۱- Introduction

۲- Literature review

۳- Hypothesis development

۴- Methodology

۵- Discussion

References

Abstract

Social media has become one of the largest environments of human interaction, with more than 80% of Americans using social media and firm spending on social media marketing more than quadrupling in the past decade. Yet, little is known about the effects of ad personalization in the social media context. This research develops and tests a comprehensive model of personalized advertising in the development of consumer’s brand perceptions using 242 responses collected from Amazon Mechanical Turk. Results suggest perceived personalization positively impacts consumer brand engagement and brand attachment, both enhance perceived quality and brand loyalty of brands advertised on Facebook.

Introduction

Social media has become a nearly-ubiquitous environment for human interaction. In fact, a recent study by the Pew Research Center on social media use in the United States found that over 80% of all Americans use at least one form of social media, and greater than twothirds use Facebook specifically—more than 75% of whom check their Facebook pages at least once a day (Smith and Anderson, 2018). Consequently, as social media use becomes increasingly common, firms seek to reach and interact with current and potential customers through social media platforms. Trends in marketing budget allocations reflect this important shift; data suggests that social media spending has increased by nearly 250% in the past ten years, with analysts expecting even more growth as firms seek to capitalize on the unique opportunities presented by social media (CMO Survey, 2018). One area of particular growing interest for marketers is using personalized advertisements based on customers’ specific personal preferences, prior purchase histories, demographics, and recent searches on the Internet (Li, 2016). Personalized ads allow producers to engage consumers in just such a manner—on a personal level with the aim of developing a more effective relationship and better meeting consumers’ needs. The effectiveness of personalization is well-documented in traditional media such as direct mail (Baek and Morimoto, 2012), telemarketing (Yu and Cude, 2009), mobile messaging (Xu, 2006), and website ad personalization (Awad and Krishnan, 2006; Ho and Bodoff, 2014), but little is known about the effects of personalization in social media given its recent emergence and the disruptiveness of social media as compared to more traditional channels (Baird and Parasnis, 2011). More precisely, while prior work on personalization in traditional marketing channels reveals increases in brand engagement and attachment, and consequently in perceived quality and brand loyalty, scholarship investigating these effects in social media is needed given the different nature of the online environment. For instance, social media is a more intimate setting than traditional channels like direct mail or telemarketing as the customer is able to interact directly with the ad and the company, and because many customers utilize social media frequently throughout the day creating an enhanced opportunity to build a customer relationship (Sashi, 2012). Further, results among emerging scholarship in this area have yet to paint a consistent picture with their findings. For instance, while some work suggests personalizing web browsing experiences increases sales (Oberoi et al., 2017), personalization on Facebook can engender brand avoidance when users become skeptical of the personalization (Tran, 2017). In other words, the intimate nature of social media may make consumers more resistant to personalization when they view it as invasive.