What is "personalization"?

personalization is the concept of deciding - given a large set of possible choices - what has
the highest value to an individual.

As used on the Internet, the term Personalization has come to mean "person-specific content." Personalized content may be advertising, items for sale, screen layout, menus, news articles, or anything else we see via the Internet.
Personalization is the result of technology integrated into a website that allows the server to modify what is presented to each viewer. With personalization technology working, two individuals accessing the same website simultaneously may see two completely different sets of information.
Are there different types of personalization?
name recognition
check-box
segmentation & rules-based
preference-based
Personalization takes a variety of forms, identified here as four major categories.
From simplest to most complex, they are:
1) name recognition;
2) check box;
3) segmentation and rules-based; and
4) behavioral preference-based. These methods can coexist. Each type has a specific purpose, and two or more can be blended to produce a seamless, comprehensive personalized experience at a website.

Name Recognition

Name recognition, such as mail addressed to "Arthur Dent or current resident" is familiar to anyone who receives unsolicited printed material in the mail. This sort of mass personalization is one step above "Dear Homeowner at 123 Main Street..." but a few years ago it marked a turning point in mass marketing techniques. Name recognition continues to be used because it still has value; most people like to be acknowledged by name.

Check-Box Personalization

Check box is the short name for user-provided information. Check box personalization comes from questionnaires, surveys, registration forms and other solicitations in which the user answers specific questions. An example of this would be the registration page for a software purchase. Registration forms often ask for information about the program you just bought as well as additional information, such as store location, whether it's for home or business use, whether you're the head of household, etc. You check the box beside the appropriate answer. A website using check-box personalization presents content based on your answers.

Segmentation and Rules

Segmentation and rules-based personalization uses demographic, geographic, psychographic profile, or other information to divide or segment large populations into smaller groups. Data such as income level, geographic location and buying history is aggregated to identify groups of people. Websites using these types of personalization systems deliver content based on "if this, then that" rules processing.

Preference-Based Personalization

Preference-based personalization seeks to understand the behavioral preferences of a specific, individual user and then delivers website content specifically targeted to that user. This type of personalization operates on more complex algorithms than the other types and is able to factor more details into each interaction. It works by tracking user activity, comparing that activity with other users' behavior, and predicting what the user would like
to see next. Some preference-based personalization systems are learning systems that allow them to become more precise over time. A news website using preference-based personalization
might follow this sequence for content delivery: "Repeat visitor Bill Wessel clicked on Houston weather for 0.8 seconds, along with clicking on the Chicago Cubs Banner, and searched for 20 stock quotes during his previous visit. Therefore, the web page will load southwest weather news, last nights Chicago Cubs' Score, and the Nasdaq report at top of page upon his next visit."