Category Archives: Consumer Psychology

Whom Would You Trust: A Human or an Algorithm?

First published October 31, 2013 in Mediapost’s Search Insider

I’vmindrobote been struggling with a dilemma.

Almost a year ago, I wrote a column asking if Big Data would replace strategy. That started a several-month journey for me, when I’ve been looking for a more informed answer to that query. It’s a massively important question that’s playing out in many arenas today, including medicine, education, government and, of course, finance.

In marketing, we’re well into the era of big data. Of course, it’s not just data we’re talking about. We’re talking about algorithms that use that data to make automated decisions and take action. Some time ago, MediaPost’s Steve Smith introduced us to a company called Persado, that takes an algorithmic approach to copy testing and optimization. As an ex-copywriter turned performance marketer I wasn’t sure how I felt about that. I understand the science of continuous testing but I have an emotional stake in the art of crafting an effective message. And therein lies the dilemma. Our comfort with algorithms seems to depend on the context in which we’re encountering them and the degree of automation involved.

Let me give you an example, from Ian Ayre’s book “Super Crunchers.” There’s a company called Epagogix that uses an algorithm to predict the box-office appeal of unproduced movie scripts. Producers can retain the service to help them decide which projects to fund. Epagogix will also help producers optimize their chosen scripts to improve box-office performance. The question here is, do we want an algorithm controlling the creative output of the movie industry? Would we be comfortable take humans out of the loop completely and see where the algorithm eventually takes us?

Now, you may counter that we could include feedback from audience responses. We could use social signals to continually improve the algorithm, a collaborative filtering approach that uses the power of Big Data to guide the film industry’s creative process. Humans are still in the loop in this approach, but only as an aggregated sounding board. We have removed the essentially human elements of creativity, emotion and intuition. Even with the most robust system imaginable, are you comfortable with us humans taking our hands off the wheel?

Here’s another example from Ayre’s book. There is substantial empirical evidence that shows algorithms are better at diagnosing medical conditions than clinical practitioners. In a 1989 study by Dawes, Faust and Meehl, a diagnosis algorithmic rule set was consistently more reliable than actual clinical doctors. They then tried a combination, where doctors were made aware of the outcomes of the algorithm but were the final judges. Again, doctors would have been better off going with the results of the algorithm. Their second-guessing increased their margin of error significantly.

But, even knowing this, would you be willing to rely completely on an automated algorithm the next time you need medical attention? What if there was no doctor involved at all, and you were diagnosed and treated by an algo-driven robot?

There is also mounting (albeit highly controversial) evidence showing that direct instruction produces better learning outcomes that traditional exploratory teaching methods. In direct instruction, scripted automatons could easily replace the teacher’s role. Test scores could provide self-optimizing feedback loops. Learning could be driven by algorithms and delivered at a distance. Classrooms, along with teachers, could disappear completely. Is this a school you’d sign your kid up for?

Let’s stoke the fires of this dilemma a little. In a frightening TED talk, Kevin Slavin talks about how algorithms rule the world and offers a few examples of how algorithms have gotten it wrong in the past. The pricing algorithms of Amazon priced an out-of-print book called “The Making of a Fly” at a whopping $23.6 million dollars. Surprisingly, there were no sales. And in financial markets, where we’ve largely abdicated control to algorithms, those same algorithms spun out of control in 2012 no fewer than 18,000 times. So far, these instances have been identified and corrected in milliseconds, but there’s always a Black Swan chance that one time, they’ll crash the economy just for the hell of it.

But should we humans feel too smug, let’s remember this sobering fact: 20% of all fatal diseases were misdiagnosed. In fact, misdiagnosis accounts for about one-third of all medical error. And we humans have no one but ourselves to blame but for that.

As I said – it’s a dilemma.

What Does Being “Online” Mean?

plugged-inFirst published October 24, 2013 in Mediapost’s Search Insider

If readers’ responses to my few columns about Google’s Glass can be considered a representative sample (which, for many reasons, it can’t, but let’s put that aside for the moment), it appears we’re circling the concept warily. There’s good reason for this. Privacy concerns aside, we’re breaking virgin territory here that may shift what it means to be online.

Up until now, the concept of online had a lot in common with our understanding of physical travel and acquisition. As Peter Pirolli and Stuart Card discovered, our virtual travels tapped into our evolved strategies for hunting and gathering. The analogy, which holds up in most instances, is that we traveled to a destination. We “went” online, to “go” to a website, where we “got” information. It was, in our minds, much like a virtual shopping trip. Our vehicle just happened to be whatever piece of technology we were using to navigate the virtual landscape of “online.”

As long as we framed our online experiences in this way, we had the comfort of knowing we were somewhat separate from whatever “online” was. Yes, it was morphing faster than we could keep up with, but it was under our control, subject to our intent. We chose when we stepped from our real lives into our virtual ones, and the boundaries between the two were fairly distinct.

There’s a certain peace of mind in this. We don’t mind the idea of online as long as it’s a resource subject to our whims. Ultimately, it’s been our choice whether we “go” online or not, just as it’s our choice to “go” to the grocery store, or the library, or our cousin’s wedding. The sphere of our lives, as defined by our consciousness, and the sphere of “online” only intersected when we decided to open the door.

As I said last week, even the act of “going” online required a number of deliberate steps on our part. We had to choose a connected device, frame our intent and set a navigation path (often through a search engine). Each of these steps reinforced our sense that we were at the wheel in this particular journey. Consider it our security blanket against a technological loss of control.

But, as our technology becomes more intimate, whether it’s Google Glass, wearable devices or implanted chips, being “online” will cease to be about “going” and will become more about “being.”  As our interface with the virtual world becomes less deliberate, the paradigm becomes less about navigating a space that’s under our control and more about being an activated node in a vast network.

Being “online” will mean being “plugged in.” The lines between “online” and “ourselves” will become blurred, perhaps invisible, as technology moves at the speed of unconscious thought. We won’t be rationally choosing destinations, applications or devices. We won’t be keying in commands or queries. We won’t even be clicking on links. All the comforting steps that currently reinforce our sense of movement through a virtual space at our pace and according to our intent will fade away. Just as a light bulb doesn’t “go” to electricity, we won’t “go” online.  We will just be plugged in.

Now, I’m not suggesting a Matrix-like loss of control. I really don’t believe we’ll become feed sacs plugged into the mother of all networks. What I am suggesting is a switch from a rather slow, deliberate interface that operates at the speed of conscious thought to a much faster interface that taps into the speed of our subconscious cognitive processing. The impulses that will control the gateway of information, communication and functionality will still come from us, but it will be operating below the threshold of our conscious awareness. The Internet will be constantly reading our minds and serving up stuff before we even “know” we want it.

That may seem like neurological semantics, but it’s a vital point to consider. Humans have been struggling for centuries with the idea that we may not be as rational as we think we are. Unless you’re a neuroscientist, psychologist or philosopher, you may not have spent a lot of time pondering the nature of consciousness, but whether we actively think about it or not, it does provide a mental underpinning to our concept of who we are.  We need to believe that we’re in constant control of our circumstances.

The newly emerging definition of what it means to be “online” may force us to explore the nature of our control at a level many of us may not be comfortable with.

Bounded Rationality in a World of Information

First published October 11, 2013 in Mediapost’s Search Insider.  

Humans are not good data crunchers. In fact, we pretty much suck at it. There are variations to this rule, of course. We all fall somewhere on a bell curve when it comes to our sheer rational processing power. But, in general, we would all fall to the far left of even an underpowered laptop.

Herbert Simon

Herbert Simon

Herbert Simon recognized this more than a half century ago, when he coined the term “bounded rationality.”  In a nutshell, we can only process so much information before we become overloaded, when we fall back on much more human approaches, typically known as emotion and gut instinct.

Even when we think we’re being rational, logic-driven beings, our decision frameworks are built on the foundations of emotion and intuition. This is not bad. Intuition tends to be a masterful way to synthesize inputs quickly and efficiently, allowing us generally to make remarkably good decisions with a minimum of deliberation. Emotion acts to amplify this process, inserting caution where required and accelerating when necessary. Add to this the finely honed pattern recognition instincts we humans have, and it turns out the cogs of our evolutionary machinery work pretty well, allowing us to adequately function in very demanding, often overwhelming environments.

We’re pretty efficient; we’re just not that rational. There is a limit to how much information we can “crunch.”

So when information explodes around us, it raises a question – if we’re not very good at processing data, what happen when we’re inundated with the stuff? Yes, Google is doing its part by helpfully “organizing the world’s information,” allowing us to narrow down our search to the most relevant sources, but still, how much time are we willing to devote to wading through mounds of data? It’s as if we were all born to be dancers, and now we’re stuck being insurance actuaries. Unlike Heisenberg (sorry, couldn’t resist the “Breaking Bad” reference) – we don’t like it, we’re not very good at it, and it doesn’t make us feel alive.

To make things worse, we feel guilty if we don’t use the data. Now, thanks to the Web, we know it’s there. It used to be much easier to feign ignorance and trust our guts. There are few excuses now. For every decision we have to make, we know that there is information which, carefully analyzed, should lead us to a rational, logical conclusion. Or, we could just throw a dart and then go grab a beer. Life is too short as it is.

When Simon coined the term “bounded rationality,” he knew that the “bounds” were not just the limits on the information available but also the limits of our own cognitive processing power and the limits on our available time. Even if you removed the boundaries on the information available (as is now happening) those limits to cognition and time would remain.

I suspect we humans are developing the ability to fool ourselves that we are highly rational. For the decisions that count, we do the research, but often we filter that information through a very irrational web of biases, beliefs and emotions. We cherry-pick information that confirms our views, ignore contradictory data and blunder our way to what we believe is an informed decision.

But, even if we are stuck with the same brain and the same limitations, I have to admit that the explosion of available information has moved us all a couple of notches to the right on Simon’s “satisficing” curve. We may not crunch all the information available, but we are crunching more than we used to, simply because it’s available.  I guess this is a good thing, even if we’re a little delusional about our own logical abilities.

Google Glass and the Sixth Dimension of Diffusion

First published August 29, 2013 in Mediapost’s Search Insider

Tech stock analyst and blogger Henry Blodget has declared Google Glass dead on arrival. I’m not going to spend any time talking about whether or not I agree with Mr. Blodget (for the record, I do – Google Glass isn’t an adoptable product as it sits – and I don’t – wearable technology is the next great paradigm shifter) but rather dig into the reason that he feels Google Glasses are stillborn.

They make you look stupid.

The input for Google Glass is your voice, which means you have to walk around saying things like, “Glass, take a video” or “Glass, what is the temperature?” The fact is, to use Google Glass, you either have to accept the fact that you’ll look like a moron or the biggest jerk in the world. Either way, the vast majority of us aren’t ready to step into that particular spotlight.

Last week, I talked about Everett Rogers’ Diffusion of Technology and shared five variables that determine the rate of adoption. There is actually an additional factor that Rogers also mentioned: “the status-conferring aspects of innovations emerged as the sixth dimension predicting rate of adoption.”

If you look at Roger’s Diffusion curve, you’ll find the segmentation of the adoption population is as follows: Innovators (2.5% of the population), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%)  and Laggards (16%).  But there’s another breed that probably hides out somewhere between Innovators and Early Adopters. I call them the PAs (for Pompous Asses). They love gadgets, they love spending way too much for gadgets, and they love being seen in public sporting gadgets that scream “PA.” Previously, they were the ones seen guffawing loudly into Bluetooth headsets while sitting next to you on an airplane, carrying on their conversation long after the flight attendant told them to wrap it up. Today, they’d be the ones wearing Google Glass.

 

This sixth dimension is critical to consider when the balance between the other five is still a little out of whack. Essentially, the first dimension, Relative Advantage, has to overcome the friction of #2, Compatibility, and #3, Complexity (#4, Trialability, and #5, Observability, are more factors of the actual mechanics of diffusion, rather then individual decision criteria). If the advantage of an innovation does not outweigh its complexity or compatibility, it will probably die somewhere on the far left slopes of Rogers’ bell curve. The deciding factor will be the Sixth Dimension.

This is the territory that Google Glass currently finds itself in. While I have no doubt that the advantages of wearable technology (as determined by the user) will eventually far outweigh the corresponding “friction” of adoption, we’re not there yet. And so Google Glass depends on the Sixth Dimension. Does adoption make you look innovative, securely balanced on the leading edge? Or does it make you look like a dork? Does it confer social status or strip it away? After the initial buzz about Glass, social opinion seems to be falling into the second camp.

This brings us to another important factor to consider when trying to cash in on a social adoption wave: timing. Google is falling into the classic Microsoft trap of playing its hand too soon through beta release. New is cool among the early adopter set, which makes timing critical. If you can get strategic distribution and build up required critical mass fast enough, you can lessen the “pariah” factor. It’s one thing to be among a select clique of technological PAs, but you don’t want to be the only idiot in the room. Right now, with only 8,000 pairs distributed, if you’re wearing a pair, you’re probably the one that everyone else is whispering about.

Of course, you might not be able to hear them over the sound of your own voice, as you stand in front of the mirror and ask Google Glass to “take a picture.”

 

The Open and Shut Mind

First published June 13, 2013 in Mediapost’s Search Insider

A few years ago I was invited to a conference on advertising at a major university. The attendees were a fairly illustrious group of advertising professionals, including several senior executives from major agencies. There was also a healthy sprinkling of academics with impeccable credentials. I was in privileged company.

The organizer of the conference asked me to come up with a “dinner topic.” She explained that she wanted to generate a lively discussion at the various tables as we dug in and broke bread. It was okay if it was a “little” controversial. I must have ignored the qualifier, because my suggestion was, “Is advertising evil?” I have never been one for half measures.

As the ad illuminati settled at their tables, I set the stage by providing two opposing points of view:

First, the positive side of advertising. It can be a way to touch the very core of what makes us human, sometimes moving us to greatness. It can unify communities, create bonds and motivate us en masse. Not only can it be a social “lubricant” but, at its best, advertising can be a powerful change agent as well.

Now, the “evil” side: Does advertising take all this power and fritter it away to drive pure avarice?  Does it short-circuit our Darwinian behavioral wiring, chaining us to a hedonistic treadmill where we constantly want something we don’t have? Regular readers will detect a theme here.

It wasn’t difficult to read the mood of the room as I was wrapping up. My dad has a saying that, despite its off-color nature, sums up the atmosphere of this particular gathering better than anything else I can think of: “It went over like a fart in the house of worship.” I cautiously headed back to my table to take part in the planned “lively discussion.”

My tablemates didn’t know where to start. It seemed that it had never crossed their mind that advertising could be anything but the highest of callings. To have a debate, you need to at least have an abstract understanding of the opposing viewpoint, even if you don’t agree with it. At my table the most common question was, “What do you mean, ‘Is advertising evil?’” I had apparently introduced an entirely foreign concept.

I swallowed and forged ahead, sketching out the basis of my hypothesis. I tried to stay in the abstract, hoping to generate a philosophical debate and avoid getting caught in an emotional catfight. It seemed, though, that I had not only hit a hot button, but had taken a sledgehammer and smashed it to smithereens. Advertisers, at least based on this particular sample, seemed unwilling to discuss the philosophical pros and cons (or at least the cons) of their profession. I just wanted the whole evening to end as soon as possible.

My purpose here is not to reopen the debate. I use this story to illustrate an unfortunate human tendency. We live in a world of grays, but we like to think in black and white. I doubt that advertising is totally evil, but I also doubt that advertising is totally good. The truth lies between the two extremes; advertising is most likely a rather dirty gray.  If we’re willing to consider alternatives to our beliefs, perhaps it will move us a little closer to reality. I think advertising would do nothing but benefit from a deeper evaluation of its moral standing.

But we often forego a search for the truth, content to stick with our beliefs, which often bear little resemblance to reality. If those beliefs are attacked, we defend them vociferously, turning a deaf ear to counter-arguments. We don’t listen, because open minds require the burning of a lot of energy.

In a simpler evolutionary environment, beliefs were a heuristic shortcut for survival.  But today, they often polarize us at either end of a moral spectrum, with no middle ground left for discussion. Case in point, the current American political landscape.

I have spent most of my adult life trying to fight this natural tendency. I have tried to keep an open mind and not let my beliefs blind me to an opposing viewpoint — at least, not when it comes to those things I believe to be truly important. Morality, religion and politics are just three arenas where open minds are much harder to find than staunchly held beliefs.

And, apparently, you can add advertising to that list as well.

The Stress of Hyper-Success

Last week, I talked about the inflation of expectations. In that case, it was the vendors we deal with that were the victims of that inflation. But we don’t only have inflated expectations about others. Increasingly, we measure ourselves against our own expectations. And that is leading us down a dangerous path.

The problem is that success is a relative thing. We can only judge it by looking at others. This creates a problem, because increasingly, we’re looking at extreme outliers as our baseline for expectations.

Take social media, for instance. Women feel more stressed than satisfied after spending time on Pinterest, according to a recent survey. “Pinterest stress” is the official label for feelings of inadequacy in trying to measure up against the unrealistic examples of domestic perfection shared on the female-dominated social network.

But it’s not just women and Pinterest. One-third of Facebook users feel worse after visiting the site. Why? Because we feel envious after going through the pictures of someone else’s dream vacation. Social media invites comparison. We try to measure ourselves up to the achievements of others in our social circle. There are two problems with that: we are naturally jealous of our neighbors, and our neighbors tend to lie (or at least embellish) when they post of their own accomplishments.

Added to this is the unnatural effect of the Power Law curve. Not all online posts about accomplishments are equally popular. We tend to focus on those that are outstanding — those that are set apart from the average. These online examples, representing the extreme upper limits of success and achievement, take their place at the head of the Power Law curve, drawing a dramatically bigger audience. We ignore the commonplace, which lives somewhere in the Long Tail. Our own quest for the remarkable (humans never gossip about average, everyday topics) leads us to focus on the unrealistic.

So the more access we have to the achievements of others, the more skewed our idea of success becomes. What we don’t realize, however, is that we’re measuring ourselves against the very highest percentile of the human population.

Take salaries, for example. What would be a yearly amount that would make you happy? Economists Angus Deaton and Daniel Kahnemann asked that very question — and it turns out that $75,000 a year is the magic number. Below that number, the day-to-day stress of just getting by leads to chronic unhappiness. But above that number, people seem to feel more fulfilled and are generally in a more positive frame of mind. But after you get past that general threshold for happiness, more money doesn’t seem to always equate to increased happiness. Millionaires and billionaires are not that much happier than the rest of us.

Yet if I asked you how much you wanted to make, I suspect the number would be higher than $75,000. And I doubt that it would have much to do with happiness. It would be because we know of people making more than us — much more. We have no idea if those high wage earners are happy or not, but we do know they pull down a much bigger paycheck than we do. So we believe we should aspire to that standard, whether it’s realistic or not, in the mistaken belief that it will make us happier. It won’t, by the way. We humans are notoriously bad at forecasting our own happiness.

This is one of those strange Darwinian detours that evolution has saddled us with. In our original adaptive environment, doing better than our neighbors was a pretty sure bet for superior gene propagation. We’re hardwired to not just be envious but to strive to compete. That made sense when our target was the person we were competing against for food, shelter or sexual access.  It doesn’t make sense when our competition is a far removed, sometimes fictitious ideal propagated by the media and the viral force of social sharing.

Somewhere, a resetting of expectations is required before we self-destruct because of hyper competitiveness in trying to reach an unreachable goal. To end on a gratuitous pop culture quote, courtesy of Sheryl Crow: “It’s not having what you want, It’s wanting what you got.”

The Straw that Broke the Market’s Back

First published May 9, 2013 in Mediapost’s Search Insider

Customers are fickle — and I suspect they’re getting more fickle.  Perhaps they’re even feeling a little entitled.A recent survey shows that customers tend to bail on a company not because of a big time screw-up, but because of the accumulation of a lot of little annoyances. Soon, their frustration reaches a tipping point and they look elsewhere.

It would be easy to point the finger at the companies and demand that they get their collective acts together. But I suspect there’s more at play here. It would be my guess that customers are getting harder to please.  And I would further guess that the Web is largely to blame. I think it comes down to a constant rise in our collective expectations, while the reality of our experiences fall behind.

The balance between our expectations and the actual experience determines our loyalty to any course of action. If we have low expectations and a poor experience, we aren’t really surprised, which dampens our subsequent disappointment and leaves us more willing to forgive and forget.  If we have low expectations but a good experience, we’re pleasantly surprised, making us more apt to return. If we have high expectations and a good experience, we get a double hit of happiness. First, we enjoy the anticipation, then we appreciate that the experience actually lives up to our expectations. For a vendor, the scariest scenario is the last of the four: high expectations but a poor experience. In this case, we walk away disappointed and frustrated.

Now, balancing expectations and experience wouldn’t be that difficult for any moderately competent company if those expectations were realistic. But I suspect that more and more of us are entering into our respective experiences with unrealistic expectations. We’re setting our vendors up to fail.

Expectations are set partly based on our past experiences, but they’re also set by the experiences of others. We create our expectation set points based, in part, on what we hear from others.

The Web has created an open, accessible market of experiences and hearsay. We hear about the bad, a feedback loop that increasingly is calling out poor customer service. But we also hear about the good.  Correction – we hear about the exceptional. The “good” is not remarkable. It generally falls within our expectations and so goes without comment. But either the very good or the very bad is exceptional, and we are more apt to comment on it online. Not only do we comment, we also embellish, accentuating the plusses and minuses to make it a better story. Therefore, what we hear from others sets either a very low or very high bar. We steer clear of the low bars, but the high bars stick with us, contributing to the setting of future expectations.

The other thing the Web has done is create expectations that overlap domains.  Previously, when our expectations were set based on our own experiences, they tended to stay domain-specific. We had an expectation of what it would be like to buy a car, stay at a hotel, eat at a restaurant or purchase a new pair of shoes. With the Web, cross-pollination between domains is increasingly common. A head marketer for a well-known industrial manufacturer once said to me, “When it comes to online experience, my competitors are not the traditional ones. I’m competing against Amazon and eBay. That type of experience is what people expect.”

This “nudging up” of expectations is done without much rational consideration. We don’t care much for the reality of operational logistics in any particular domain. We just want our expectations to be met, no matter where those expectations might come from. And when they’re not, we pull the plug on that particular vendor, assuming another vendor can do better in meeting our inflated expectations. The Web has also engendered a virulent “grass is always greener” view of the world. We know a competitor is just a click away (whether or not that vendor is any better than the incumbent).

I’ll be the first to call out a bad customer experience, but when it comes to the increasing fickleness of customers, we should remember that there are two sides to this particular story.

Anchoring and Search

First published in Mediapost’s Search Insider – April 25, 2013

A few columns back, I talked about psychological priming and how it could play out in a search environment. In today’s column, I’d like to talk about a related concept: value anchoring.

Given almost every product category, with the exception of those things we buy very frequently (in my case, chocolate bars, beer and books), we don’t really know what the current going price would be. Either we don’t buy them frequently enough, or the price is subject to market volatility. We may have a rough idea of prices, but we need to adjust this price estimate to the current market conditions.

We need a pricing framework because, as consumers, we need to establish in our own minds what a “fair” price would be. This concept of fairness taps into some pretty deep emotional triggers — ones that vendors should be aware of. I’ll explain in a minute how these concepts of fairness can play out in a typical purchase journey.

Remember, our determination of what price is fair is totally arbitrary. It’s not as if we know objectively what the “fair” price for a carton of eggs, a big-screen TV, or a hotel room in San Francisco is. We make these pricing decisions based on comparisons to available information. And it just so happens that the first piece of information that is available to us tends to play a significantly bigger role than any of the subsequent information that we may come upon. That first price we’re exposed to anchors our heuristic comparisons and tends to linger in our subconscious, triggering emotions that drive our perceptions of fairness.

If we have to adjust our pricing expectations upwards, because the first price baseline is too low, we feel frustrated and taken advantage of.  Our brain’s warning signals go off and we suddenly feel anxious and go on the defensive. Our mood takes a turn for the worst.

If, on the other hand, we are able to adjust our pricing expectations downward because we’re finding prices substantially lower than the first price encountered, we’re almost euphoric. The reward center of our brain is telling us we’re getting a great deal and the resulting dopamine hit gives us a buying high.

Once again, these feelings are based on nothing more than us grasping at the first number we see, and then judging all subsequent pricing information against it. But the fact that this is nothing more than a gut call is exactly the point; its lack of rationality does nothing to diminish its emotional punch.

Now, let’s look at how this might play out in search. Remember, there’s a pretty good likelihood that many consumer journeys may start with a search engine. It’s also likely that many search advertisers might advertise the lowest price possible in order to capture the click. Given this, it wouldn’t be surprising to see that the initial benchmark price could be a very low one. There’s nothing wrong with this, as long as the prices the buyer will eventually pay will land in the same ballpark.

But, as is often the case, if prices start rising quickly because of the inevitable “fine print” exclusions, conditions and lack of availability, the advertiser is going to trigger all the wrong emotional reactions in the prospect. Rather than “hooking” them by dangling an unobtainable low price as bait, they instead unleash a wave of negative emotions. Even if they end up still capturing the sale (due to the competition not being able to beat the inflated price) they will not be engendering any brand “love.”

This is yet another example of focusing on the end result without thinking about the journey. If we become myopically focused on conversion rates, for example, to the exclusion of all else, we might be ignorant of the long-term brand damage we might be causing by capturing those clicks through a digital version of the classic bait-and-switch con.

Read more: http://www.mediapost.com/publications/article/198937/anchoring-and-search.html#ixzz2SdvLkwGB

Psychological Priming and the Path to Purchase

First published March 27, 2013 in Mediapost’s Search Insider

In marketing, I suspect we pay too much attention to the destination, and not enough to the journey. We don’t take into account the cumulative effect of the dozens of subconscious cues we encounter on the path to our ultimate purchase. We certainly don’t understand the subtle changes of direction that can result from these cues.

Search is a perfect example of this.

As search marketers, we believe that our goal is to drive a prospect to a landing page. Some of us worry about the conversion rates once a prospect gets to the landing page. But almost none of us think about the frame of mind of prospects once they reach the landing page.

“Frame” is the appropriate metaphor here, because the entire interaction will play out inside this frame. It will impact all the subsequent “downstream” behaviors. The power of priming should not be taken likely.

Here’s just one example of how priming can wield significant unconscious power over our thoughts and actions. Participants primed by exposure to a stereotypical representation of a “professor” did better on a knowledge test than those primed with a representation of a “supermodel.”

A simple exposure to a word can do the trick. It can frame an entire consumer decision path. So, if many of those paths start with a search engine, consider the influence that a simple search listing may have.

We could be primed by the position of a listing (higher listings = higher quality alternatives).  We could be primed (either negatively or positively) by an organization that dominates the listing real estate. We could be primed by words in the listing. We could be primed by an image. A lot can happen on that seemingly innocuous results page.

Of course, the results page is just one potential “priming” platform. Priming could happen on the landing page, a third-party site or the website itself. Every single touch point, whether we’re consciously interacting with it or not, has the potential to frame, or even sidetrack, our decision process.

If the path to purchase is littered with all these potential landmines (or, to take a more positive approach, “opportunities to persuade”), how do we use this knowledge to become better marketers? This does not fall into the typical purview of the average search marketer.

Personally, I’m a big fan of the qualitative approach (I know — big surprise) in helping to lay down the most persuasive path possible. Actually talking to customers, observing them as they navigate typical online paths in a usability testing session, and creating some robust scenarios to use in your own walk-throughs will yield far better results than quantitative number-crunching. Excel is not a particularly good at being empathetic.

Jakob Nielsen has said that online, branding is all about experience, not exposure. As search marketers, it’s our responsibility to ensure that we’re creating the most positive experience possible, as our prospects make their way to the final purchase.

The devil, as always, is in the details — whether we’re paying conscious attention to them or not.

Weighing Positive and Negative Impacts on Users

First published January 31, 2013 in Mediapost’s Search Insider

We humans hate loss. In fact, we seem to value losing something about twice as high as gaining something. For example, imagine I gave you a coffee cup and then offered to buy it back from you. That’s scenario 1. In scenario 2, I ask you to buy the same coffee cup from me. The price you assign to the coffee cup in the first scenario will be, on the average, about twice as much as in the second. And yes, there’s research to back this up.

When it comes to winning and losing, it’s been proven that “loss looms larger than gains.” It’s just one of the weird glitches in our logical circuitry.  We tend to be hardwired to look at glasses as half empty.

Recently, I was reviewing an academic study done in 2008, with this scintillating title: “Procedural Priming and Consumer Judgment: Effects on the Impact of Positively and Negatively Valenced Information” by Shen and Wyer. If you can get beyond the rather dry title, you find a treasure trove of tidbits to consider when crafting your online user experience.

For example, when we evaluate a product for potential purchase, we may run across both positive and negative information. The order we run into this information can have a dramatic impact on what we do downstream from that interaction. To use psychological terms, it “primes” our mental framework.  And, because we tend to focus on negatives, less favorable information has a greater impact on our decision than positive information.

But it’s not just that we pay more attention to bad news than good news. It’s that bad news can hijack the entire consideration process. According to Shen and Wyer, if we run into negative information, it can change our information-seeking strategies, leading us down further negatively biased channels to confirm the initial information we saw. Bad news tends to lead to more bad news.

Also, we can get “bad news” hangovers. If we compare negatives in one decision process, that negative mental framework can carry over to an entirely different decision that has nothing to do with the first, giving us a heightened awareness of negative information in the new situation.

Here’s another interesting finding. If we’re rushed for time, this preoccupation with the negatives will dramatically affect the decision we make. But, if we have all the time in the world, the impact is relatively insignificant. Given time, we seem to cancel out our inherently negative biases.

All this news is not bad for marketers, however. It seems that simply getting users to state their preference for one feature over another, even though they’re not actively considering purchase at that time, leads to a much greater likelihood of purchase in the future. It seems that if you can get users to compare alternatives — and, more importantly, to commit to saying they prefer one alternative over another — they clear the mental hurdle of deciding “will I buy?” and instead start considering  “what will I buy?”

Finally, there is also a recency effect, especially if prospects had ample time to consider all their alternatives. Shen and Wyer found that the last information considered seemed to have the greatest effect on the buyer.  So, if information was both positive and negative, it was good to get the least favorable information in front of the prospect early, and then move to the most favorable information. Again, this is true only if the user had plenty of time to weigh the options. If they were rushed, the opposite was true.

All in all, these are all intriguing concepts to consider when crafting an ideal online user experience. They also underscore the importance of first impressions, especially negative ones.