The Effects of Personalization on Purchase Intentions for Online News: An Experimental Study of Different Personalization Increments

The media industry has been struggling to create sustainable business models for news content in the digital era. While the collapse of the traditional business models can be largely attributed to the rise of information technology, it can also assist in creating new once. Technological advances allow online merchants to offer a variety of personalization features, enabling them to tailor their offerings ever more accurately to the needs and tastes of individual users. We have taken a systematic experimental approach using an online news aggregator to answer the question of how different levels of personalization can affect users’ intentions to pay for news content. Results show that only personalization features that allow the users to constantly adapt the content to their needs yield a significant increase in purchase intention. Furthermore, supplementary design personalization may even decrease users’ intentions to purchase. Results of a post-hoc study with industry experts confirm the practical contribution of our research, demonstrating that some of our key findings are counterintuitive to professionals. Our findings contribute to the literature on web personalization and media management by experimentally demonstrating the value-add of different levels of personalization and by revealing counterintuitive implications for the media industry.