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9.2 Personalization and Behavioral Marketing 265

SECTION 9.1 REVIEW QUESTIONS a popular method that allows computers to look smarter and
simplifies Internet access. According to Webopedia, “the
1. Describe the major components of the model of online main purpose of cookies is to identify users and possibly pre-
consumer behavior. pare customized Web pages for them” (per webopedia.com/
2. List some major personal characteristics that influence TERM/C/cookie.html).
consumer behavior. Are cookies bad or good? The answer is “both.” When
3. List the major environmental variables of the purchasing users revisit Amazon.com or other sites, they are greeted by
environment. their first name. Amazon.com knows the users’ identity by
4. List and describe five major merchant-related variables. using cookies. Vendors can provide consumers with consid-
5. Describe the relationships among attitude, intention, and erable personalized information if they use cookies that sig-
actual behavior in the behavior process model. nal a consumer’s return to a site. Cookies can provide
marketers with a wealth of information, which then can be
used to target specific ads to them. Thus, marketers get
9.2 PERSONALIZATION higher rates of “click-throughs,” and customers can view
AND BEHAVIORAL MARKETING information that is relevant to them. Cookies can also pre-
vent repetitive ads because vendors can arrange for a con-
As the Internet provides a huge amount of data for customer sumer not to see the same ad twice. Finally, advanced data
profiling, one-to-one marketing becomes effective. There are mining companies (e.g., provided by SPSS and Sift) can ana-
three generic strategies for one-to-one marketing: personal- lyze information in cookie files so companies can better meet
ization, behavioral targeting, and collaborative filtering. their customers’ needs.
However, some people object to cookies because they do
not like the idea that “someone” is watching their activity
Personalization in E-Commerce on the Internet. Users who do not like cookies can disable
them. On the other hand, some consumers may want to
Personalization refers to the matching of advertising con- keep the “friendly” cookies. For example, many sites rec-
tent and vendors’ services with customers based on their ognize a person as a subscriber by accessing their cookies
preferences and individual needs. Personalized content on a so that they do not need to re-register every time they visit
website has been found to increase conversion rates (see the site.
searchenginewatch.com/article/2334157/How- Personalizing- Cookies can be removed if the user does not like them.
Websites-With-Dynamic-Content-Increases-Engagement). For instructions on deleting cookie files from your Internet
The matching process is based on the user profile. The user browser (e.g., Internet Explorer, Google Chrome, Firefox),
profile describes customer preferences, behaviors, and see whitecanyon.com/delete-cookie.
demographics. It can be generated by getting information
directly from the users; for example, observing what people Using Personalized Techniques to Increase Sales
are doing online through the use of tools such as a cookie—a
data file that, frequently without the knowledge of users, is It has become a common practice for vendors to provide per-
placed on their computers’ hard drives. Alternatively, profiles sonalized services to customers in order to increase customer
can be built from previous purchase patterns. Profiles can be satisfaction and loyalty. A prime example is Amazon.com,
structured from market research or by making inferences which provides many personalized services where the most
from information known about similar consumers. common activity is product recommendations. Amazon.com
One-to-one matching can be done by methods such as automatically generates such recommendations based on the
collaborative filtering (discussed later in this section). Many buyers’ purchasing and browsing histories, and upon the pur-
vendors provide personalization tools that help with cus- chasing history of other customers with similar purchasing
tomer acquisition and retention. An example of these ven- histories.
dors is Magnify360 (magnify360.com). Personalized services can be facilitated when the compa-
nies know more about their customers. TowerData (tower-
Web Cookies for Data Collection data.com) offers a service that helps businesses learn more
about their customers, so they can personalize content (go to
Cookies are small files sent from a website and stored in a intelligence.towerdata.com). For a free e-book about the 40
designated area in your computer. They allow companies to best ways to personalize website, see qubitproducts.com/
save certain information for future use. The use of cookies is content/40-best-ways-to-personalize.