E-Commerce Platforms’ Cross-Platform Targeted Advertising Strategies: Cooperation with Social Media Platforms or Remaining Independent

E-commerce platforms are increasingly adopting cross-platform targeted advertising strategies, and the design of such strategies warrants attention. Focusing on cooperation between e-commerce and social media platforms, this study considers targeting precision, advertising intensity, privacy concerns and social utility on the effectiveness of targeted advertising. Using a game-theoretic model, we examine the decision between single- and cross-platform for e-commerce platforms in fully and partially overlapping user groups. The main findings indicate that (1) the social utility of social media platforms is a key factor in implementing cross-platform targeted advertising; (2) cross-platform targeted advertising is not always the optimal choice for e-commerce platforms; and (3) low-precision cross-platform strategy achieves three-party optimum in fully and partially overlapping user groups. The implications of the main findings include: (1) e-commerce platforms should prudently use social media platforms instead of relying excessively on their traffic; (2) e-commerce platforms should not regard cross-platform cooperation as the default option but as a differentiated, situation-specific decision; and (3) e-commerce platforms should promote co-creation of value and proprietary data accumulation when cooperating with social media platforms. The findings can help e-commerce platforms to choose proper targeted advertising strategy in practice. This study also provides a theoretical supplement for cross-platform targeted advertising research.