Web Personalization: Serendipity Or Big Brother?

Posted by Kate Jurras on Mon, Dec 27, 2010

By guest blogger Peg Mulligan

At the December 15th MITX event on how to leverage personalization strategies, featuring key presenters Chuck Murphy, President, Boston Interactive; Nataly Kogan, Vice President, Consumer Experience, WHERE, Inc; and Cyril Lemaire, Partner, TrakTek Partners; attendees learned what a personalization strategy is, showcased results of implementing these strategies, and provided tips on how to personalize content. During the round-table discussion, participants explored the potential benefits of online serendipity—the process of making fortunate discoveries through location-based services—versus concerns about consumer privacy.

What Is a Personalization Strategy?

According to Murphy, personalizing content to fit customer needs involves using technology to account for differences between individuals’ behaviors and preferences. As an example, Murphy cited how the ASPCA personalizes its content for dog people versus cat people. 
Kogan threw down the gauntlet on such personalization when she announced that the goal of WHERE 3.0 is to kill traditional search through location discovery. In this scenario, CCTV resized 600customers don’t have to search anymore. Instead, WHERE’s recommendation engine learns about customer preferences and recommends great places to check out.

For Lemaire, who spoke on web personalization in travel, web personalization means providing the right message to the right person at the right time. It’s also important to remember that if one channel is personalized, you must apply this strategy across all the different channels.   

ROI of Web Personalization

Lemaire’s case-studies illustrated the strong ROI of web personalization, with overall increases in user engagement and customer retention. Most impressive was his case-study client’s reported 70% increase in profitability, with 20% revenue growth. To make such significant gains, Lemaire advised putting business logic in place to ensure fresh content, as well as keeping analysis and measurement at the fore-front, even after product launch.

How to Personalize Content

Murphy described the various ways to personalize content as implicit, explicit, or hybrid. Implicit personalization allows organizations to make better decisions based on online behavior, such as click-through paths and search terms. Explicit personalization, Murphy explained, refers to customer preferences. The hybrid approach, followed by Boston Interactive, involves personalizing content according to both customer behavior and preferences.

According to Kogan, WHERE 3.0 personalizes content, through a combination of collaborative filtering, (similar to the Amazon and Netflix models), as well as dimension reduction, (used by Pandora). She explained how WHERE 3.0 personalizes recommendations, called Best Bets, of places to visit, through a lifestyle genome, which includes familiarity (do you know who is making the recommendation), similarity (how similar are you to the recommenders), and your own interaction with places (for example, preferences indicated by liking content or clicking ads).

Lemaire shared various examples from the travel industry, demonstrating a multi-tactical approach to personalization, including site personalization, triggered email marketing, and outbound calling. He also cautioned that once you have committed to providing a personalized experience, there’s no going back.

What Does the Future Hold?

In the round-table discussion, Kagan imagined a future where technology not only speaks to us, but through a process of serendipity opens our eyes to options we didn't know existed. Murphy, on the other hand, speculated on possible backlash to these evolving technologies.

What do you think? Given the potential benefits, how much should we personalize online experiences? When do personalization strategies become too "Big Brother”? What’s your take on web personalization?