and less information asymmetry, which helps firms gain more trade credit from suppliers. The empirical tests performed in this study show that firms headquartered in areas with strong religious cultures receive more trade credit than other firms. This positive relation is more prominent when such firms are located in areas with lower levels of social trust. A further analysis reveals that the increasing effect of religious culture on trade credit eases financing constraints. Overall, our findings indicate that religious culture can be a broad indicator of firms’ ethical preferences that influences their access to trade credit by signaling their potential for a high level of trustworthiness.     

Promotional Tactics for Online Viral Marketing Campaigns: How Scarcity and Personalization Affect Seed Stage Referrals

Against the backdrop of consumers being deluged with traditional online advertising, which is increasingly manifesting in inefficient conversion outcomes, viral marketing has become a pivotal component of marketing strategy. However, despite a robust understanding about the impact of viral marketing as well as of factors that drive consumer referral engagement, we know very little about the effect of traditional promotional tactics on consumer referral decisions. Drawing on a randomized field experiment in the context of an online fashion service named StyleCrowd, we investigate the effects of scarcity and personalization, two classical promotional cues that have become ubiquitous on the web and have received only minimal attention hitherto, on actual referral behavior. Our analysis reveals that using these cues in promotional campaigns is a balancing act: While scarcity cues affect referral propensity regardless of whether a campaign is personalized or not, personalization cues are particularly effective when scarcity is absent, yet are cancelled out when scarcity is prevalent. We demonstrate that consumers' perceptions of offer value drive the impact of scarcity on referral likelihood, while consumer gratitude vis-à-vis the marketer is the underlying mechanism for personalization's influence on referral decisions.