Customized advertising: Allowing consumers to directly tailor messages leads to better outcomes for the brand

A number of different methods have been used to enhance the level of message relevance to the viewer based on past behavior (e.g., retargeting), and/or specific information about the shopper (e.g., microtargeting). Sometimes consumers see ads created by other consumers. In all of these cases the ads are something that happens “to” the viewer. While the extent to which data is overtly or covertly collected may influence consumer preferences for the content shown, they are still recipients of what an algorithm decides would be best for them to see. This paper is the first to experimentally examine customized advertising, where individuals customize specific message elements, in some cases in perceived collaboration with others, varying the level of ad customization. We take our classification of “customization” from Arora et al. (2008) who define it as the degree to which a modification in a marketing mix element is proactively generated by the customer as opposed to the firm. With customized advertising, the ad is something that happens “with” the viewer. We find that as customization increases, so too does: strength of the perceived customer relationship with the company; sense of task engagement; perceptions of company trust/integrity; and, attitude toward the ad. Experiment 1 demonstrates that when overlap is high, customized advertising is superior to a random version of the ad. Experiment 2 extends this into a social media context, where participants believed they were socially co-creating the ad with others. Those who believed they socially co-created the ad demonstrated higher values on all key dependent variables. Study 3 indicates that for the individually generated ads, the effect of level of overlap between what is desired and what is received is mediated by perceived efficacy, suggesting that the process of creation is important to the effects observed, to the extent that the process yields outcomes.