Research On Mechanism And Strategy Of Targeted Advertising Delivery Based On E-Business Platform

The improvement of network, communication and digitalization technology promote rapid development of E-commerce. Currently, the online behavior of consumers could be accurately recognized and analyzed, and then the firm can send targeted advertising to potential consumers with the assistance of e-commerce platform. Compared with mass advertising, targeted advertising focuses on the accurate match between ads contents, degree of targeting range, targeting opportunity and consumers’potential needs, which can effectively overcome the disadvantage of low recognition and accuracy of mass advertising, improve consumers’recognition and acceptable degree. Recently, although targeted advertising has been widely used in the firm’s marketing strategies, still there are a series of problems need to be solved. For instance, design of targeting range, choice of targeting object and influence of consumers’behavior in the application of targeted advertising etc., the analysis of these problems directly influence the application effect of firm’s targeted advertising. Therefore, with the assistance of game theory and optimization theory, the delivery mechanism and application strategies of targeted advertising are investigated in this paper.Firstly, the effects and optimization of targeting precision of targeted advertising in three distinct marketing environments are studied. The effect of targeting accuracy on firm’s profit in monopolistic market is investigated. The results indicate that the degree of accuracy and recognition play a bidirectional role in consumers’ need, consumer surplus and social welfare. After that, the role of targeting precision on firms’profits and market competition is investigated in duopolistic homogeneous consumer market. The results prove that the firm is inclined to enhance price in its advantage market whereas reduce the price in competitive market, whereas the excessive investment on targeting precision might reduce the firm’s profit. Then, the effects of targeting precision on firms’ profits in duopolistic heterogeneous consumer market are analyzed. The results indicate that the firm’s equilibrium profit is improved with the enhancement of targeting precision, whereas reduced with improvement of the rival firm’s targeting precision. The improvement of targeting precision in firm’s advantage market can be used as an effective tool for the market competition with the firm that using mass advertising.Secondly, effects of targeting wide-area degree on firm’s profit are studied. Each firm might enhance the targeting range of targeted advertising, and formulate the lower expected price and higher advertising level to obtain higher benefits. The targeting wide-area degree plays a bidirectional role in the regulation of firm’s profit. A much higher targeting wide-area degree might cause the waste of advertisements, whereas it is difficult for a much lower targeting wide-area degree to achieve effective advertisement propaganda. The analysis of the investment effect of targeting wide-area degree indicates that the targeting wide-area degree shows the reverse U-shape with the optimal advertising intensity of targeted advertising. Only the optimal targeting wide-area degree can make the firm obtain the maximum profit.Thirdly, the firm’s application strategies of targeted advertising in dual channel are studied. The results indicate that the firm can send targeted advertising to the potential consumer population more accurately, improve gathering level of segment market and screen out the price-sensitive consumers effectively. However, the targeted advertising is centralized in local market for manufacturers, whereas the retailer’s market share can be reduced, which might intensify the channel conflict between common retail channel and e-business channel. In consequence, manufacturers can regulate the advertising intensities of targeted advertising to affect the prices of products and market share, and thereby coordinate the channel conflict between retail channel and e-business channel.Then, two issues that relate to the effects of consumers’ behavior preference on the application of targeted advertising are investigated. For one thing, the strategies of dynamic targeted advertising towards the strategic consumers are analyzed. The results show that the firm can screen out the price-sensitive consumers by targeted advertising, thereby relieving the market competition. The firm is inclined to send more targeted advertising to consumers when the consumers adopt the strategy of information hiding. On the contrary, the firm might reduce the intensity of targeted advertising when the consumers adopt the strategy of advertising avoidance. For another, the firm’s optimal advertising strategy is investigated while considering consumers’advertising avoidance. The results indicate that the persuasive targeted advertising can affect the consumers’ signal judgment on product value and form anticipation. The firm should choose distinct type of persuasive targeted advertising to potential consumers to obtain the maximum profit even with distinct probability of advertising avoidance.Finally, two issues on targeted advertising with consumers’ distinct self-attributes are investigated. For one thing, how to send targeted advertising to the specific consumers according to the consumers’ behavior preference and combing with discriminative price is investigated. The results indicate that the firm always sends targeted advertising with higher intensity to its advantage market than that in disadvantage market. When discriminative price is allowed, the firm will make a high price for consumers in its advantage market and set a low price in its disadvantage market. However, when a firm has imperfect targeting capability, the firm’s strategy of targeted advertising and discriminative price might intensify the market competition. For another, the effects of consumers’ value features on the firm’s strategy of targeted advertising are studied. The results indicate that the firm’s profit with targeted advertising to the myopic consumers might lower than that using mass advertising, which depends on the ratio between high-value consumers and low-value consumers. Meanwhile, even though all consumers belong to rational consumers, it is always beneficial for the firm to send targeted advertising to consumers with distinct value properties.The rapid development of e-commerce promotes the extensive application of targeted advertising, and the firm needs to choose appropriate mode of targeted advertising and perform the optimal configuration on the accuracy of targeted advertising according to the demand of the market. When a firm sends the targeted advertising to the consumers, the firm needs to consider the consumers’ behavior preference and self-attributes, make the best of accurate advantage of targeted advertising and avoid potential risk for the aggravation of market competition, so as to improve the firm’s profit as much as possible.