Abstract
Personalization is frequently used in advertising practices and it is believed to be an effective communication strategy. A typical personalized advertising process consists of two phases: the advertiser first "learns" consumers' preferences, and then "matches" an advertising message to each consumer according to his or her preferences. The current study argues that this process is conceptually flawed because it assumes that consumers' preferences are always stable and extreme. Through a 2 (ad type: personalized vs. non-personalized) x 2 (preference stability: stable vs. unstable) x 2 (preference extremity: high vs. low) between-subjects experiment (N = 227), it is shown that effectiveness of personalized advertising is moderated by consumers' preference stability and extremity. A new conceptualization of personalization is proposed based on the study results and how the two phases of personalized advertising need to be refined are highlighted.