New Research: Targeted Ads Can Improve Click-through Rates by 670%, Change Consumer Behavior

Hal Conick
Marketing News
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Key Takeaways
​What? Behavioral targeting in advertisements could see an improvement in click-through rates of up to 670%, according to a recent study.

So What? “Given its effectiveness and the growing frequency with which it is used, it is important to understand how consumers’ psychological responses to behaviorally targeted ads may differ from responses to non-behaviorally targeted ads," researchers of the report wrote. 

Now What? Moving forward, marketers must ensure targeted marketing is transparent and always done accurately to see the best results. 

​April 11, 2016


Behavioral targeting may be even more effective than marketers thought, as a study from professors at The Ohio State University found it could change customers’ self-perception​.

 

You are what you click, so long as the ads are properly targeted.

Evidence from a recent study, published by the Journal of Consumer Research, found that behaviorally targeted ads have the potential to change how consumers feel about themselves. 

Researchers from The Ohio State University found behaviorally targeted ads can improve click-through rates by as much as 670%, when compared with ads that are not behaviorally targeted.

“Given its effectiveness and the growing frequency with which it is used, it is important to understand how consumers’ psychological responses to behaviorally targeted ads may differ from responses to non-behaviorally targeted ads and to ads that use more traditional forms of targeting (e.g., demographics) and whether measures like click-through rates adequately capture the consequences of this growing form of advertising,” the study’s researchers, Rebecca Walker Reczek, Christopher Summers and Robert Smith, wrote in the journal.

Researchers undertook four studies of students to measure what effect behavioral targeted marketing had on consumers:

  • In the first study, researchers found that participants were more inclined to buy a Groupon from a “sophisticated” restaurant when they thought the ad was targeted for them based on browser history.
  • The second study showed participants ads from a high-end watch brand that was believed to be targeted or non-targeted, then asking subjects how sophisticated they believed themselves to be. “Participants saw the targeted ad as reflective of their own characteristics,” researchers wrote in The Harvard Business Review.
  • In the third study, study participants saw themselves as greener and more willing to buy products advertised as such and donate to pro-environmental charities after seeing the targeted ad.
  • ​Limits to behavioral targeted marketing were found in the fourth study, as researchers found that there needs to be some modicum of interest in the subject being targeted in order for the best success. Past behavior must be indicative of the label, researchers wrote in the study.

“Importantly, however, we find that adjustments in consumer self-perceptions in response to behaviorally targeted advertisements depend on the plausibility of the connection between the label and past behavior,” they wrote in the study.

There are many upsides to behavioral targeted marketing, Reczek, Summers and Smith wrote for HBR, but targeting must always be accurate, managers must consider the impact of the campaign beyond click-through, and organizations should realize that transparency can be a benefit to themselves and the consumer.


Author Bio:

 
Hal Conick
Hal Conick is a staff writer for the AMA’s magazines and e-newsletters. He can be reached at hconick@ama.org or on Twitter at @HalConick.
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