From Precision to Perception: The Impact of Precision in Personalized Recommendation on Consumer Engagement

Despite the well-documented benefits of precision on consumer adoption rates, the impact of the degree of precision in personalized recommendations on consumer engagement is less understood. Utilizing a series of experiments across four studies, we investigate the extent to which precision influences consumer engagement with the recommended information. Contrary to conventional wisdom and existing findings, our results indicate that high precision in recommendations often decreases click-through intention. This effect is driven by an increase in consumer cynicism and a decrease in their sense of autonomy. However, these negative responses are mitigated when highly precise recommendations align with consumers’ consumption goals and the appropriate timing of exposure. As highly precise recommendations grows and concerns over consumer privacy intensify, understanding consumer responses to such precision is increasingly vital. This study provides a detailed analysis of the interplay between consumer perceptions and the precision of personalized recommendations, delivering crucial insights for marketers aiming to balance precision with consumer-perceived privacy in the dynamic realm of personalized marketing.