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Do Targeted Ads Really Work?

Yale SOM’s Prof. Jiwoong Shin and Jungju Yu of the City University of Hong Kong researched the effect of targeted ads on consumers aware of being targeted to come to an interesting realization. This study reveals that targeted ads might not have the expected effect. The test needs to consider the consumer’s reaction to being targeted.

Risks and rewards of targeted ads

The research found that customers who know an ad is targeted at them, respond very differently to the ad than those who don’t. Because of this dramatic difference in reaction, the researchers suggest that companies need to consider that while marketing their product.

In their study they saw that the more a brand invested to make an ad more targeted, or the more personalized an ad was, the more likely that customer was to seek out a competitor’s brand.

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