Effectiveness of Personalized Advertising in E-commerce Platforms

Abstract

This research aims to understand when personalized advertising is most helpful in e-commerce sites from the perspective of customer engagement rate and conversion rate. Given the growing popularity of customized advertising in the context of digital marketing, the efficiency of such an approach is of great interest to companies. The study acquires rich data by combining an online questionnaire, interviews with marketers, and data from e-commerce promotional campaigns. Targeted advertisements greatly influence customer attention and are supported by higher CTR alongside extended web presence times on observed websites. Also, there were increased conversion rates, especially where the ad was produced based on preferences, hence enhancing the purchase theory of personalisation. In that case, most marketing professionals recognize the efficiency of personalized adverts, but they state the enhancement of the difficulties, for example, privacy issues and advert exhaustion. The two significant practical implications of the study for businesses are that both engagement and conversion benefit from personalized ads. However, businesses must be careful not to oversteer with personalisation beyond the user’s best interest, as it will erode customer trust in the long run. Nevertheless, timing also has the effect of reducing other problems like ad fatigue when ads are placed at the most appropriate time and are more related to the content of the website.