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

57 Pages Posted: 1 Feb 2016 Last revised: 26 Jan 2017

Navdeep S. Sahni

Stanford Graduate School of Business

S. Christian Wheeler

Stanford Graduate School of Business

Pradeep K. Chintagunta

University of Chicago

Date Written: October 23, 2016

Abstract

In collaboration with three companies selling a diverse set of products, we conducted randomized field experiments in which experimentally tailored email ads were sent to millions of individuals. We found consistently that personalizing the emails by adding consumer-specific information (e.g., name, employer name) benefited the advertisers. Importantly, such content is not likely to be informative about the advertised product or the company. In our main experiment, we found that adding the name of the message recipient to the email's subject-line increased the probability of the recipient opening it by 20% (from 9.05% to 10.80%), which translated to an increase in sales leads by 31% (from 0.39% to 0.51%) and a reduction in the number of individuals unsubscribing from the email campaign by 17% (from 1.2% to 1.0%). 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 non-informative 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. and Wheeler, S. Christian and Chintagunta, Pradeep K., Personalization in Email Marketing: The Role of Non-Informative Advertising Content (October 23, 2016). Stanford University Graduate School of Business Research Paper No. 16-14. Available at SSRN: https://ssrn.com/abstract=2725251 or http://dx.doi.org/10.2139/ssrn.2725251

Navdeep Sahni (Contact Author)

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

S. Christian Wheeler

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Pradeep Chintagunta

University of Chicago ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States
773-702-8015 (Phone)
773-702-0458 (Fax)

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