ArticlePDF Available

Is Combining Contextual and Behavioral Targeting Strategies Effective in Online Advertising?

Authors:

Abstract and Figures

Online targeting has been increasingly used to deliver ads to consumers. But discovering how to target the most valuable web visitors and generate a high response rate is still a challenge for advertising intermediaries and advertisers. The purpose of this study is to examine how behavioral targeting (BT) impacts users' responses to online ads and particularly whether BT works better in combination with contextual targeting (CT). Using a large, individual-level clickstream data set of an automobile advertising campaign from an Internet advertising intermediary, this study examines the impact of BT and CT strategies on users' click behavior. The results show that (1) targeting a user with behavioral characteristics that are closely related to ads does not necessarily increase the click through rates (CTRs); whereas, targeting a user with behavioral characteristics that are loosely related to ads leads to a higher CTR, and (2) BT and CT work better in combination. Our study contributes to online advertising design literature and provides important managerial implications for advertising intermediaries and advertisers on targeting individual users.
Content may be subject to copyright.
A preview of the PDF is not available
... Hence, competitive peer influence could also exist in online knowledge contribution behaviors. Prior social comparison research has shown that the magnitude of social comparison concerns could be individual and situational specific (Garcia et al., 2013;Li et al., 2021;Lu et al., 2016). These factors are related to the individual's perception of the environment's competitiveness and lead to a higher or lower degree of competitive behavior. ...
... According to the social comparison literature, the strength of peer influence depends on situational features (Garcia et al., 2013;Li et al., 2021;Lu et al., 2016). The question type is a crucial situational factor that can affect the competitiveness of online knowledge contributions. ...
... Individual factors also influence the personal perspective of competitiveness (Garcia et al., 2013;Li et al., 2021;Lu et al., 2016). Regarding the moderating factor of contributors, we studied the social status of subsequent contributors. ...
Article
Full-text available
Purpose Users' knowledge contribution behaviors are critical for online Q&A communities to thrive. Well-organized question threads in online Q&A communities enable users to clearly read existing answers and their evaluations before contributing. Based on the social comparison and peer influence literature, the authors examine peer influence on the informativeness of knowledge contributions in competitive settings. The authors also consider three levels of moderating factors concerning individuals' perception of competitiveness: question level, thread level and contributor level. Design/methodology/approach The authors collected data from one of the largest online Q&A communities in China. The hypotheses were validated using hierarchical linear models with cross-classified random effects. The generalized propensity score weighting method was employed for the robustness check. Findings The authors demonstrate the peer influence due to social comparison concerns among knowledge contribution behaviors in the same question thread. If more prior knowledge contributors choose to contribute long answers in the question thread, the subsequent contributions are more informative. This peer influence is stronger for factual questions and questions with higher popularity of answering but weaker in recommendation-type and well-answered questions and for contributors with higher social status. Originality/value This research provides a new cue of peer influence on online UGC contributions in competitive settings initiated by social comparison concerns. Additionally, the authors identify three levels of moderating factors (question level, thread level and contributor level) that are specific to online Q&A settings and are related to a contributor's perception of competitiveness, which affect the direct effect of peer influence on knowledge contributions. Rather than focus on motivation and quality evaluation, the authors concentrate on the specific content of online knowledge contributions. Peer influence here is not based on an actual acquaintance or a following relationship but on answering the same question. The authors also illustrate the competitive peer influence in subjective and personalized behaviors in online UGC communities.
... However, in studies relating to consumer buying patterns, it is found to have a massive impact on buying proclivity, resulting from the emergence of technology and the rising level of personalization in marketing. The impact of CTA has been mentioned in consumer buying patterns studies of Meuter et al. (2000), Lou et al. (2003), and Lu et al. (2016). Since people are self-oriented, anything personalized will attract their attention. ...
Article
Full-text available
The fourth industrial revolution (the 4.0 era) has provided companies with more opportunities to attract potential clients across technology-based platforms, thus, bringing new factors that offer a tremendous incentive to buy impulsively, namely Contextual Targeting. Nevertheless, far too little attention has lately been paid to impulse buying behavior in Vietnam. This study offers a comprehensive view on how impulsive behavior is produced, analyzes factors having considerable significance to the impulsiveness, and proposes tactics businesses may use to maximize their sales. The data for this study were selected randomly from the population of Ho Chi Minh city via a survey in the second half of February 2020. From Exploratory Factors Analysis and Multiple Regression Analysis, results reveal that contextual targeting of advertising, packaging, and moods are strongly linked to impulse buying behaviors of Vietnamese consumers, especially in Ho Chi Minh city in the 4.0 era. The study proposes appropriate tactics for businesses to employ as a cheat-sheet, which helps manipulate customer mannerism to maximize profits.
Article
The European Union (EU)’s General Data Protection Regulation (GDPR), with its explicit consent requirement, may restrict the use of personal data and shake the foundations of online advertising. The ad industry predicted drastic loss of revenue from GDPR compliance and has been seeking alternative ways of targeting. Taking advantage of an event created by an ad publisher’s request for explicit consent from users with EU IP addresses, the authors find that for a publisher that uses a pay-per-click model, has the capacity to leverage both user behavior and webpage content information for advertising, and observes high consent rates, GDPR compliance leads to modest negative effects on ad performance, bid prices, and ad revenue. The changes in ad metrics can be explained by temporal variations in consent rates. The impact is most pronounced for travel and financial services advertisers and least pronounced for retail and consumer packaged goods advertisers. The authors further find that webpage context can compensate for the loss of access to users’ personal data, as the GDPR’s negative impact is less pronounced when ads are posted on webpages presenting relevant content. The results suggest that publishers and advertisers should leverage webpage-content-based targeting in a post-GDPR world.
Article
The study investigates the antecedents that affect consumers’ acceptance of behavioral targeting advertising (BTA) services by extending technology acceptance Model 2 (TAM2) with perceived risk. A two-stage PLS-SEM-artificial-neural-network (ANN) predictive analytic approach was adopted to analyze the collected data, of which PLS-SEM was first applied to test the hypotheses, followed by the ANN technique to detect the nonlinear effect on the model. A total of 475 usable self-administered questionnaires were collected, and the results showed that only the relationship between the image and perceived usefulness (PU) was not supported. As per Model B, the ranking of subjective norms (SN) and PU between the PLS-SEM and ANN model does not match each other, implying that hidden attributes may exist in affecting the role of SN and PU under the practical context of which the relationship between variables may not fully be explained by a linear perspective. The finding is beneficial for advertising practitioners and software developers who wish to optimize BTA results. Theoretically, the study extends TAM2 in the context of advertising, which is a neglected research area. Methodologically, the study is the first to apply TAM2 using the hybrid PLS-SEM-ANN in the context of advertising.
Chapter
Full-text available
Ergonomics is one of the emerging fields of interest for the researchers of the twenty-first century but is being incorporated into unusual traits of human life from the period of prehistoric Greek civilization. On the former, it has been tried to present how Greeks have used ergonomics in the manufacture of various products. Later on, during the twentieth century, there have been many changes in the application of ergonomics in different aspects of the product design. In this paper, an attempt has been made to represent how ergonomics in product design has changed its face from the prehistoric Greek civilization to the present age and what are the future trends of ergonomic developments in product design.
Chapter
Full-text available
Text and display ads are very common formats of online advertisement. Application of advergames is a comparatively new strategy to create online ads to grab attention of online consumers. Advergames are computer games explicitly created to function as advertisements to promote various brands, where the content is integrated into the advertisement like traditional games. Published literature states that positive attitude of users toward online games is influenced by enjoyment and engagement levels of the game. In addition, many studies indicate that persuasion is influenced by engagement and enjoyment. As advergames are applying the strategies of gamification, considerations of enjoyment, engagement and persuasion are also important for designing advergames. Therefore, the current study examines the effect of types of advertisement (text vs. display vs. advergames) on the persuasive response toward online advertisement considering enjoyment and engagement of the advertisement as causative factors. In this study, three stimuli of online advertisements (text, display and advergames) were made. Enjoyment, engagement and persuasion were measured using questionnaire. This study was conducted on randomly assigned design students (Mean age = 23.65; SD age = 2.26; Male/Female = 2.4; age range = 18–26 years) who are looking for internship opportunities on online platforms. Results of this study showed that there is significant difference in persuasive response toward online advertisement due to advergames. Similar changes were also observed in case of enjoyment and engagement. Therefore, it can be concluded that advergames are beneficial for online advertising as compared to text and display advertisements. Thus, consumers would like to go for advergames due to its engaging and enjoyable nature.
Preprint
Full-text available
Platform advertising has been valued by e-commerce platforms because of its role in demand creation and market expansion. Moreover, in order to improve advertising efficiency, e-commerce platforms make targeted promotion efforts. This paper studies a supply chain consisting of a seller and an agent sales platform, where the product is sold by the seller's offline channel or the platform. The platform provides two advertising modes (free and paid advertising) and decides whether to conduct targeted promotion. Firstly, the findings show that implementing targeted promotion can benefit the seller and the platform but affect selection of advertising modes. Paid advertising mode can always bring more profits for the platform but might also benefit the seller simultaneously compared to free advertising mode when the commission rate or cost coefficient of targeted promotion is low. Secondly, we find that the efficiency of targeted promotion on seller's profit improvement not necessarily increases with the commission rate. With targeted promotion, the seller's profit difference between paid and free advertising increases with the commission rate when platform advertising promotes offline sales. Finally, we derive that, when sharing the cost of target of targeted promotion, the endogenous sharing proportion will hurt the seller, while the exogenous sharing proportion may benefit the seller.
Article
Full-text available
The objective of this work is to examine various psychological forces underlying the behavior of people's online gambling, an increasingly popular form of entertainment in the gaming industry. Drawing on extant theories, we first developed a model of how cumulative outcomes, recent outcomes, and prior use affect online gambling behavior differently. We empirically tested the model using longitudinal panel data collected over eight months from 22,304 actual users of a gambling website. The results of a multilevel panel data analysis strongly supported our hypotheses. First, consistent with gambling theory, individuals' online gambling was found to increase with any increase in a cumulative net gain or cumulative net loss. Second, as the availability heuristic prescribes, a recent loss reduced online gambling, whereas a recent gain increased it. Third, consistent with the literature on repeated behavior, regular use and extended use moderated the relationship between current and subsequent gambling. Taken together, the present study clarifies how people react differently to immediate and cumulative outcomes and also how regular use and extended use facilitate routine behavior in the context of online gambling. In general, our findings suggest that the three perspectives, i.e., gambling theory, the availability heuristic, and repeated behavior, should be taken into account to understand online gambling, which is in essence a series of risk-taking attempts with the potential of eventually becoming routine behavior. This study is expected to offer valuable insights into other types of online games that could engage people in risking real or cyber money and, at the same time, could be easily enmeshed with everyday life (e.g., fantasy sports, online virtual worlds).
Article
Full-text available
This study seeks to provide an initial understanding of the effect of behaviorally targeted advertising on advertising rates and revenues. A survey of twelve ad networks was conducted to obtain quarterly data on pricing (CPM data), conversion rates, and revenues across various types of ad segments (run of network advertising and behavioral advertising). The survey results reveal three key findings: (1) Advertising rates are significantly higher for behaviorally targeted ads. The average CPM for behaviorally targeted advertising is just over twice the average CPM for run-of-network advertising. On average across participating networks, the price of behaviorally targeted advertising in 2009 was 2.68 times the price of run of network advertising. (2) Advertising using behavioral targeting is more successful than standard run of network advertising, creating greater utility for consumers from more relevant advertisements and clear appeal for advertisers from increased ad conversion. (3) Finally, a majority of network advertising revenue is spent acquiring inventory from publishers, making behavioral targeting an important source of revenue for online content and services providers as well as third party ad networks. This study was sponsored by the Network Advertising Initiative (NAI). The NAI is a coalition of more than 40 leading online marketing companies committed to building consumer awareness and reinforcing responsible business and data management practices and standards. For a description of the NAI and a list of its members, see http://www.networkadvertising.org/index.asp (last visited Mar. 3, 2010).
Article
Full-text available
Online advertising campaigns often consist of multiple ads, each with different creative content. We consider how various creatives in a campaign differentially affect behavior given the targeted individual's ad impression history, as characterized by the timing and mix of previously seen ad creatives. Specifically, we examine the impact that each ad impression has on visiting and conversion behavior at the advertised brand's website. We accommodate both observed and unobserved individual heterogeneity and take into account correlations among the rates of ad impressions, website visits, and conversions. We also allow for the accumulation and decay of advertising effects, as well as ad wearout and restoration effects. Our results highlight the importance of accommodating both the existence of multiple ad creatives in an ad campaign and the impact of an individual's ad impression history. Simulation results suggest that online advertisers can increase the number of website visits and conversions by varying the creative content shown to an individual according to that person's history of previous ad impressions. For our data, we show a 12.7% increase in the expected number of visits and a 13.8% increase in the expected number of conversions.
Article
When a medical practitioner encounters a patient with rare symptoms that translates to rare occurrences in the local database, it is quite valuable to draw conclusions collectively from such occurrences in other hospitals. However, for such rare conditions, there will be a huge imbalance in classes among the relevant base population. Due to regulations and privacy concerns, collecting data from other hospitals will be problematic. Consequently, distributed decision support systems that can use just the statistics of data from multiple hospitals are valuable. We present a system that can collectively build a distributed classification model dynamically without the need of patient data from each site in the case of imbalanced data. The system uses a voting ensemble of experts for the decision model. The imbalance condition and number of experts can be determined by the system. Since only statistics of the data and no raw data are required by the system, patient privacy issues are addressed. We demonstrate the outlined principles using the Nationwide Inpatient Sample (NIS) database. Results of experiments conducted on 7,810,762 patients from 1050 hospitals show improvement of 13.68% to 24.46% in balanced prediction accuracy using our model over the baseline model, illustrating the effectiveness of the proposed methodology.
Article
Automated monitoring algorithms operating on live video streamed from a home can effectively aid in several assistive monitoring goals, such as detecting falls or estimating daily energy expenditure. Use of video raises obvious privacy concerns. Several privacy enhancements have been proposed such as modifying a person in video by introducing blur, silhouette, or bounding-box. Person extraction is fundamental in video-based assistive monitoring and degraded in the presence of privacy enhancements; however, privacy enhancements have characteristics that can opportunistically be adapted to. We propose two adaptive algorithms for improving assistive monitoring goal performance with privacy-enhanced video: specific-color hunter and edge-void filler. A nonadaptive algorithm, foregrounding, is used as the default algorithm for the adaptive algorithms. We compare nonadaptive and adaptive algorithms with 5 common privacy enhancements on the effectiveness of 8 automated monitoring goals. The nonadaptive algorithm performance on privacy-enhanced video is degraded from raw video. However, adaptive algorithms can compensate for the degradation. Energy estimation accuracy in our tests degraded from 90.9% to 83.9%, but the adaptive algorithms significantly compensated by bringing the accuracy up to 87.1%. Similarly, fall detection accuracy degraded from 1.0 sensitivity to 0.86 and from 1.0 specificity to 0.79, but the adaptive algorithms compensated accuracy back to 0.92 sensitivity and 0.90 specificity. Additionally, the adaptive algorithms were computationally more efficient than the nonadaptive algorithm, averaging 1.7% more frames processed per second.
Article
Gaining consumers' attention and generating favorable attitudes are two key advertising objectives. Using two experiments in an on-line environment, we consider the effects of the congruity between the product foci of the advertiser and the Web site, as well as banner color and banner color-text color contrast on measures of attention (i.e., recall and recognition) and attitudes toward the ad and the Web site. Experiment 1 results indicate that incongruity has a more favorable effect on recall and recognition, whereas congruity has more favorable effects on attitudes. Experiment 2 results suggest that when ads generate sufficient attention to gain recall or recognition, moderate congruity offers the most favorable attitudes toward the ad. Managerial implications for the use of these ad execution cues are discussed and future research avenues are proposed.
Article
Individual targeting, a marketing strategy that firms target individual consumers with tailored offers, is currently a widespread practice. Customer data intermediaries (CDIs) have emerged recently to help firms learn their prospective customers and launch their target marketing campaigns. This paper uses a common-value auction framework to study how a CDI designs and differentiates its information services to help two competing firms identify and target valuable customers. We characterize the firms' equilibrium target marketing strategies. The results show that the CDI serves one firm exclusively in unpromising markets where the proportion of valuable customers is relatively low, and provides both firms with differentiated services in promising markets where the proportion of valuable customers is relatively high. In addition, the CDI differentiates its services less when the proportion of valuable customers is higher.