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What's in a “Name”? Impact of Use of Customer Information in E-Mail Advertisements

Author

Listed:
  • Sunil Wattal

    (Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122)

  • Rahul Telang

    (Heinz College, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

  • Tridas Mukhopadhyay

    (Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

  • Peter Boatwright

    (Tepper School of Business, Carnegie Mellon University, Pittsburgh, Pennsylvania 15213)

Abstract

In this study, we examine how consumers respond to firms' use of two types of information for personalization: product preferences and name. We collect a unique data set of over 10 million e-mail advertisements sent by a website to over 600,000 customers who could buy the advertised products from the online merchant. We estimate a two-stage hierarchical model using Bayesian analysis to account for observable and unobservable consumer heterogeneity. Our analysis suggests several interesting results regarding consumers' responses to firms' use of information. When firms use product-based personalization (where the use of information is not explicitly mentioned), consumers respond positively. On the other hand, consumers respond negatively when firms are explicit in their use of personally identifiable information (i.e., a personalized greeting). We also find that negative responses to personalized greetings are moderated by consumers' familiarity with firms. The main contribution of this study is that it not only indicates the economic benefits of personalization in e-mails but also highlights consumers' concerns over the use of information in personalization.

Suggested Citation

  • Sunil Wattal & Rahul Telang & Tridas Mukhopadhyay & Peter Boatwright, 2012. "What's in a “Name”? Impact of Use of Customer Information in E-Mail Advertisements," Information Systems Research, INFORMS, vol. 23(3-part-1), pages 679-697, September.
    • Handle: RePEc:inm:orisre:v:23:y:2012:i:3-part-1:p:679-697
    DOI: 10.1287/isre.1110.0384
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    Cited by:

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    2. Burtch, Gordon & Ghose, Anindya & Wattal, Sunil, 2015. "The hidden cost of accommodating crowdfunder privacy preferences: a randomized field experiment," Journal of Financial Perspectives, EY Global FS Institute, vol. 3(3), pages 138-154.
    3. Paul Belleflamme & Wing Man Wynne Lam & Wouter Vergote, 2019. "Competitive Imperfect Price Discrimination and Market Power," CESifo Working Paper Series 7964, CESifo.
    4. Li, T., 2018. "Digital Traces: Personalization and Privacy," ERIM Inaugural Address Series Research in Management 108848, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam..
    5. Ben C. F. Choi & Zhenhui (Jack) Jiang & Bo Xiao & Sung S. Kim, 2015. "Embarrassing Exposures in Online Social Networks: An Integrated Perspective of Privacy Invasion and Relationship Bonding," Information Systems Research, INFORMS, vol. 26(4), pages 675-694, December.
    6. Nathan M. Fong, 2017. "How Targeting Affects Customer Search: A Field Experiment," Management Science, INFORMS, vol. 63(7), pages 2353-2364, July.

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