Website Morphing
Name
Hauser_Website Morphing.PDF
Size
4.28 MB
Format
Adobe PDF
Checksum (MD5)
4fc81df736f1ef37e0a3ad28bf04315c
Author(s)
Hauser, John R.
Urban, Glen L.
Liberali, Guilherme
Braun, Michael
Date Issued
March 2009
Journal
Marketing Science
Publisher
Institute for Operations Research and the Management Sciences
Citation
Hauser, John R. et al. “Website Morphing.” MARKETING SCIENCE 28.2 (2009): 202-223. © 2009 INFORMS
Version
Final published version
Abstract
Virtual advisors often increase sales for those customers who find such online advice to be convenient and helpful. However, other customers take a more active role in their purchase decisions and prefer more detailed data. In general, we expect that websites are more preferred and increase sales if their characteristics (e.g., more detailed data) match customers' cognitive styles (e.g., more analytic). "Morphing" involves automatically matching the basic "look and feel" of a website, not just the content, to cognitive styles. We infer cognitive styles from clickstream data with Bayesian updating. We then balance exploration (learning how morphing affects purchase probabilities) with exploitation (maximizing short-term sales) by solving a dynamic program (partially observable Markov decision process). The solution is made feasible in real time with expected Gittins indices. We apply the Bayesian updating and dynamic programming to an experimental BT Group (formerly British Telecom) website using data from 835 priming respondents. If we had perfect information on cognitive styles, the optimal "morph" assignments would increase purchase intentions by 21%. When cognitive styles are partially observable, dynamic programming does almost as well—purchase intentions can increase by almost 20%. If implemented system-wide, such increases represent approximately $80 million in additional revenue.
Subjects
telecommunications
website design
automated marketing
clickstream analysis
Bayesian methods
dynamic programming
cognitive styles
internet marketing
MIT Department
Sloan School of Management
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
Persistent DSpace Link
DOI of Published Version
http://dx.doi.org/10.1287/mksc.1080.0459
