Category Archives: Consumer Psychology

A New Definition of Social

I am an introvert. My wife is an extrovert. Both of us have been self-isolating for about 5 weeks now.  I don’t know if our experiences are representative of introverts and extroverts as a group, but my sample size has – by necessity – been reduced to a “n” of 2. Our respective concepts of what it means to be social have been disruptively redefined, but in very different ways.

The Extro-Version

You’ve probably heard of Dunbar’s Number. It was proposed by anthropologist Robin Dunbar. It’s the “suggested cognitive limit to the number of people with whom one can maintain stable social relationships.” The number, according to Dunbar, is about 150. But that number is not an absolute. it’s a theoretical limit. Some of us can juggle way more social connections than others.

My wife’s EQ (emotional quotient) is off the charts. She has a need to stay emotionally connected to a staggering number of people. Even in normal times, she probably “checks in” with dozens of people every week. Before COVID-19, this was done face-to-face whenever possible.

Now, her empathetic heart feels an even greater need to make sure everyone is doing okay. But she has to do it through socially distanced channels. She uses text messaging a lot. But she also makes at least a few phone calls every day for those in her network who are not part of the SMS or social media universe.

She has begun using Zoom to coordinate virtual get-togethers of a number of her friends. Many in this circle are also extroverts. A fair number of them are – like my wife – Italian. You can hear them recharging their social batteries as the energy and volume escalates. It’s not cappuccino and biscotti but they are making do with what they’ve got.

Whatever the channel, it has been essential for my wife to maintain this continuum of connection.

The Intro-Version

There are memes circulating that paint the false picture that the time has finally come for us introverts. “I’ve been practicing for this my entire life,” says one. They consistently say that life in lockdown is much harder for extroverts than introverts. They even hint that we should be in introvert’s heaven. They are wrong. I am not having the time of my life.

I’m not alone. Other introverts are having trouble adjusting to a social agenda being forced upon them by their self-isolated extrovert friends and colleagues. We introverts seldom get to write the rules of social acceptability, even in a global pandemic.

If you type “Are introverts more likely” into Google, it will suggest the following ways to complete that sentence: “to be depressed”, “to be single”, “to have anxiety”, “to be alcoholic”, and “to be psychopaths”. The world is not built for introverts.

Understanding introversion vs extroversion is to understand social energy. Unlike my wife for whom social interactions act as a source of renewal, for me they are a depletion of energy. If I’m going to make the effort, it better be worth my while. A non-introvert can’t understand that. It’s often interpreted as aloofness, boredom or just being rude. It’s none of these. It’s just our batteries being run down.

Speaking for myself, I don’t think most introverts are antisocial. We’re just “differently” social. We need connections the same as extroverts. But those connections are of a certain kind. It’s true that introverts are not good at small talk. But under the right circumstances, we do love to talk. Those circumstances are just more challenging in the current situation.

Take Zoom for instance. My wife, the extrovert, and myself, the introvert, have done some Zoom meetings side by side. I have noticed a distinct difference in how we Zoom. But before I talk about that, let me set a comparative to a more typical example of an introvert’s version of hell: the dreaded neighborhood house party.

As an introvert in this scenario, I would be constantly reading body language and non-verbal cues to see if there was an opportunity to reluctantly crowbar my way into a conversation. I would only do so if the topic interested me. Even then, I would be subconsciously monitoring my audience to see if they looked bored. On the slightest sign of disinterest, I would awkwardly wind down the conversation and retreat to my corner.

It’s not that I don’t like to talk. But I much prefer sidebar one-on-one conversations. I don’t do well in environments where there is too much going on. In those scenarios, introverts tend to clam up and just listen.

Now, consider a Zoom “Happy Hour” with a number of other people. All of that non-verbal bandwidth we Introverts rely on to pick and choose where we expend our limited social energy is gone.   Although Zoom adds a video feed, it’s a very low fidelity substitute for an in-the-flesh interaction.

With all this mental picking and choosing happening in the background, you can understand why introverts are slow to jump into the conversational queue and, when we finally do, we find that someone else (probably an extrovert) has started talking first. I’m constantly being asked, “Did you say something Gord?”, at which point everyone stops talking and looks at my little Zoom cubicle, waiting for me to talk. That, my friends, is an introvert’s nightmare.

Finally, I Get the Last Word

Interestingly, neither my wife nor I are using Facebook much for connection. She has joined a few Facebook groups, one of which is a fan club for our provincial health officer, Dr. Bonnie Henry. Dr. Henry has become the most beloved person in B.C.

And I’m doing what I always tell everyone else not to do; follow my Facebook newsfeed and go into self-isolated paroxysms of rage about the Pan-dumb-ic and the battle between science and stupidity.

There is one social sacrifice that both my wife and I agree on. The thing we miss most is the ability to hug those we love.

Is the Marketing Industry Prepared for What Lies Ahead?

It was predictable. Humans are starting to do what humans do. We are beginning to shift gears, working our way through the stages of shock. We are daring to look beyond today and wondering what tomorrow might be like. Very smart people, like Sapiens author Yuval Noah Harari, are concerned about what we may trade away in the teeth of this crisis.

Others, like philosopher Barbara Muraca, climate change advocate Greta Thurnberg and Media Spin’s own Kaila Colbin,  are hoping that this might represent a global reset moment for us. Perhaps this will finally break our obsession with continual year after year growth, fueled by our urges to acquire and consume. We in the advertising and marketing business kept dumping gas on this unsustainable dumpster fire. There is hope by some – including myself – that COVID-19 will be a kind of shock therapy, convincing us to take a kinder, gentler approach to both the planet and each other.

My own crystal ball gazing is on a much-reduced scale. Specifically, I’m wondering what advertising and marketing might be like in our immediate future. I started by looking back at what history can teach us about recovery from a crisis.

Both World Wars resulted in explosions of consumerism. One could probably make the argument that the consumerism that happened after World War II has continued pretty much uninterrupted right to the current day. We basically spent our way out of the dotcom implosion of 1999 – 2002 and the Great Recession of 2007 – 2009.

But will this be different? I think it will, for three reasons.

One, both World Wars repressed consumer demand for a matter of years. With World War I it was four years, plus another 3 marked by the Spanish Flu Pandemic and a brief but sharp recession as the economy had to shift gears from wartime to peace time. With World War II, it was 6 years of repressed consumerism. 

Secondly, the wars presented those of us here in North America with a very different psychological landscape. We went “over there” to fight and then “came home” when it was done. The war wasn’t on our front stoop. That gave us both physical and emotional distance after the war was over.

Finally, when the war was over, it was over. The world had to adjust to a new normal, but the fighting had stopped. That gave consumers a clear mental threshold to step beyond. You didn’t have to worry that you might be called back into service on any day, returning once again to the grim reality that was.

For these three reasons, I think our consumer mentality may look significantly different in the coming months. As we struggle back to whatever normal is between now and the discovery of a vaccine – currently estimated at 12 to 18 months – we will have a significantly different consumer reality. We don’t have years of pent up consumer demand that will wash away any pragmatic thoughts of restraint. We have been dealing with a crisis that has crept into our very homes. It has been present in every community, every neighborhood. And – most importantly – we will be living in a constant state of anxiety and fear for the foreseeable future. These three things are going to have a dramatic impact on our desire to consume.

Blogger Tomas Pueyo did a good job of outlining what our new normal may look like in his post The Hammer and The Dance. We are still very much in the “Hammer” phase but we are beginning to wonder what the “Dance” may look like.

In our immediate future, we are going to hear a lot about the Basic reproductive rate – denoted as R0  – or R naught. This is the measure of the number of cases, on average, an infected person will cause during their infectious period. A highly infectious disease, like measles, has a R naught of between 12 and 18. Current estimates on COVID-19 put its R naught between 1.5 and 3.5. Most models assume a R naught of 2.4 or so.

This is important to understand if we want to understand what our habits of consumption might look like until a vaccine is found. As long as that R naught number is higher than 1, the disease continues to spread. If we can get it lower than 1, then the numbers stabilize and eventually decline. The “Dance” Pueyo refers to is the actions that need to be taken to keep the R naught number lower than 1 without completely stalling the economy. With extremely restrictive measures you theoretically could reduce the R naught to zero but in the process, you shut down the entire economy. Relax the restrictions too much and the R naught climbs back up into exponentially increasing territory.

Much of the commentary I’m reading is assuming we will go back to “normal” or some variation of it. But the new “normal” is this dance, where we will be balanced on the knife’s edge between human cost and economic cost. For the next several months we will be teetering from one side to the other. At best, we can forget about widespread travel, large public gatherings and sociability as we previously knew it. At worst, we go back into full lockdown.

This is the psychological foundation our consumption will be based on. We will be in a constant state of anxiety and fear. And our marketing strategies will have to address that. Further, marketing needs to factor in this new normal in an environment where brand messaging is no longer a unilateral exercise. It is amplified and bent through social media. Frayed nerves make for a very precarious arena in which to play a game we’re still learning the rules of. We can expect ideological and ethical divisions to widen and deepen during the Dance.

The duration of the Dance will be another important factor to consider when we think about marketing. If it goes long enough, our temporary behavioral shifts become habits. The changes that are forced upon us may become permanent. Will we ever feel good about stepping aboard a cruise ship? Will we be ever be comfortable again in a crowded restaurant or bar? Will we pay 300 dollars to be jammed into a stadium with 50 thousand other people? We don’t know the answers to these questions yet.

Successful market depends on being able to anticipate the mood of the audience. The Dance will make that much more difficult. We will be racing up and down Maslow’s Hierarchy of Needs at a frenzied pace that would make a game of Snakes and Ladders seem mild by comparison.

That’s what happens in times of crisis. In normal times we spend our lifetimes scaling Abraham Maslow’s elegant model from the bottom – fulfilling our most basic physical needs – to the top – an altruistic concern for the greater good. Most of us spend much of our time stuck somewhere north of the middle, obsessed with our own status and shoring up our self-esteem. It’s this relatively stable mental state that the vast majority of marketing is targeted at.

But in a chronic crisis mode like that which is foretold by the Dance, we can crash from the top to the bottom of the hierarchy in the blink of an eye. And we will all be doing this at different times in different locations.

The Dance introduces a consumer scenario marketers have never encountered before. We will crave comfort and security. We will be desperate for glimpses of positivity. And it’s certain that our values and beliefs will shift but it’s difficult to predict in which direction. While my hope is that we become kinder and gentler people, I suspect it will be a toss-up. It could well go the other way.

If you thought marketing was tough before, buckle up!

Quant vs Qual in the time of Crisis

Digesting reality is becoming more and more difficult. I often find myself gagging on it. Last Friday was a good example. I have been limiting my news intact for my own sanity, but Friday morning I went down the rabbit hole. Truth be told, I started doing some research for the post I was intending to write (which I will probably get to next week) and I was soon overwhelmed with what I was reading.

I’m beginning to suspect that we’re getting an extra dump of frightening news on Fridays as officials realize that it’s more difficult to enforce social distancing on weekends. Whether this is the case or not, I found my chest tightening from anxiety. My hands got shaky as I found myself clicking on frightening link after frightening link. Predictions scared the shit out of me. I was worried for my community and country. I was worried for myself. But most of all, I was worried for my kids, my wife, my dad, my in-laws and my family.

Fear and anxiety swamped my normally rational side. Intellect gave way to despair. That’s not a good mode for me. I have to run cool – I need to be rational to function. Emotions mentally shut me down.

So I retreated to the numbers. My single best source throughout this has been the posts from Tomas Pueyo – the VP of Growth at Course Hero. They are exhaustively researched statistical analyses and “what-if” models assembled by an ad-hoc team of rockstar quants. On his first post on March 10 –  “Coronavirus: Why You Must Act Now” – Pueyo and his team nailed it. If everyone listened and followed his advice, we wouldn’t be where we are now. Similarly, his post on March 19 – “Coronavirus: The Hammer and The Dance” gave a tough but rational prescription to follow. His latest – “Coronavirus: Out of Many, One” – drills down on a state-by-state analysis of COVID in the US.

I’m not going to blow smoke here. These are tough numbers to read. Even the best-case scenarios would have been impossible to imagine just a few weeks ago. But the worst-case scenarios are exponentially more frightening. And if you – like me – needs to retreat to ration in order to keep functioning, this is the best rationale I’ve found for dealing with COVID 19. It’s not what we want to hear, but it’s what we must listen to.

In my marketing life, I always encouraged a healthy mix of both quantitative and qualitative perspectives in trying to understand what is real. I’ve said in the past: “Quantitative is watching the dashboard while you drive. Qualitative is looking out the windshield.”

I often find that marketers tend to focus too much on the numbers and not enough on the people on the other side of those numbers. We were an industry deluged with data and it made us less human.

Ironically, I now find myself on the other side of that argument. We have to understand that even our most trustworthy media sources are going to be telling us the stories that have the most impact on us. Whether you turn to Fox or CNN as your news source, we would be getting soundbites out of context that are – by design – sensational in nature. They may differ in their editorial slants, but – right or left – we can’t consider them representational of reality. They are the outliers.

Being human, we can’t help but apply these to our current reality. It’s called availability bias. It the simplest terms possible, it means that those things that are most in our face become our understanding of any given situation.

In normal times, these individual examples can heighten our humanity and make us a little less numb. They remind us of the relevance of the individual experience– the importance of every life and the tragedy of even one person suffering.

“If only one man dies of hunger, that is a tragedy.
If millions die, that’s only a statistic.”

– Joseph Stalin

Normally, I would never dream of quoting Joe Stalin in a post. But these are not normal times. And the fact is, Stalin was right. when we start looking at statistics and mathematical modelling, our brain works differently. It forces us to use a more rational cognitive mechanism; one less likely to be influenced by emotion. And in responding to a crisis, this is exactly the type of reasoning required.

This is a time unlike anything any of us has experienced. In times like this, actions should be based on the most accurate and scientific information possible. We need the cold, hard logic of math as a way to not become swamped by the wave of our own emotions. In order to make really difficult decisions for the greater good, we need to distance ourselves from our own little bubbles of reality, especially when that reality is made up of non-representative examples streamed to us through media channels.

A Lesson Learned from the Lost Generation

“I wasn’t around for Y2K. Was it like this?”

The question was posed to me by a young man named Jeremy – about 18 or 19 – who brought the online order of groceries to my car. He had just been telling me how store employees had been scrambling to stay ahead of items people were starting to hoard so they could post limits to prevent the shelves being stripped bare. On this day, it was bread. He shook his head, unable to wrap it around people’s panic. He was trying to relate it to something that could serve as a baseline.

My initial reaction to his question was to laugh. Y2K was a nothingburger. We panicked, we nervously rang in the New Year of 2000, and then we laughed sheepishly and went on with life.

This is different. On so many levels. I told that to Jeremy. “I have been around for almost 60 years. I have never experienced anything like this before.”

I’ve been thinking about that conversation a lot since. In Jeremy’s short time here on the planet, he probably has never experienced true hardship. But then, neither have I. Not really. Not like what we’re about to experience.

If you were to plot a trendline of my life over the last 6 decades, it would overwhelmingly be up and to the right. Sure, there were blips. But it’s been a pretty damned good 60 years. For me, hardship has been defined by putting off a trip because I couldn’t afford it. Or buying a used car when I wanted a new one. Poor me.

In the writing of this, I tried to find some formula to put magnitude of significance to events like this. I couldn’t find one, so I made my own:

Personal Impact X Number of People Impacted X Duration of Impact

The Pew Research Center asked Americans to rank the most significant events of their lifetimes in 2016. If we just look at those events that were negative, they were 9/11 (by a significant margin), the JFK assassination and the Vietnam War.

But now let’s attempt to quantify the magnitude of significance. When I say personal impact, I’m not talking about emotional impact. I’m talking about material impacts on my life that are directly attributable to the event.

My heart broke on 9/11, just like all of yours. That day would change my perspective on many things. But in real terms, it didn’t shift my life in any significant ways. There was tightened security when I travelled, but that was about it. This in no way minimizes the tragedy of the event. I know it was excruciatingly real for some of you reading this. I’m just putting it in perspective for myself.

This will be different. There is a shit-ton of uncertainty about what lies ahead, but I’m pretty sure all our lives are going to change significantly for the next 18 months to 2 years at least.  And it will impact everyone in the world. The vast majority of us have never been through anything like this before.  But others have. In fact, a whole generation has. Unfortunately, none of them are around to talk to. They were called the Lost Generation.

My Grandfather was part of this generation. Officially, those belonging to the Lost Generation were born between 1883 and 1900. Charles Edward Hotchkiss was born in Herefordshire, England in 1888. He died in Ontario, Canada in 1955, at the age of 67. He was just 8 years older than I am today. Given what we’re going through currently, I stopped to think about what “Charlie” experienced in his lifetime.

In 1910, he boarded the SS Lake Champlain in Liverpool and came to Canada. He was 21. Four years later, he volunteered for service in World War I. In the next 4 years, 9 million soldiers would die, 21 million would be wounded (my grandfather was one of them), 7 million would be left permanently disabled. 10 million civilians also died.

Those numbers are staggering, but an even deadlier and more significant event was just getting started in 1917. Today, we remember it as the Spanish Flu but that is a misnomer. It was called that because early reporting of the severity of the influenza pandemic was censored in wartime Europe for fear that troops would panic and desert. The only country where reporting was somewhat accurate was in neutral Spain, which led to the mistaken notion that the impact was worse there than anywhere else. By the time the epidemic subsided in 1920, somewhere between 50 and 100 million people would die. It had infected 500 million people, a quarter of the world’s population.

This was the reality newly discharged Charlie came back to when he stepped off the boat in Halifax on September 14, 1919. He was 31.

Charlie married my grandmother, Rose, in 1926. Three years later, the world slipped into the Great Depression. Half of all banks in the US failed. Unemployment spiked to 25%. International trade collapsed by 65%. Millions became homeless migrants. And it would continue like this for the next 10 years. In the middle of all this – in 1935 – Charlie and Rose had a baby. It was my father, William Francis Hotchkiss.

When my dad was just 4, World War II started. My grandfather, who was 50, was too old to actively serve but the impact of the war was still immense on Rose, William and Charlie. Over the next 6 years, 100 million people would be directly impacted from more than 30 countries. It is estimated 20 million military personnel and 40 million civilians would die in those 6 years.

These events, any one of which would be staggering to us, were packed into just 3 decades. I tried to imagine myself going through that from 1990 to today. I couldn’t.

Sometimes, when you can’t see forward, it’s helpful to look back. When I did that, I realized we’re a pretty resilient species. The Lost Generation laid the foundation for the world we live in today. They weathered storm after storm after storm. They made it through. They raised families, started businesses and survived.

It will get hard for us. Really hard. It’s a definition of hardship many of us will be dealing with for the first time in our lives. But we go into this with technological and societal advantages the Lost Generation never had or could even dream of. We should be able to do this without falling apart.

We come from good stock.

Whipped Into a Frenzy

Once again, we’re in unprecedented territory. According to the CDC – COVID-19 is the first global pandemic since the 2009 H1N1 outbreak. While Facebook was around in 2009, it certainly wasn’t as pervasive or impactful as it is today. Neither – for that matter – was H1N1 when compared to COVID-19. That would make COVID-19 the first true pandemic in the age of social media.

While we’re tallying the rapidly mounting human and economic costs of the pandemic on a day-by-day basis, there is a third type of damage to consider. There will be a cognitive cost to this as well.

So let’s begin by unpacking the psychology of a pandemic. Then we’ll add the social media lens to that.

Emotional Contagion aka “The Toilet Paper Syndrome”

Do you have toilet paper at your local store? Me neither. Why?

The short answer is that there is no rational answer. There is no disruption in the supply chain of toilet paper. If you were inclined to stock up on something to battle COVID-19, hand sanitizer would be a much better choice.  Search as you might, there is no logical reason why people should be pulling toilet paper by the pallet full out of their local Costco.

There is really only one explanation; panic is contagious. It’s called emotional contagion. And there is an evolutionary explanation for it. We evolved as herd animals and when our threats came from the environment around us, it made sense to panic when you saw your neighbor panicking. Those that were on the flanks of the herd acted as an early warning system for the rest. When you saw panic close to you, the odds were very good that you were about to be eaten, trampled or buried under a rockslide. We’re hardwired to live by the principle of “Monkey see, monkey do.”

Here’s the other thing about emotional contagion. It doesn’t work very well if you have to take time to think about it. Panicked responses to threats from your environment will only save your life if they happen instantly. Natural selection has ensured they bypass the slower and more rational processing loops of our brain.

But now let’s apply the social media lens to this. Before modern communication tools were invented, emotional contagion was limited by the constraints of physical proximity. It was the original application of social distancing. Emotions could spread to a social node linked by physical proximity, but it would seldom jump across ties to another node that was separated by distance.

Then came Facebook, a platform perfectly suited to emotional contagion. Through it, emotionally charged messages can spread like wildfire regardless of where the recipients might be – creating cascades of panic across all nodes in a social network.

Now we have cascades of panic causing – by definition – irrational responses. And that’s dangerous. As Wharton Management professor Sigal Barsade said in a recent podcast, “I would argue that emotional contagion, unless we get a hold on it, is going to greatly amplify the damage caused by COVID-19”

Why We Need to Keep Calm and Carry On

Keep Calm and Carry On – the famous slogan from World War II Britain – is more than just a platitude that looks good on a t-shirt. It’s a sound psychological strategy for survival, especially when faced with threats in a complex environment. We need to think with our whole brain and we can only do that when we’re not panicking.

Again, Dr. Barsade cautions us “One of the things we also know from the research literature is that negative emotions, particularly fear and anxiety, cause us to become very rigid in our decision-making. We’re not creative. We’re not as analytical, so we actually make worse decisions.”

Let’s again consider the Facebook Factor (in this case, Facebook being my proxy for all social media). Negative emotional messages driven by fear gets clicked and shared a lot on social media. Unfortunately, much of that messaging is – at best – factually incomplete or – at worst – a complete fabrication. A 2018 study from MIT showed that false news spreads six times faster on social media than factual information.

It gets worse. According to Pew Research, one in five Americans said that social media is their preferred source for news, surpassing newspapers. In those 18 -to 29, it was the number one source. When you consider the inherent flaws in the methodology of a voluntary questionnaire, you can bet the actual number is a lot higher.

Who Can You Trust?

Let’s assume we can stay calm. Let’s further assume we can remain rational. In order to make rational decisions, you need factual information.

Before 2016, you could generally rely on government sources to provide trustworthy information. But that was then. Now, we live in the reality distortion field that daily spews forth fabricated fiction from the Twitter account of Donald. J. Trump, aka the President of the United States.

The intentional manipulation of the truth by those we should trust has a crippling effect on our ability to respond as a cohesive and committed community. As recently as just a week and a half ago, a poll found that Democrats were twice as likely as Republicans to say that COVID-19 posed an imminent threat to the U.S. By logical extension, that means that Republicans were half as likely to do something to stop the spread of the disease.

My Plan for the Pandemic

Obviously, we live in a world of social media. COVID-19 or not, there is no going back. And while I have no idea what will happen regarding the pandemic, I do have a pretty good guess how this will play out on social media. Our behaviours will be amplified through social media and there will be a bell curve of those behaviors stretching from assholes to angels. We will see the best of ourselves – and the worst – magnified through the social media lens.

Given that, here’s what I’m planning to do. One I already mentioned. I’m going to keep calm. I’m going to do my damnedest to make calm, rational decisions based on trusted information (i.e. not from social media or the President of the United States) to protect myself, my loved ones and anyone else I can.

The other plan? I’m going to reread everything from Nassam Nicholas Taleb. This is a good time for all of us to brush up on our understanding of robustness and antifragility.

What Happens When A Black Swan Beats Up Your Brand

I’m guessing the word Corona brings many things to your mind right now — and a glass full of a ice-cold beer may not be one of them. A brand that once made us think of warm, sunny beaches and Mexican vacations on the Mayan Riviera now is mentally linked to a global health crisis. Sometimes the branding gods smile on you in their serendipity, and sometimes they piss in your cornflakes. For Grupo Modelo, the makers of Corona beer, the latter is most definitely the case.

As MediaPost Editor Joe Mandese highlighted in a post last week, almost 40% of American beer drinkers in a recent poll would not buy Corona under any circumstances. Fifteen percent of regular Corona drinkers would no longer order it in public. No matter how you slice those numbers, that does not bode well for the U.S.’s top-selling imported drink.

It remains to be seen what effect the emerging pandemic will have on the almost 100-year-old brand. Obviously, Grupo Modelo, the owners of the brand, are refuting that there is any permanent damage. But then, what else would you expect them to say?  There’s a lot of beer sitting on shelves around the world that is waiting to be drunk. It’s just unfortunate it has the same name as a health crisis that so far is the biggest story of this decade.

This is probably not what the marketing spin doctors at Grupo Modelo want to hear, but a similar thing happened about 40 years ago.  Here is the story of another brand whose name got linked to the biggest health tragedy of the 1980s.

In 1946 the Carlay Company of Chicago registered a trademark for a “reducing plan vitamin and mineral candy” that had been in commercial use for almost a decade. The company claimed that users of the new “vitamin” could “lose up to 10 pounds in 5 days, without dieting or exercising.” The Federal Trade Commission soon called bullshit on that claim, causing the Carlay Company to strip it from its marketing in 1944.

Marketing being marketing, it wasn’t the vitamins in this “vitamin” that allegedly caused the pounds to melt away. In the beginning, it was something that chemists call benzocaine. That’s a topical anesthetic you’ll also find it in over-the-counter products like Orajel. Basically, benzocaine numbed the tongue. The theory was that a tongue that couldn’t taste anything would be less likely to crave food.

The active ingredient was later changed to phenylpropanolamine, which was also used as a decongestant in cold medications and to control urinary incontinence in dogs. In the ‘60s and ’70s, it became a common ingredient in many diet pills. Then it was discovered to cause strokes in young women.

The Carlay Company eventually became part of the Campana Corporation, which in turn was sold to Purex. The product morphed from a vitamin to a diet candy and was sold in multiple flavors, including chocolate, chocolate mint, butterscotch and caramel. If you remember Kraft caramels — little brown cubes packaged in clear cellophane — you have a good idea what these diet candies looked like.

Despite the shaky claims and dubious ingredients, the diet candies became quite popular. I remember my mother, who had a lifelong struggle with her weight, usually had a box of them in the cupboard when I was growing up. Sale hit their peak in the ‘70s and early ‘80s. There were TV ads and celebrity endorsers — including Bob Hope and Tyrone Power — lined up to hawk them.

Then, in 1981, the Centers for Disease Control and Prevention (CDC) published a report about five previously healthy men who all became infected with pneumocystis pneumonia. The odd thing was that this type of pneumonia is almost never found in healthy people. There was another odd thing. All five men were gay. In 1982, the CDC gave a name to this new disease: AIDS.

Of all the ways AIDS changed our world in the 1980s, one was particularly relevant to the marketers of those diet candies, which just happened to be named Ayds.

You can see the problem.

Ayds soldiered on until 1988, despite sales that dropped 50%. The company tried to find a new name, including Diet Ayds and Aydslim in the U.K. It was too little, too late. The candies were eventually withdrawn from the market.

Does this foretell the fate of Corona beer? Perhaps not. AIDS has been part of our public consciousness for four decades. A product with a similar sounding name didn’t stand a chance. We can hope that coronavirus will not have the same longevity. And the official name of the outbreak has now been changed to Covid19. For both these reasons, Corona — the beer — might be able to ride out the storm caused by corona, the virus.

But you can bet that there are some pretty uncomfortable meetings being held right now in the marketing department boardroom at Grupo Modelo.

The Fundamentals of an Evil Marketplace

Last week, I talked about the nature of tech companies and why this leads to them being evil. But as I said, there was an elephant in the room I didn’t touch on — and that’s the nature of the market itself. The platform-based market also has inherent characteristics that lead toward being evil.

The problem is that corporate ethics are usually based on the philosophies of Milton Friedman, an economist whose heyday was in the 1970s. Corporations are playing by a rule book that is tragically out of date.

Beware the Invisible Hand

Friedman said, “The great virtue of a free market system is that it does not care what color people are; it does not care what their religion is; it only cares whether they can produce something you want to buy. It is the most effective system we have discovered to enable people who hate one another to deal with one another and help one another.”

This is a porting over of Adam Smith’s “Invisible Hand” theory from economics to ethics: the idea that an open and free marketplace is self-regulating and, in the end, the model that is the most virtuous to the greatest number of people will take hold.

That was a philosophy born in another time, referring to a decidedly different market. Friedman’s “virtue” depends on a few traditional market conditions, idealized in the concept of a perfect market: “a market where the sellers of a product or service are free to compete fairly, and sellers and buyers have complete information.”

Inherent in Friedman’s definition of market ethics is the idea of a deliberate transaction, a value trade driven by rational thought. This is where the concept of “complete information” comes in. This information is what’s required for a rational evaluation of the value trade. When we talk about the erosion of ethics we see in tech, we quickly see that the prerequisite of a deliberate and rational transaction is missing — and with it, the conditions needed for an ethical “invisible hand.”

The other assumption in Friedman’s definition is a marketplace that encourages open and healthy competition. This gives buyers the latitude to make the choice that best aligns with their requirements.

But when we’re talking about markets that tend to trend towards evil behaviors, we have to understand that there’s a slippery slope that ends in a place far different than the one Friedman idealized.

Advertising as a Revenue Model

For developers of user-dependent networks like Google and Facebook, using advertising sales for revenue was the path of least resistance for adoption — and, once adopted by users, to profitability. It was a model co-opted from other forms of media, so everybody was familiar with it. But, in the adoption of that model, the industry took several steps away from the idea of a perfect market.

First of all, you have significantly lowered the bar required for that rational value exchange calculation. For users, there is no apparent monetary cost. Our value judgement mechanisms idle down because it doesn’t appear as if the protection they provide is needed.

In fact, the opposite happens. The reward center of our brain perceives a bargain and starts pumping the accelerator. We rush past the accept buttons to sign up, thrilled at the new capabilities and convenience we receive for free. That’s the first problem.

The second is that the minute you introduce advertising, you lose the transparency that’s part of the perfect market. There is a thick layer of obfuscation that sits between “users” and “producers.” The smoke screen is required because of the simple reality that the best interests of the user are almost never aligned with the best interests of the advertiser.

In this new marketplace, advertising is a zero-sum game. For the advertiser to win, the user has to lose. The developer of platforms hide this simple arithmetic behind a veil of secrecy and baffling language.

Products That are a Little Too Personal

The new marketplace is different in another important way: The products it deals in are unlike any products we’ve ever seen before.

The average person spends about a third of his or her time online, mostly interacting with a small handful of apps and platforms. Facebook alone accounts for almost 20% of all our waking time.

This reliance on these products reinforces our belief that we’re getting the bargain of a lifetime: All the benefits the platform provides are absolutely free to us! Of course, in the time we spend online, we are feeding these tools a constant stream of intimately personal information about ourselves.

What is lurking behind this benign facade is a troubling progression of addictiveness. Because revenue depends on advertising sales, two factors become essential to success: the attention of users, and information about them.

An offer of convenience or usefulness “for free” is the initial hook, but then it becomes essential to entice them to spend more time with the platform and also to volunteer more information about themselves. The most effective way to do this is to make them more and more dependent on the platform.

Now, you could build conscious dependency by giving users good, rational reasons to keep coming back. Or, you could build dependence subconsciously, by creating addicts. The first option is good business that follows Friedman’s philosophy. The second option is just evil. Many tech platforms — Facebook included — have chosen to go down both paths.

The New Monopolies

The final piece of Friedman’s idealized marketplace that’s missing is the concept of healthy competition. In a perfect marketplace, the buyer’s cost of switching  is minimal. You have a plethora of options to choose from, and you’re free to pursue the one best for you.

This is definitely not the case in the marketplace of online platforms and tools like Google and Facebook. Because they are dependent on advertising revenues, their survival is linked to audience retention. To this end, they have constructed virtual monopolies by ruthlessly eliminating or buying up any potential competitors.

Further, under the guise of convenience, they have imposed significant costs on those that do choose to leave. The net effect of this is that users are faced with a binary decision: Opt into the functionality and convenience offered, or opt out. There are no other choices.

Whom Do You Serve?

Friedman also said in a 1970 paper that the only social responsibility of a business is to Increase its profits. But this begs the further question, “What must be done — and for whom — to increase profits?” If it’s creating a better product so users buy more, then there is an ethical trickle-down effect that should benefit all.

But this isn’t the case if profitability is dependent on selling more advertising. Now we have to deal with an inherent ethical conflict. On one side, you have the shareholders and advertisers. On the other, you have users. As I said, for one to win, the other must lose. If we’re looking for the root of all evil, we’ll probably find it here.

The Ruts of Our Brain

We are not – by nature – open minded. In fact, as we learn something, the learning creates neural pathways in our brain that we tend to stick to. In other words, the more we learn, the bigger the ruts get.

Our brains are this way by design. At its core, the brain is an energy saving device. If there are two options open to it, one requiring more cognitive processing and one requiring less, the brain will default to the less resource intensive option.

This puts expertise into an interesting new perspective. In a recent study, researchers from Cold Spring Harbor Laboratory, Columbia University, University College London and Flatiron Institute found that when mice learn a new task, the neurons in their brain actually change as they move from being a novice to an expert. At the beginning as they’re learning the task, the required neurons don’t “fire” until the brain makes a decision. But, as expertise is gained, those same neurons start responding before they’re even needed. It’s essentially Hebbian Theory (named after neurologist Donald Hebbs) in action: the neurons that fire together eventually wire together.

We tend to think of experts as bringing a well-honed subset of intellectual knowledge to a question. And that is true, as long as the question is well within their area of expertise. But the minute an expert ventures outside of their “rut” they begin to flounder. In fact, even when they are in their area of expertise but are asked to predict where that path that may lead in the future – beyond their current rut – their expertise doesn’t help them. In 2005 psychologist Phillip Tetlock published “Expert Political Judgement” – a book showing the results of a 20-year long study on the prediction track record of experts. It wasn’t good. According to a New Yorker review of the book, “Human beings who spend their lives studying the state of the world…are poorer forecasters than dart-throwing monkeys”

Why? Well, just like those mice in the above-mentioned study, once we have a rut, our brains like to stick to the rut. It’s just easier for us. And experts have very deep ruts. The deeper the rut, the more effort it takes to peer above it. As Tetlock found, when it comes to predicting what might happen in some area in the future, even if you happen to be an expert in that area, you’d probably be better off flipping a coin than relying on your brain.

By the way, for most of human history, this has been a feature, not a bug. Saving cognitive energy is a wonderful evolutionary advantage. If you keep doing the same thing over and over, eventually the brain pre-lights the neuronal path required, saving itself time and energy. The brain is directing anticipated traffic at faster than the speed of thought. And it’s doing it so well, it would take a significant amount of cognitive horsepower to derail this action.

Like I said, in a fairly predictably world of cause and effect, this system works. But in an uncertain world full of wild card complexity, it can be crippling.

Complex worlds require Foxes, not Hedgehogs. This analogy also comes from Tetlock’s book. According to an old Greek fable, “The fox knows many things but the hedgehog knows just one thing.” To that I would add; the fox knows a little about many things, but the hedgehog knows a lot about one thing. In other words, the hedgehog is an expert.

In Tetlock’s study, people with “fox” qualities had a significantly better track record then “hedgehogs” when it came to predicting the future. Their brains were better able to take the time to synthesize the various data inputs required to deal with the complexity of crystal balling the future because they weren’t barrelling down a pre-ordained path that had been carved by years of accumulated expertise.

But it’s not just expertise that creates these ruts in our brains. The same pattern plays out when we look at the impact of our beliefs play in how open-minded we are. The stronger the belief, the deeper the rut.

Again, we have to remember that this tendency of our brains to form well-travelled grooves over time has been crafted by the blind watchmaker of evolution. But that doesn’t make it any less troubling when we think about the limitations it imposes in a more complex world. This is especially true when new technologies deliberately leverage our vulnerability in this area. Digital platforms ruthlessly eliminate the real estate that lies between perspectives. The ideological landscape in which foxes can effectively operate is disappearing. Increasingly we grasp for expertise – whether it’s on the right or left of any particular topic – with the goal of preserving our own mental ruts.

And as the ruts get deeper, foxes are becoming an endangered species.

Why Quitting Facebook is Easier Said than Done

Not too long ago, I was listening to an interview with a privacy expert about… you guessed it, Facebook. The gist of the interview was that Facebook can’t be trusted with our personal data, as it has proven time and again.

But when asked if she would quit Facebook completely because of this — as tech columnist Walt Mossberg did — the expert said something interesting: “I can’t really afford to give up Facebook completely. For me, being able to quit Facebook is a position of privilege.”

Wow!  There is a lot living in that statement. It means Facebook is fundamental to most of our lives — it’s an essential service. But it also means that we don’t trust it — at all.  Which puts Facebook in the same category as banks, cable companies and every level of government.

Facebook — in many minds anyway – became an essential service because of Metcalfe’s Law, which states that the effect of a network is proportional to the square of the number of connected users of the system. More users = exponentially more value. Facebook has Metcalfe’s Law nailed. It has almost two and a half billion users.

But it’s more than just sheer numbers. It’s the nature of engagement. Thanks to a premeditated addictiveness in Facebook’s design, its users are regular users. Of those 2.5 billion users, 1.6 billion log in daily. 1.1 billion log in daily from their mobile device. That means that 15% of all the people in the world are constantly — addictively– connected to Facebook.

And that’s why Facebook appears to be essential. If we need to connect to people, Facebook is the most obvious way to do it. If we have a business, we need Facebook to let our potential customers know what we’re doing. If we belong to a group or organization, we need Facebook to stay in touch with other members. If we are social beasts at all, we need Facebook to keep our social network from fraying away.

We don’t trust Facebook — but we do need it.

Or do we? After all, we homo sapiens have managed to survive for 99.9925% of our collective existence without Facebook. And there is mounting research that indicates  going cold turkey on Facebook is great for your own mental health. But like all things that are good for you, quitting Facebook can be a real pain in the ass.

Last year, New York Times tech writer Brian Chen decided to ditch Facebook. This is a guy who is fully conversant in tech — and even he found making the break is much easier said than done. Facebook, in its malevolent brilliance, has erected some significant barriers to exit for its users if they do try to make a break for it.

This is especially true if you have fallen into the convenient trap of using Facebook’s social sign-in on sites rather than juggling multiple passwords and user IDs. If you’re up for the challenge, Chen has put together a 6-step guide to making a clean break of it.

But what if you happen to use Facebook for advertising? You’ve essentially sold your soul to Zuckerberg. Reading through Chen’s guide, I’ve decided that it’s just easier to go into the Witness Protection Program. Even there, Facebook will still be tracking me.

By the way, after six months without Facebook, Chen did a follow-up on how his life had changed. The short answer is: not much, but what did change was for the better. His family didn’t collapse. His friends didn’t desert him. He still managed to have a social life. He spent a lot less on spontaneous online purchases. And he read more books.

The biggest outcome was that advertisers “gave up on stalking” him. Without a steady stream of personal data from Facebook, Instagram thought he was a woman.

Whether you’re able to swear off Facebook completely or not, I wonder what the continuing meltdown of trust in Facebook will do for its usage patterns. As in most things digital, young people seem to have intuitively stumbled on the best way to use Facebook. Use it if you must to connect to people when you need to (in their case, grandmothers and great-aunts) — but for heaven’s sake, don’t post anything even faintly personal. Never afford Facebook’s AI the briefest glimpse into your soul. No personal affirmations, no confessionals, no motivational posts and — for the love of all that is democratic — nothing political.

Oh, one more thing. Keep your damned finger off of the like button, unless it’s for your cousin Shermy’s 55th birthday celebration in Zihuatanejo.

Even then, maybe it’s time to pick up the phone and call the ol’ Shermeister. It’s been too long.

The Tourification of Our World

Who wouldn’t want to be in Venice? Gondolas drift by with Italian gondoliers singing “O Sole Mio.” You sit at a café savoring your espresso as you watch Latin lovers stroll by hand in hand on their way to the Bridge of Sighs. The Piazza San Marco is bathed in a golden glow as the sun sets behind the Basilica di San Marco. The picture? Perfect.  

Again, who wouldn’t want to live in Venice?

The answer, according to the latest population stats, is almost everyone. The population of Venice is one third what it was in 1970.

The sharp-eyed among you may have noticed that I changed the sentence slightly in the second version. I replaced “be” with “live.”  And that’s the difference. Venice is literally the “nice place to visit but I wouldn’t want to live there.”  

A lot of people do visit, well over 5 million a year. But almost nobody lives there. The permanent population of Venice has shrunk to below 60,000.

Venice has become tourified. It’s a false front of a city, one built for those who are going to be there for 48 to 72 hours. In the process, everything needed to make it sustainable for those who want to call it home has been stripped out. It has become addicted to tourist dollars — and that addiction is killing it.

We should learn from Venice’s example. Sometimes, in trying to make a fantasy real, you take away the very things needed to let it survive.

Perfection doesn’t exist in nature. Imperfections are required for robustness. Yet, we are increasingly looking for a picture of perfection we can escape to.

The unintended consequences of this are troubling to think about.

We spent a good part of the last century devising new ways to escape. What was once an activity that lived well apart from our real lives has become increasingly more entwined with those lives.

As our collective affluence has grown, we spend more and more time chasing the fantastical. Social media has accelerated this chase. Our feeds are full of posts from those in pursuit of a fantasy.

We have shifted our focus from the place we live to the “nice place to visit.” This distorts our expectations of what reality should be. We expect the tourist-brochure version of Venice without realizing that in constructing exactly that, we set in motion a chain of events resulting in a city that’s unlivable.

The rise of populist politics is the broken-mirror image of this. Many of us have mythologized the America we want — or Britain, or any of the other countries that have gone down the populist path.. And myths are, by definition, unsustainable in the real world. They are vastly oversimplified pictures that allow us to create a story that we long for. It’s  the same as the picture I painted of Venice in the first paragraph: a fantasy that can’t survive reality.

In our tendency to “tourify” everything, there are at least two unintended consequences: one for ourselves and one for our world.

For us, the need to escape continually draws our energies and attentions from what we need to do to save the world we actually live in, toward the mythologization of the world we think we want to live in. We ignore the inconvenient truths of reality as we pursue our imagined perfection.

But it’s the second outcome that’s probably more troubling. Even if we were successful in building the world we think we want, we could well find that built a bigger version of Venice, a place sinking under the weight of its own fantasy.

Sometimes, you have to be careful what you wish for.