Consumer’s reactions towards (personalised) advertisements
Business-to-consumer online retailing forms the basis for the re-emergence of personalized marketing, which, through websites, has several key features both for the consumer and seller. It balances the discrepancy between conglomerates and small businesses, greatly increasing competition and consumer shopping choices. It reduces overhead and the number of middlemen, thereby lowering costs. It allows shopping 24-hour-per-day, seven-days-per-week from the privacy of your home. It greatly increases the amount of information available to the consumer about products, including cost comparisons that previously would have taken much more effort to obtain. And, it permits huge numbers of customers to shop at particular Web stores or otherwise have business-to-consumer relationships (Gillenson, 2000). However, that also means that people are constantly bombarded with information, an infinite number of options and advertisement. Therefore, it can be a struggle to find what they are actually looking for. In the study of Leppaniemi & Karjaluoto, one of the main findings was that personalization was one of the factors to increase the willingness to accept the ads. It assumed that it would be the best solution to create personal user profiles for individuals based on their characteristics, behaviour and location (2005).
It is necessary for every business to understand if their consumers are able to distinguish the different techniques marketers are using in online targeting and how this knowledge influences their perceptions of the product or service, view of the brands which is using them and consequently, how it affects their buying behaviour. To online service firms embracing personalization as part of their core competitive strategy, (dis)satisfaction with agent recommendations is not without consequences. First, customer (dis)satisfaction may have an immediate impact on sales transactions. While satisfied customers are more likely to be engaged and to proceed to placing orders, dissatisfied customers may simply leave from the current episode, or even to a competitor’s Web site, which is just a click away. Second, customer (dis)satisfaction may also affect their overall experiences with the service firm, which may in turn exhibit its impact on customer retention and long-term profitability(Gillenson”,2000).
Customers are looking for relevant suggestions. Kim and Huh (2016) have determined that consumers who have high levels of perceived ad relevance, evaluate ads more positively. Shoppers just don’t want to be constantly reminded of products they’ve already bought or searched for, especially if the ads appear either too soon, too frequently, or too late in the process.To provide something that gains attenttion from a customer, companies need to use more sophisticated recommendation algorithms to offer complementary products or services instead of just the things the shopper has already browsed or bought (McKinsey, 2017). sing a common digital-marketing feature called retargeting, these reminders appear as ads on other websites the shopper visits or are delivered via email.Research by Infosys states that there is a desire for better personalisation, revealing that 31% of surveyed consumers say they wish their shopping experience was far more personalised than it currently is. “(Nikki Gilliland, 2018). For example, popular digital-marketing feature is retargeting, when reminders appear as ads on other websites the shopper visits or are delivered via email. However, the issue for marketers is that consumers oftentimes feel manipulated, or deprived of their freedom of choice when perceiving a personalized advertisement inappropriately close to their preferences(King and Jessen 2010; Tucker 2012b; White et al. 2008).
Ad blockers and cookies
The increased awareness of privacy risks of data collection and usage has led to people blocking cookies on websites and using various ad blocking tools, which can be a struggle for marketers. Since may 2011, all EU countries have adopted legislation, known as ‘the cookie law’, that requires any website targeted to EU citizens to retrieve informed consent in order to store or access any information on the user’s hardware, essentially requiring them to provide opt-in for online behavioural advertising (Solon, 2012). In 2017, there was a 30% annual increase in a number of ad blocker users, which corresponds with approximately 600 active users. All of that blocking had a clear monetary impact, and it’s anticipated that by 2020, $35 billion a year will be lost. (Lauren Nettles, 2018). Paul Verna, an analyst from eMarketer says that”Ad blocking is a detriment to the entire advertising ecosystem“ (Mark Scott, 2017). Therefore, some companies are forcing consumers to turn off their ad blocker to surf on their website (O’Reilley, 2017). Facebook, one of the world’s largest purveyors of online ads, when trying to block people from using such software, got only into a race with tech start-ups offering new ad-blocking tools (Mark Scott, 2017). Netflix has tried a creative approach to this. For promoting the drama Black Mirror, when customers used an ad blocker, the ad saying “You cannot see the ad. But the ad can see you”,” popped out (Jon Fingas, 2016). This can have a dual effect on the consumer. Either he/she will be completely discouraged or amused.