Personalization and Targeting: How to Experiment, Learn & Optimize
Published in International Journal of Research in Marketing, 2025
Personalization and targeting are key strategies in modern marketing, aiming to enhance customer engagement and firm performance by tailoring marketing actions to individual customer needs and characteristics. This paper provides a comprehensive framework for firms on how to effectively implement and optimize personalization strategies through a cycle of experimentation, learning, and optimization. We discuss various experimental designs, including A/B testing, multi-armed bandits, and factorial designs, that are suitable for learning about the heterogeneous effects of marketing interventions. We also review econometric and machine learning methods for modeling customer heterogeneity and for using the learned insights to optimize targeting policies. Throughout the paper, we highlight the practical challenges and opportunities that firms face when implementing personalization at scale.
Recommended citation: Lemmens, A., Roos, J., Gabel, S., Ascarza, E., Bruno, H., Gordon, B. R., Israeli, A., Feit, E. M., Mela, C., & Netzer, O. (2025). "Personalization and Targeting: How to Experiment, Learn & Optimize." International Journal of Research in Marketing, forthcoming.
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