Category Archives: Consumer Psychology

Macro-Economics and Macro-Emotions

Another interesting article I ran into while cleaning out my inbox. Biometric monitoring research firm Innerscope tracked people’s emotions through vests that capture heartrates and other signals of emotional engagement while they were watching Super Bowl Ads. The objective: to see which ads got the biggest response from people. The results were interesting. The winners were Career Builder and Cash4Gold.

People are scared poopless by the economy and it’s impacting the ads we pay attention and react to. I’ve written before on the macro-emotional trends that dictate everything from the stores we shop at to the searches we launch. And now, it’s even edged in on the Super Bowl. What is interesting is that this is a self perpetuating trend. The economic news scares us, we spend less, the economy gets worse because no one is spending, the news gets worse… well, you get the idea.

Also saw CITI Analyst  Mark Mahaney at Covario’s InflectionPoint Summit in San Diego, who gave us an update on macro economic trends. The short version is..more bad news. He did have a silver lining for search marketers though, which lines up with what we’ve been seeing. Budgets from other channels are migrating into search. Mark gave us a quick and admitedly non scientific calculation of the categories most at risk, Yellow Pages, Print and TV, showed a total potential of $120 billion up for grabs. Of course, total migration is ridiculous. Search doesn’t work unless something is creating awareness, which creates search inventory. But still, that’s $120 B in ad budget that’s going to be scrutinized pretty carefully over the next year or two. It does make you think how much of that might leak into search.

Along the same lines, just got a preliminary glimpse at the SEMPO State of the Search Market Preliminary results. What we’re seeing seems to support Mark’s theory. Can’t go into specifics right now, but if you’re at SMX in Santa Clara next week we’ll be sharing some preliminary findings. I think I’m scheduled on Day One for that session. Drop by if you have a chance.

Chasing Digital Fluff – Who Cares about What’s Hot?

Marketers are falling over themselves in their rush to the digital landscape. Social media is SO hot! But not as hot as behavioral targeting. And if you think that’s hot, wait till you see what you can do with mobile!

The Digital Dogpile

blow-dandelionMarketers desperately scramble over each other, grasping for a tenuous handhold on some emerging tactic that gives them, however briefly, a fraction of an inch advantage over the competition. New digital marketing directors prove their worth through their savvy of online technology. They cut their teeth on Facebook advertising and put Powerpoints (or, because they’re uber-cool – Keynote presentations) together on the immense potential of the social graph.

Churn is the norm in digital marketing. And marketers are the worst, whipping the industry into a froth because they get all breathless about the latest thing. My inbox gets a hundred emails every single day talking about how freaking cool everything is and how we’re stumbling to figure out the importance of everything. If you’re not an early adopter…scratch that…if you’re not a bleeding edge pioneer, you’re a hopeless loser. The pace of marketing testing and adoptions just keeps spinning faster and faster.

Step Away from the iPhone

Stop! Take a breath. Relax for a few minutes. Get outside and breath some honest to God fresh air. And don’t take your iPhone with you. Because here’s the scoop Kemosabe, all the technology in the world is useless until your audience figures out how to use it. And here’s the nasty little secret. Humans love bright shiny objects but we’re pretty slow when it comes to figuring out how to jam it into our already busy lives. Until that happens, your nifty online strategies will never be anymore than a pointless treadmill jammed on overdrive. You can run as fast as you want, but you’ll never get anywhere.

I do financial analyst calls every quarter and the last question on the call is always the same: anything else we should be looking at? Apparently, technologiosis (or technitis, or technophilia, take your pick) is contagious. My answer is usually the same..wait till people figure out how to use it.

Think about the buzz that’s been devoted to social networks and, more recently, real time search, in the last 2 years. That’s 2 years of foaming-at-the-mouth marketing buzz about how this channel is:

A) the savior of marketing
B) most effective connection with consumers
C) coolest technology without an identifiable purpose
D) biggest waste of time on God’s green earth
E) all of the above

The Geekiest Guy on my Block

Now, I’ll be the first to admit I don’t have a clue how to use social media in a meaningful way in my life. I have a Facebook page, I tweet, I have a Linked In profile, a Trip-It network, just to name a few, making me the geekiest guy I know. Maybe not at an online marketing show, but if you ever visit Kelowna, take a walk with me down my block and I’ll prove my techno-geek status is several Trekkie parsecs ahead of anyone else. I suspect the same is true for you. And you know what? I have no frigging idea why Facebook is important or why I should log into my profile today. It’s cool, but it’s not useful in an every day kind of way. And if I, who spend over 10 hours a day online and have a network of friends and colleagues that span the globe, can’t jam Facebook into my life in a useful way, how is the average techno-pleb going to?

As far as I can see, most of things marketers salivate over fall into the same category..digital candy that tweaks our dopamine supplying pleasure centre but serves no real, sustainable purpose in our lives. This puts it in the same category as 95% of my iPhone apps, 99% of the computer games on my laptop and the Wii my nephew got last Christmas – an obsession for approximately 27 hours, an occasional pastime for another 36 hours, then something we ignore for the rest of our lives.

The one difference, at least in my experience, seems to be teenagers. Most of things that seem to be passing fancies to us do seem to become useful in the lives of the average 15 – 23 year old. But, as I said in a previous post, when you look at what the live of a high school or university student looks like and what they want to do, a Facebook suddenly makes sense. For me, not so much.

An Eyeball is an Eyeball, Right?

So, even given this notorious degree of fickleness, why should marketer’s care? Eyeballs are still eyeballs, right? Even if the eyeballs we’re capturing this week will be completely different than the eyeballs we capture next week. This approach only works if you consider your market a faceless blob of unleashed consumer potential. If you actually want to get relevant messages to real people with real needs, the logic starts to break down immediately.

Effective marketing depends on reliable targeting. And reliable targeting depends on established patterns. And established patterns depend on sustained behaviors. And sustained behaviors depend on things we find useful. Otherwise, we’re marketing via fad, condemning ourselves to spending our professional lives and our client’s ad dollars chasing fluff in a hurricane. Our audience will always be “just passing through” on the way to the next thing.

I Miss Frank Cannon, PI

movies_070708_cannonMarkets have to stabilize in order for us to understand the individuals that make up that market. Also, brand relationships need a stable environment, allowing them to germinate and flourish.

When I was a kid, Kraft always sponsored Cannon. When you tuned in to see William Conrad somehow roll his fat old carcass out of his Lincoln Continental and pick off a sniper 3 miles away on a mountain top with his trusty .38 revolver, you could depend on Kraft telling you how to cook Mac & Cheese in every commercial break. Much as the entertainment value may have sucked (beggars with 2 channels in the Canadian prairies can’t be choosers) you knew Kraft would be there and Kraft knew who they were talking to. The audience had stabilized.

Until things pass through the temporary obsession phase to something that adds real value to our lives, we can’t consider advertising on these channels as anything more than an experiment. The trick in picking the right digital channels is not to look at the eyeballs they’re attracting today, but in how these things might be used in real, practical ways. That will give you an idea of how real people might be using these things next week or next month, when the technoratti have moved on to the latest bright shiny object.

Fear, Greed and the Google Parallax View

First published December 18, 2008 in Mediapost’s Search Insider

Greed is right.

Greed works.

Greed clarifies, cuts through, and captures the essence of the evolutionary spirit.

Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind.

— Gordon Gekko, “Wall Street”

Yesterday, I listened to an interview with Canadian businessman Stephen Jarislowsky. Jarislowsky is one of Canada’s richest men, our version of Warren Buffet. And he said something simple but profoundly important in the interview: Greed is strong, but fear is stronger.

Gekko is right. Greed does drive us. It is evolutionary. It’s hardwired into us. Harvard professors Nitin Nohria and Paul Lawrence identified the drive to acquire as one of the four primary drives of humans But as Abraham Maslow pointed out, there is a hierarchy of human needs and drives, and fear will always trump greed.

Our society has been defined by greed but I don’t agree that greed is right. It forces a zero-sum mentality, which, due to the blessings of fate, has resulted in a inequitable division of resources for us here in North America. The world’s possessions are seriously out of balance, and there is no way to redistribute without severe pain for those that currently have the possessions. Bill Clinton has been warning us about this for years, and it’s now beginning to happen. That is the pain we’re just beginning to feel, and we’re afraid. So, our evolutionary transmission has geared down into the first gear of survival: fear.

The interesting thing about this, from our own little slice of the world, is that we see our collective human consciousness captured in the query logs of Google. As we switch from greed to fear, we see search volumes reflect that. That’s why, in the past year, we’ve seen number of searches for “recession” catch and surpass the number of searches for “mortgages.” We’ve gone from dreaming about acquiring to worrying about defending, and whatever we’re thinking about, we search for.

This is a powerful demonstration of the power of search. It shows just how accurate a barometer it is of our collective mood. And mood determines reality. Our emotions are the jet fuel of our drives. They are our internal guidance systems that keep us on track to realize our goals. Our emotions, in aggregate, swing the economy, and the nation with it, from boom to bust. And there’s no better indicator of that then the searches we do on Google. John Battelle had it right. Google is the database of our intentions.

There has been endless speculation about whether search will weather the financial crisis. The question is really not worth asking. The fact that search has so accurately reflected the shift of our confidence shows how essential it is. Yes, people will use it less to search for things to buy and use it more to search for ways to survive, which will impact advertising revenues and cause pain (and hence, fear). But it is what it is. The search patterns show who we are and what’s on our mind.

But there will also be an interesting side effect that search marketers will have to adjust for. Kevin Lee called it aspirational searches. Just because we go into defend mode doesn’t mean we stop dreaming. Greed can be pushed out of the driver’s seat temporarily by fear, but soon we start planning our escape. Fantasy is a favorite activity of ours. Look at the boom of the movie industry through the depths of the Great Depression. Even though we can’t afford a new car or a trip to Mexico, we can still pretend that we can, and this ersatz consumer activity will also show up on Google’s query logs, causing much head-scratching about the sudden drop in conversions.

We’ll adapt to the new reality and we’ll survive. That’s why fear exists. It allows us to marshall our resources and focus on the threat. And eventually, greed will once again turn on the tap. The balance between these two forces has been swinging back and forth for hundreds of thousands of years. But never before have we had such a clear view of how it happens, thanks to search.

P.S. Just realized, because of the way the holidays stack up on the calendar, that this is my last column for 2008. It’s been a true pleasure spending each Thursday with you talking about search, branding, the brain and anything else that crossed my mind. Thank you for listening (and responding). I look forward to picking up the conversation again in 2009!

The Elusive Goal of Ad Engagement

First published October 16, 2008 in Mediapost’s Search Insider

Last week, I talked about the nature of engagement and the neural mechanisms that underlie it. This week, I want to explore why those same mechanisms dictate that our search interactions are going to be completely different from engagement with a TV ad or a billboard.

The key thing to understand here is how we’re driven by goals. In a drastic oversimplification, goals are the objectives that drive our information processing modules, more commonly known as our brain. Our “mind” and all that we know about ourselves are shifting patterns of information being processed in these modules. At multiple levels, we sift through data, make decisions and initiate actions to get us closer to our goals.

Goal Interrupted

Most advertising is interruptive. It’s a detour on the road to our goals. The holy grail of direct marketing is to time delivery of the message so that it coincides with our pursuit of a goal. If you can get a realtor brochure to my doorstep at exactly the time I’m thinking of putting my house up for sale, you’ve substantially increased the odds of active engagement with your advertising message. But despite the advances in targeting methods, the odds of perfect coincidence are frustratingly slim. So advertising has to depend on other methods, like emotion, to trigger primal reactions and force suspension of current goal pursuit to engage with the message.

One of the comments on last week’s column, by fellow Search Insider Kaila Colbin, provides a perfect example of this. Kaila provided a link to a particularly powerful use of emotion in a TV ad from New Zealand Post. Now, despite the powerful emotional appeal, in a typical stream of ads inserted in a commercial block in network programming, the ad would still need to batter our way into our consciousness. With Kaila it succeeded once, hitting all the right emotional cues, and so her subconscious has been primed to respond to this ad should it appear on the radar screen of her constant scanning of her environment. In Kaila’s case, she would rush to the TV to change the channel, preventing her from dissolving into a messy puddle of tears.

Active Engagement

But by drawing our attention to the link, Kaila set up a totally different nature of engagement. She embedded the concept in our working memory by allowing us to create a goal around the viewing of the ad. We were engaged with the concept on a totally different level. Watching the ad was the goal, so no diversion of attention was required. We were primed to pay attention by Kaila’s recommendation. This is the power of ads that go viral in social networks, like Dove’s Evolution.

This concept of attention is at the center of two targeting tactics that have proven effective in the online environment: behavioral and contextual targeting.

Engaging Tactics

With behavioral targeting, we track behavioral cues through clickstreams, hoping that it will improve our odds of presenting our advertising message at exactly the right time to coincide with our target’s pursuit of a goal. The well-timed presentation of an ad for Chinese hotel rooms at almost the same time I was planning a trip to China was an example I’ve talked about before. Because planning for the trip had recently occupied my working memory and presumably I hadn’t yet reached my goal (the trip wasn’t completely planned yet), this message stood a pretty good chance of being engaged with (despite the fact that it creeped me out a little).

Contextual targeting employs a different but related strategy. If advertising messages are about the same topics as the content that I’m engaging with, transference of that engagement should be easier than with unrelated topics. Indeed, at Enquiro we’ve found that engagement with these ads actually occurs at two levels. There’s the initial awareness of the ad and the subsequent decision to engage with the ad. We’ve found that awareness is often higher with non-contextually targeted ads, but engagement and recall is higher with contextual ads. I have my theories about why this is so (having to do with the nature of the creative and the interplay of active consciousness and selective perception) but that could fill up an entire column in itself.

Engaging Search

Finally, we have search. In my previous examples of online targeting, we’re still using our best guess about optimum timing based on some pretty broad assumptions: click streams provide an accurate measure of intent, and interest in content means interest in related advertising messages. These targeting methods simply improve the odds in what is still essentially an interruption in the pursuit of a goal. But use of search is inherently aligned with goal pursuit. Information gathering is a key subtask in the pursuit of many goals, and search is an important tool in our information foraging arsenal. The goal is firmly embedded in our working memory and we’re on high alert for cues relevant to our end goal. This is why information scent in search results is so critical. No diversion of attention is required. Our attention is firmly focused on the results presented on the search page (both paid and algorithmic), because we believe that one of those results will take us one step closer to the goal.

This concept of active engagement is key to understanding search’s role in branding. Next week, I’ll look at how our cognitive mechanisms digest the results on a search page.

Questioning the Power of the Influencer

First published October 2, 2008 in Mediapost’s Search Insider

Word of mouth is powerful in marketing. In the last two weeks, we’ve seen how the opinions of others can cause us to change our own beliefs to match. We’ve also seen how the speed at which the word spreads is a function not only of the structure of the network itself, but also the value of the message and its impact on the people in the network, as well as how much they stand to gain (or lose) by spreading the word.

Influencers: Our Connection to Opinion?

In the world of marketing, one of the most cherished concepts has been the idea of an influencer or opinion leader, the super-connected individual who acts as a hub in an information cascade, rapidly disseminating the idea to many. According to this theory, most of us (90%) play relatively passive roles in information cascades, meekly accepting the opinions of these influencers and following the herd. Katz and Lazarsfeld introduced the two-step influencer model in the middle of the last century, showing how media first influences these influencers, or opinion leaders, who then act as a conduit and “infection agent” for the greater population.

It’s Not the Influencer, It’s Our Willingness to be Influenced

For the past 6 decades, marketers have allocated a lot of effort in reaching these influencers, assuming that once you capture the influencers, you capture the entire market. The assumption was that information cascades depended on these influential hubs. Malcolm Gladwell’s “TheTipping Point” brought this phenomenon to popular attention.

In the past few years, a number of researchers, including Duncan Watts from Columbia University, have questioned the impact of influencers on information cascades. They’ve created several network models which have shown that in most cases, ordinary individuals are all that’s required to trigger a word-of-mouth cascade. We are not merely sheep following the herd. We are all influencers in our own right, but only when we feel strongly about something. The necessary ingredient is not a hyper-connected influencer or super trend-setter, but rather a group of people willing to be influenced.

Passion by Word of Mouth

Which brings us to Mel Gibson’s “The Passion of the Christ.” When promoting the film, Gibson knew the most receptive audience would be church-goers. So he arranged for private screenings and the distribution of free tickets in churches throughout North America. We had Watts’ ideal model, a low variance network (similar levels of influence) that shared a vulnerability to influence, given the nature of the message. Word spread quickly before the launch of the movie (which also resulted in a firestorm of controversy), making “The Passion of the Christ” one of the most successful movies of 2004.

This example also leads us to a possible error in analysis of information cascades that has perpetuated the “influencer” theory. It’s relatively easy, when looking in hindsight, to make the assumption that if a cascade happened, the individuals at the beginning of the cascade had to be unique in their ability to influence others. A proponent of the Influentials Theory could look at the example of “The Passion of the Christ” and say that it was the pastors and ministers of the selected screening churches that acted as the influencers, spreading the word to their congregations.

But Watts’ theory offers an alternate explanation. The everyday, commonly connected members of the audience were willing to be influenced, and once captured by the message, went and spread it within their other social groups. It was the willingness to be influenced that was the critical factor. To use the analogy provided by Watts in his paper, assuming some unique level of influence by the catalysts of a cascade is like assuming that the first trees to burn in a forest fire are somehow able to spread flames farther than other trees. Often, the fact that the tree was combustible in the first place is overlooked.

Starting a Brand Fire

So, when we talk about brand, what makes a tree ready to catch on fire? Here we have another important insight from Watts’ work. Too many marketers make the assumption that influencers are the critical component of success. Proctor and Gamble has made influencer marketing a cornerstone of its strategy. But the fact is, if “The Passion of the Christ” was an unremarkable movie that audiences couldn’t connect with, all the influencers in the world wouldn’t have caused the word to spread. It was a powerful message connecting with an audience primed to accept it.

Watts’ models show that the success of a cascade depends on the vulnerability to influence. If that is present, ordinary individuals can cause the word to spread as far and just as quickly as hyper-connected influencers. And the vulnerability to be influenced, the “combustibility” of the audience, depends on many factors, perhaps the most important of which is the back story of the brand.

The Combustible iPhone

Look at what has been one of the most successful cascades of recent times: the Apple iPhone. The iPhone is a tremendously combustible product. It’s not technology mavens causing the word to spread (although they do have influence. Watts is quick to point out that they have impact, but it may not as disproportionally large as everyone believes), it’s the person sitting next to you on the plane who says she loves it. And we’re receptive to that message because we have that magic connection of brand (Apple makes cool products) and a remarkable product. We’re ready to be set on fire.

I’ve spent the last few columns detailing the aspects of word of mouth because they have a tremendous impact on brand and how we create our own brand beliefs. And it’s these brand beliefs that are triggered when we interact with search results. Next week, we return to more familiar territory and see how this interaction plays out.

Branding by Word of Mouth

First published September 18, 2008 in Mediapost’s Search Insider

In the past few weeks, I’ve looked at where our feelings towards brands come from and how they get stored in our brains for future recall. I’ve looked at how powerful brand beliefs can be, even to the point of altering our physical sensations (the Coke blind taste test), how advertising can mix with our own personal experiences to create false memories, how emotions can build a powerful subconscious reaction to a brand and how we label complex concepts, including brands, with a summary label that reduces all we know about a brand to an easily accessible impression. Today, I’ll round out the building of brand belief with perhaps the most powerful influence of all: the opinion of others.

Social by Nature

We are social creatures. One of the reasons humans have flourished on earth is because we take advantage of the power of groups. We have built extremely sophisticated heuristic rules to help us know when to trust and when to be wary. In our past, human survival depended on the passing of information from those we trusted and ignoring information from less trustworthy sources. While the survival value of word of mouth might not be as critical to us now (unless knowing a good Chinese restaurant or mechanic is a matter of life and death) those evolutionary mechanisms are still in place, and every piece of information we receive has to be filtered through them.

Remember, heuristic rules, which we know as our gut instincts, tend to form when the same circumstances produce the same results in the majority of cases. Given this stable pattern, we create a subconscious mechanism that allows us to act without thinking. A huge percentage of human behavior falls into this category (I explored one example, habits, previously in this column). The same is true for how we treat word of mouth information. Let me give you two examples.

Whom Can You Trust?

First, the closer someone is to us, the more we tend to trust their opinion. The word of family or close friends tends to carry a lot more weight than that of a stranger. That’s because friends and family have proven their worth in the past and gained our trust. They haven’t steered us wrong before, so why should they now? Secondly, the more enthusiastic the endorsement, the more value we give it. If we get a wishy-washy recommendation, we probably won’t run right out and take action. But if someone close to us is ecstatically recommending a Thai restaurant, the odds are we’ll try it ourselves in the near future. Enthusiastic endorsement shows that the initial impression was strong and memorable because it was emotionally tagged, making it more believable to us. Incidentally, it probably isn’t coincidence that many personal recommendations tend to revolve around eating. Sharing information about promising food patches would have been a key survival strategy for our ancestors.

Gut-Level Judgments

When we get presented with information from others, it’s not as though we pass the information through a number of rational filters. Calculations like the two examples are done below the surface. At a gut level, we instantaneously affix credibility to word of mouth and decide whether to pay attention or not. But if we do pay attention, this becomes a tremendously powerful consumer motivator. It’s no coincidence that word of mouth typically tops the list as the key influencer in every marketing study ever done. Word of mouth fits our inherent survival strategies. We are programmed to prioritize information from trusted others as being important.

Your Word Over Mine

In fact, in many cases the opinion of others may trump even our own experience with brands. Studies have shown that we alter our own memories of a consumer experience depending on the opinion of others. If we’re recalling a less than positive experience but at the time of recall we’re surrounded by others who have more positive opinions, we’ll alter our own opinions to better match the collective one. The same is true in reverse. A great brand experience suddenly loses some of its shine if others are vocal about their bad experiences.

In this altering of our own opinion, one has to remember an interesting principle about memory formation. Memories are not unalterable snapshots. They get reformed every time they get retrieved and then laid down again. So, if we retrieve a personal experience with a brand from our memory, then alter it to fit the opinions of others, it’s the altered memory that gets recoded. We don’t suddenly revert to our previous opinion when others aren’t around anymore. Our perception of the brand has been altered by others from this point forward. This helps explain why others have such a powerful influence on our brand loyalties.

Next week, I’ll look at an interesting study that explored how word of mouth spreads in a network, whether it’s online or in the real world.

False Memories: Was that Bugs Bunny or Just My Imagination?

First published September 11, 2008 inn Mediapost’s Search Insider

I’ve talked about how powerful our mental brand beliefs can be, even to the point of altering the physical taste of Coke. But where do these brand beliefs come from? How do they get embedded in the first place?

A Place for Every Memory, and Every Memory in its Place

Some of the most interesting studies that have been done recently have been done in the area of false memories. It appears that we have different memory “modules,” optimized for certain kinds of memory. We have declarative memory, where we store facts. We can call these memories back under conscious will and discuss them. Then we have implicit memory, or procedural memory, that helps us with our day-to-day tasks without conscious intervention. Remembering how to tie your shoes or which keys to hit on a keyboard are procedural memories

Declarative memory is further divided into semantic and episodic memory. In theory, semantic memory is where we store meaning, understandings and concept-based knowledge. It’s our database of tags and relationships that help us make sense of the real world. Episodic memory is our storehouse of personal experiences. But the division between the two is not always so clear or water-tight.

The Making of a Brand Memory

Let’s look at our building of a brand belief. We have personal experiences with a brand, either good or bad, that should be stored in episodic memory. Then we have our understandings of the brand, based on information provided, that should build a representation of that brand in semantic memory. This is where advertising’s influence should be stored.

But the divisions are not perfect. Some things slip from one bucket to the other. Many of our inherent evolutionary mechanisms were not built to handle some of the complexities of modern life. For instance, the emotional onslaught of modern advertising might slip over from semantic to episodic memory. There will also be impacts that reside at the implicit rather than the explicit level. Memory is not a neatly divided storage container. Rather, it’s like grabbing a bunch of ingredients out of various cupboards and throwing them together into a soup pot. It can be difficult knowing what came from where when it’s all mixed together.

This is what happens with false memories. Often, they’re external stories or information that we internalize, creating an imaginary happening that we mistakenly believe is an episode from our lives. Advertising has the power to plant images in our mind that get mixed up with our personal experiences, becoming part of our brand belief. These memories are all the more powerful because we swear they actually happened to us.

That Wascally Wabbit!

University of Washington researcher Elizabeth Loftus and her research partner Jacquie Pickrell have done hundreds of studies on the creation of false memories. In one, under the guise of evaluating a bogus advertising campaign, they showed participants a picture of Bugs Bunny in front of Disneyland, and then had them do other tasks. Later in the study, the participants were asked to remember a trip to Disneyland. Thirty percent of them remembered shaking Bugs Bunny’s hand when they visited the Magic Kingdom, which would be a neat trick, considering that Bugs is a Warner’s character and would not be welcome on Disney turf.

We all tend to elaborate on our personal experiences to make them more interesting. We “sharpen” our stories, downplaying the trivial and embellishing (and sometimes completely fabricating) the key points to impress others. When we do this, we will draw from any sources handy, including things we’ve seen or heard in the past that we’ve never personally experienced. To go back to last week’s Coke example, our fond memories of Coke might just as likely come from a Madison Avenue copywriter as from our own childhood. We idealize and color in the details so our conversations can be more interesting. It goes back to the human need to curry social favor by gossiping. When you have this natural human tendency fueled by billions of dollars of advertising, it’s often difficult to know where our lives end and our fantasies take over.

This mix of personal experience and implanted images explains part of where our brand beliefs come from. Next week, I’ll look at the power of word of mouth and the opinions of others.

There’s More to Coke’s Brand than Taste

First published September 4, 2008 in Mediapost’s Search Insider

Last week, I looked at the unprecedented backlash against the introduction of New Coke. The fervor of the protest took everyone by surprise, especially flabbergasted Coke executives (and truth be told, Pepsi brass as well). After all, New Coke was subjected to exhaustive consumer testing in the lab, and the results were clear: most people preferred the taste. So why did something that did so well in the lab fail so miserably in the real world? Why were people so passionate about brown, sugared water? Baylor University neuroscientist Read Montague set out to find out why in 2003.

More than a Blink

In his book “Blink,” Malcolm Gladwell advanced his theory of why Coke drinkers are so loyal to their brand, yet failed to pick it in a blind taste test. The problem, Gladwell says, is in the nature of the test. Coke is meant to be drunk in big gulps, not metered little sips common in taste tests. It’s only when you down a whole can that you can truly appreciate the distinctive biting tang of Coke. But, as Montague would find out, the reason for the irrational devotion to Coke has little to do with taste at all and much more to do with beliefs, emotions and memories. It’s our brains that love Coke, not our taste buds.

Montague and his research partners started with a common blind taste test, where after stating their preferences, study participants were given sips of Pepsi and Coke without knowing what they were drinking and asked to pick the drink they preferred. The results were all over the place. Coke drinkers chose Pepsi. Pepsi drinkers chose Coke. Going into the study, the groups split evenly based on their stated cola preferences and in picking their favorite drink, Coke fared slightly better than Pepsi, but there was little correlation between what people said they preferred and what they actually chose. Their tastes buds were not that finely tuned.

Mind over Matter

It’s only in the last few years that we’ve discovered just how powerful our mind is in altering our physical perception of the world. The world is what we judge it to be, and judgment is largely passed by mechanisms beyond our conscious awareness. This explains the “placebo” effect, noticeable changes in our physical being due to the power of suggestion alone. If our minds believe, our bodies follow.

In Montague’s (along with his co-authors, McClure, Li, Tomlin, Cypert & Montague ) study, the truly interesting findings came when people were put inside the MRI scanners. Remember, fMRI scanners (functional magnetic resonance imaging) allows us to see which parts of the brain are activated during specific tasks, giving us some clue as to what’s happening inside our minds. After devising a rather elaborate method to feed participants sips of Coke or Pepsi, preceded by visual cues of what they were drinking (the methodology description took up a good portion of the published paper and is worth reading just to see the lengths one has to go to if you’re intent on conducting fMRI research) the researchers analyzed differences in brain activity.

The Brain on Coke

In one group, they provided two sips, one of Pepsi, the other also of Pepsi, but in an anonymous presentation with participants being told that the second sip could be either Coke or Pepsi. In the second group, the same thing was done, but this time it was Coke that was both the identified and anonymous drink. Then participants were asked to state their preference. In the Pepsi group, about half the group chose Pepsi and there was no strong preference over the anonymous drink (also Pepsi). But in the Coke group, the respondents overwhelmingly chose Coke over the mystery cola (also Coke).

When Montague examined the difference in brain activity, the difference between the two groups was fascinating. When the identity of the cola wasn’t known, the only brain activity registering was in the Ventromedial Prefrontal Cortex, an area associated with feelings of reward. When participants were told they were drinking Pepsi, the brain activity didn’t change significantly. But when the third group was informed they were drinking Coke, suddenly other areas of the brain started lighting up, including the hippocampus, parahippocampus, midbrain, dorsolateral prefrontal cortex, thalamus and the left visual cortex. What was happening? Well, Coke was obviously eliciting a much strong mental response than Pepsi. People were experiencing Coke at two levels: first, the sensory reward, and secondly, by tapping into people’s beliefs and feeling of self-identify. The parts of the brain that lit up under the conscious awareness of Coke are suspected to control access to emotion and act as gatekeepers to working memory. The brand belief structure of Coke was being mentally loaded up and altering the perception of Coke’s taste. The effect was so strong yet so far below the level of consciousness, brand loyalists swore they could identify Coke’s taste and preferred it, even though blind taste tests consistently proved them wrong.

Coke’s Brain Branding

Somehow, Coke has created a brand that its fans believe in and identify with. The brand unlocks a treasure trove of brand reinforcements that have little to do with the taste or quality of the product. And it was this effect that Coke turned its back on in the introduction of New Coke in 1985. It’s this untapping of brand beliefs we have to keep in mind when we talk about branding and search. With search interactions, the appearance of a brand can unlock belief structures just as strong as Coke’s. In the next column, I’ll explore some of the many elements that go into the building of these beliefs.

For Coke, Brand Love is Blind

First published August 28, 2008 in Mediapost’s Search Insider

In 2003, Read Montague had a “why” question that was nagging at him. If Pepsi was chosen by the  majority of people in a blind taste test, why did Coke have the lion’s share of the cola market? It didn’t make sense. If Pepsi tasted better, why wasn’t it the market leader?

Fortunately, Read wasn’t just any cola consumer idly pondering the mysteries of brown sugared water. He had at his disposal a rather innovative methodology to explore his “why” question. Dr. Read Montague was the director of Baylor University’s Neuroimaging Lab and he just happened to have a spare multi-million dollar MRI machine kicking around. MRI machines allow us to see which parts of the brain “light up” when we undertake certain activities. Although fMRI scanning’s roots are in medicine, lately the technology has been applied with much fanfare to the world of market research.  Montague is one of the pioneer’s of this area, due in part to the 2003 Coke /Pepsi study, which went but the deceptively uninteresting title, “Neural Correlates of Behavioral Preference for Culturally Familiar Drinks” (Note: Montague has since picked up a knack for catchier titles. His recent book is  “Why Choose this Book? How We Make Decisions” ).

Believing in Brands

In my last two columns, I talked about how our emotions and beliefs are inseparably wrapped up in many brand relationships. The strongest brands evoke a visceral response, beyond the reach of reason, coloring our entire engagement and relationship with them. It doesn’t matter if these brands are better than their competitors. The important thing is that we believe they are better, and these beliefs are reinforced by emotional cues.

This certainly seemed to be the case with Coke and Pepsi. The market split was beyond reason. In fact, the irrationality of the market split caused Coca Cola to make the biggest marketing blunder in history in 1985. A brief recap of marketing history is in order here, because it highlights one of the challenges with market research: namely, that there’s a huge gulf of difference between what we say and what we do, thanks to the mysterious depths of our sub-cortical mind. It also sheds light on the strength of our brand beliefs.

Coke’s Crisis

Through the ’70s and ’80s, Coke’s market share lead over Pepsi was eroding to the point when, in the mid ’80s, Coke’s lead was only a few points over their rivals. This was due in no small part to the success of the Pepsi Challenge advertising campaign, where the majority of cola drinkers indicated they preferred the taste of Pepsi in blind taste tests. This wasn’t just a marketing ploy. Coke did their own blind taste tests and the results were the same. If people didn’t know what they were drinking, they preferred Pepsi. It was panic time in Atlanta.

Enter new Coke. It was a lighter, sweeter drink that was possibly the most thoroughly tested consumer product in history. Coke was preparing to kill the golden goose, and it wasn’t a decision they were taking lightly. If they were changing the secret recipe, they were making damned sure they were right before they rolled it out to market. So they tested, and tested, and tested again Coke meticulously did their home work, according to all the standard market research metrics. The results were consistent and overwhelming. In the tests, people loved New Coke. Not only did it blow the original Coke formulation away, it also trounced Pepsi. They asked people if they liked New Coke. Yes! Would you buy New Coke. Yes! Would this become your new favorite soft drink? Yes, Yes and Yes! Feeling exceptionally confident, Coke bit the bullet and rolled out New Coke. And the results, as they say, are now history.

Classic Coke’s Comeback

On April 23, 1985, Coke shocked the world by announcing the new formulation and ceasing production on the original formula. And, at first, it appeared the move was a success. In many markets, people bought new Coke at the same levels they had bought original Coke. They kept saying they preferred the taste. But there was one critical market that new Coke had to win over, and that wasn’t going to be easy. In the Southeast, the home of Coke, people weren’t so easy to convince. There, ardent Coke fans were mounting a counteroffensive. By May, the “Old Coke” backlash had spread to other parts of the U.S. and was picking up steam. Soon, a “black Coke” market emerged when deprived Coke drinkers started bring in the original Coke from overseas markets where the old formulation was still being bottled. By July, the Old Coke counteroffensive was so strong, the company capitulated and reintroduced the original formulation as Coke Classic. Within months, Coke Classic was outselling both New Coke and Pepsi and began racking up the highest sales increases for Coke in decades, rebuilding Coke’s lead in the market.

Although it eventually worked out in their favor, Coke executives were puzzled by the whole episode. President Don Keough admitted in a press conference, “There is a twist to this story which will please every humanist and will probably keep Harvard professors puzzled for years, The simple fact is that all the time and money and skill poured into consumer research on the new Coca-Cola could not measure or reveal the deep and abiding emotional attachment to original Coca-Cola felt by so many people.”

Keough was amazingly prescient in this statement, although he had the university wrong. Almost two decades later, it would be a professor at Baylor, not Harvard, that would dig further into the puzzle. Next column, we’ll see what one of the very first neuromarketing studies uncovered when Montague replicated the Pepsi Challenge in an fMRI machine.

The Human Hardware Series on Search Engine Land

I must say I’m having fun writing the Human Hardware series on Search Engine Land. What I wanted to do is take some of the inherent behaviors and cognitive limits of humans and explore how this impacts our online interactions. And yes, to me, that’s fun!

If, like me, you’re interested in the “why” of things, I think you might enjoy this series. I’ve written 3 installments so far:

Human Hardware: Working Memory

How we use our working memory to make decisions, the capacity limits of working memory, and how working memory and long term memory work together. I take a look at Herbert Simon’s work on bounded rationality and satisficing as a shortcut to making decisions.  I also explore Daniel Wegner’s theory of transactive memory in this column. Finally, I look at how working memory dictates how we digest search results.

Human Hardware: Men and Women

Humans come in two models: men and women. Despite rampant political correctness, there are distinct differences between us (in case you hadn’t noticed). This column looks at some of the cognitive and neurological differences (I tried to keep my comparisons from the neck up) and how it impacts things like shopping, navigating and asking directions, understanding conversations and spending time online. I spend some time outlining gender research differences we’ve seen in past usability studies.

Human Hardware: Dunbar’s Number

In part One of this two part installment, I pose this question: Do we have limits on how many friends we can make? Robin Dunbar, a British anthropologist, believes the answer is yes, and that number is 150, give or take a few. I look at Dunbar’s research and reasoning, and how this limit has impacted human evolution and our creation of social networks. I touch on the evolution of language, the Great Leap in human evolution (why we went from throwing rocks to creating art in what was relatively the blink of an eye) and the importance of grooming as a social glue.

I’m pretty pumped about this series, as it ties directly into my book research, so this has been a way to work out a few of the ideas. To be honest, I have no idea how many installments there will be in the series. Along a similar vein, and in case you missed it, you might enjoy the Google Habit series that ran on MediaPost and earlier in this blog. Just check the archives.