Personalized ad Content and Individual User Preference: A boost for Conversion Rates in the UK E-commerce Business

John Ologunebi and Ebenezer Taiwo

MPRA Paper from University Library of Munich, Germany

Abstract: E-commerce personalization has emerged as a critical capability for online retailers to drive engagement and conversions by delivering relevant content and experiences tailored to each customer's preferences. This study presents a comprehensive analysis of how a leading UK e-commerce platform implemented advanced personalization tactics across its digital channels and quantifies the resulting business impact. Through in-depth examination of a multi-year personalization initiative, the research evaluates the real-world performance of various machine learning powered techniques including collaborative filtering, predictive segmentation, dynamic ad optimization, and multichannel targeting strategies. A mixed methodology combines analyzing performance data from A/B tests and control groups with insights from user surveys and qualitative feedback. Key findings reveal significant uplifts from personalization across metrics like click-through rates, conversion rates, revenue per visitor and customer lifetime value compared to pre-personalization benchmarks. Automated recommendation engines and targeted ad content resonated strongly with UK consumer preferences. However, the study also highlights nuances like mitigating choice overload, maintaining transparency, and avoiding excessive personalization that could negatively impact outcomes. The "personalization paradox" emerged as a recurring challenge in needing to balance relevance with privacy and diversity of content discovery. Overall insights synthesize drivers of personalization success, quantify substantial ROI, and outline best practices tailored to UK audience contexts. The research provides a comprehensive playbook for how e-commerce brands can leverage first-party data, predictive analytics, and multi-pronged personalization tactics to create more engaging, profitable customer experiences.

Keywords: E-commerce platform; Personalized advertising; Ad content; User preferences; Conversion rates; User engagement; User behavior; User satisfaction; Privacy considerations; Data security; Ethical implications; GDPR compliance; User perceptions; Customer loyalty; Product recommendations; Decision-making; Marketing strategies (search for similar items in EconPapers)
JEL-codes: M21 M30 M31 M37 M38 (search for similar items in EconPapers)
Date: 2024-04-01
New Economics Papers: this item is included in nep-dcm, nep-mkt and nep-pay
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