Personalization payoff: understanding receptivity to tailored/personalized digital advertising

Abstract
In the digital marketing era, firms frequently deploy personalized digital advertisements (PDA) to engage potential customers. Although consumers often welcome personalized and tailored ads, they may also deem such ads intrusive and may have privacy concerns. To address this paradox, this study examines individuals’ receptivity to personalized digital advertisements (RPDA)—specifically, their propensity to connect with and engage in such ads. We develop and validate the first comprehensive, empirically grounded scale to assess individuals’ RPDA. The scale is developed through six empirical studies involving approximately 1700 respondents. Findings reveal that RPDA comprises two dimensions: connection – consumers’ propensity to like PDA, and intention – consumers’ propensity to respond and act on such PDA. Consumers high in vanity are more receptive to PDA, which positively impacts their advocacy for brands that use PDA. As a result, this research enables practitioners to accurately measure consumer RPDA and identify optimal target segments.

Keywords: Personalization, Receptivity to Personalized Digital Advertisements RPDA, Scale Development, Tailored Digital Advertising