New information technologies increasingly make it possible for service providers to adaptively personalize their service, fine-tuning the service over time for each individual customer, based on observation of that customer's behavior. We propose an “Adaptive Personalization System” and illustrate its implementation for digital audio players, a product category with rapidly expanding sales. The proposed system automatically downloads personalized playlists of MP3 songs into a consumer's mobile digital audio device and requires little proactive user effort (i.e., no explicit indication of preferences or ratings for songs). The system works in real time and is scalable to the massive data typically encountered in personalization applications. A simulation study shows the Adaptive Personalization System to outperform benchmark approaches. We implemented the Adaptive Personalization System on Palm PDAs and tested its performance with digital audio users. For actual users, the Adaptive Personalization System provides substantial improvements over benchmark approaches both in terms of the number of songs listened to and listening duration.
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