IDEAS home Printed from https://ideas.repec.org/p/ecl/stabus/3409.html
   My bibliography  Save this paper

Personalization in Email Marketing: The Role of Non-informative Advertising Content

Author

Listed:
  • Sahni, Navdeep S.

    (Stanford University)

  • Wheeler, S. Christian

    (Stanford University)

  • Chintagunta, Pradeep

    (University of Chicago)

Abstract

In collaboration with three companies selling a diverse set of products, we conduct randomized field experiments in which experimentally tailored email messages are sent to millions of individuals. We find consistently that personalizing the emails, while adding no informative content about the product or the company, benefits the advertisers. In our main experiment, we find that adding the name of the message recipient to the email's subject-line increases the probability of the recipient opening it by 20%, which translates to an increase in sales leads by 31% and a reduction in the number of individuals unsubscribing from the email campaign by 17%. We present similar experiments conducted with other companies, which show that the effects we document extend from objectives ranging from acquiring new customers to retaining customers who have purchased from the company in the past. The effects also extend to other content of similar nature. Our investigation of several possible mechanisms suggests that such content increases the attention consumers pay to the other content in the rest of the advertising message. Our paper quantifies the benefits from personalization, and contributes to understanding the role of advertising content. It contributes to the psychology-based research in marketing by establishing the robustness of lab findings in field settings. It has clear implications for the firms that are designing their advertising campaigns.

Suggested Citation

  • Sahni, Navdeep S. & Wheeler, S. Christian & Chintagunta, Pradeep, 2016. "Personalization in Email Marketing: The Role of Non-informative Advertising Content," Research Papers 3409, Stanford University, Graduate School of Business.
  • Handle: RePEc:ecl:stabus:3409
    as

    Download full text from publisher

    File URL: http://www.gsb.stanford.edu/gsb-cmis/gsb-cmis-download-auth/414906
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Stefano DellaVigna & Matthew Gentzkow, 2010. "Persuasion: Empirical Evidence," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 643-669, September.
    2. Avi Goldfarb & Catherine Tucker, 2012. "Privacy and Innovation," NBER Chapters, in: Innovation Policy and the Economy, Volume 12, pages 65-89, National Bureau of Economic Research, Inc.
    3. Marianne Bertrand & Dean Karlan & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2010. "What's Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 125(1), pages 263-306.
    4. Marianne Bertrand & Dean Karlin & Sendhil Mullainathan & Eldar Shafir & Jonathan Zinman, 2005. "What's Psychology Worth? A Field Experiment in the Consumer Credit Market," NBER Working Papers 11892, National Bureau of Economic Research, Inc.
    5. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1325-1348, December.
    6. Alexander Bleier & Maik Eisenbeiss, 2015. "Personalized Online Advertising Effectiveness: The Interplay of What, When, and Where," Marketing Science, INFORMS, vol. 34(5), pages 669-688, September.
    7. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-754, July/Aug..
    8. K. Sudhir & Subroto Roy & Mathew Cherian, 2016. "Do Sympathy Biases Induce Charitable Giving? The Effects of Advertising Content," Marketing Science, INFORMS, vol. 35(6), pages 849-869, November.
    9. Joseph O. Eastlack, Jr. & Ambar G. Rao, 1989. "Advertising Experiments at the Campbell Soup Company," Marketing Science, INFORMS, vol. 8(1), pages 57-71.
    10. S. Christian Wheeler & Richard E. Petty & George Y. Bizer, 2005. "Self-Schema Matching and Attitude Change: Situational and Dispositional Determinants of Message Elaboration," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 31(4), pages 787-797, March.
    11. Tiffany White & Debra Zahay & Helge Thorbjørnsen & Sharon Shavitt, 2008. "Getting too personal: Reactance to highly personalized email solicitations," Marketing Letters, Springer, vol. 19(1), pages 39-50, March.
    12. K. Sudhir & Subroto Roy & Mathew Cherian, 2014. "Do Sympathy Biases Induce Charitable Giving" The Effects of Advertising Content," Cowles Foundation Discussion Papers 1940, Cowles Foundation for Research in Economics, Yale University, revised Jan 2016.
    13. Petty, Richard E & Cacioppo, John T & Schumann, David, 1983. "Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 10(2), pages 135-146, September.
    14. Bagwell, Kyle, 2007. "The Economic Analysis of Advertising," Handbook of Industrial Organization, in: Mark Armstrong & Robert Porter (ed.), Handbook of Industrial Organization, edition 1, volume 3, chapter 28, pages 1701-1844, Elsevier.
    15. Randall A. Lewis & Justin M. Rao, 2015. "The Unfavorable Economics of Measuring the Returns to Advertising," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(4), pages 1941-1973.
    16. Tucker, Catherine E., 2012. "The economics of advertising and privacy," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 326-329.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kurt P. Munz & Minah H. Jung & Adam L. Alter, 2020. "Name Similarity Encourages Generosity: A Field Experiment in Email Personalization," Marketing Science, INFORMS, vol. 39(6), pages 1071-1091, November.
    2. Ilya Morozov & Anna Tuchman, 2024. "Where Does Advertising Content Lead You? We Created a Bookstore to Find Out," Marketing Science, INFORMS, vol. 43(5), pages 986-1001, September.
    3. Wesley R. Hartmann & Daniel Klapper, 2018. "Super Bowl Ads," Marketing Science, INFORMS, vol. 37(1), pages 78-96, January.
    4. Yi-Lin Tsai & Elisabeth Honka, 2021. "Informational and Noninformational Advertising Content," Marketing Science, INFORMS, vol. 40(6), pages 1030-1058, November.
    5. Andre Veiga & Tommaso Valletti, 2020. "Attention, recall and purchase: Experimental evidence on online news and advertising," Working Papers 20-15, NET Institute.
    6. Brett R Gordon & Kinshuk Jerath & Zsolt Katona & Sridhar Narayanan & Jiwoong Shin & Kenneth C Wilbur, 2019. "Inefficiencies in Digital Advertising Markets," Papers 1912.09012, arXiv.org, revised Feb 2020.
    7. Sumit Agarwal & Brent W. Ambrose, 2008. "Does it pay to read your junk mail? evidence of the effect of advertising on home equity credit choices," Working Paper Series WP-08-09, Federal Reserve Bank of Chicago.
    8. Lauren H. Cohen & Umit G. Gurun, 2018. "Buying the Verdict," NBER Working Papers 24542, National Bureau of Economic Research, Inc.
    9. Lynne Pepall & Joseph Reiff, 2017. "Targeted Advertising and Cumulative Exposure Effects: The Impact of Banning Advertising to Children in Quebec," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 51(3), pages 235-256, November.
    10. K. Sudhir & Hortense Fong & Subroto Roy, 2014. "Greedy or Grateful" Asking for More when Thanking Donors," Cowles Foundation Discussion Papers 2183, Cowles Foundation for Research in Economics, Yale University.
    11. Papi, Mauro, 2018. "Price competition with satisficing consumers," International Journal of Industrial Organization, Elsevier, vol. 58(C), pages 252-272.
    12. Dokyun Lee & Kartik Hosanagar & Harikesh S. Nair, 2018. "Advertising Content and Consumer Engagement on Social Media: Evidence from Facebook," Management Science, INFORMS, vol. 64(11), pages 5105-5131, November.
    13. Stefano DellaVigna, 2009. "Psychology and Economics: Evidence from the Field," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 315-372, June.
    14. George Z. Gui, 2024. "Combining Observational and Experimental Data to Improve Efficiency Using Imperfect Instruments," Marketing Science, INFORMS, vol. 43(2), pages 378-391, March.
    15. Sendhil Mullainathan & Joshua Schwartzstein & Andrei Shleifer, 2008. "Coarse Thinking and Persuasion," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 577-619.
    16. Samuel Nocito & Marcello Sartarelli & Francesco Sobbrio, 2021. "A Beam of Light: Media, Tourism & Economic Development," CESifo Working Paper Series 9055, CESifo.
    17. Chen He & Tobias J. Klein, 2023. "Advertising as a Reminder: Evidence from the Dutch State Lottery," Marketing Science, INFORMS, vol. 42(5), pages 892-909, September.
    18. Nocito, Samuel & Sartarelli, Marcello & Sobbrio, Francesco, 2023. "A beam of light: Media, tourism and economic development," Journal of Urban Economics, Elsevier, vol. 137(C).
    19. Adena, Maja & Hager, Anselm, 2020. "Does online fundraising increase charitable giving? A nation-wide field experiment on Facebook," Discussion Papers, Research Unit: Economics of Change SP II 2020-302, WZB Berlin Social Science Center.
    20. Hong Luo & Julie Holland Mortimer, 2017. "Copyright Enforcement: Evidence from Two Field Experiments," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(2), pages 499-528, June.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecl:stabus:3409. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/gsstaus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.