Category Archives: Online User Experience

Marketing in the ZMOT: An Interview with Jim Lecinski

First published July 21, 2011 in Mediapost’s Search Insider

A few columns back, I mentioned the new book from Google, “ZMOT, Winning the Zero Moment of Truth.” But, in true Google fashion, it isn’t really a book, at least, not in the traditional sense. It’s all digital, it’s free, and there’s even a multimedia app (a Vook) for the iPad.

Regardless of the “book” ‘s format, I recently caught up with its author, Jim Lecinski, and we had a chance to chat about the ZMOT concept. Jim started by explaining what the ZMOT is: “The traditional model of marketing is stimulus – you put out a great ad campaign to make people aware of your product, then you win the FMOT (a label coined by Procter and Gamble) — the moment of truth, the purchase point, the shelf. Then the target takes home the product and hopefully it will live up to its promises. It makes whites whiter, brights brighter, the package actually gets there by 10:30 the next morning.

What we came out with here in the book is this notion that there’s actually a fourth node in the model  of equal importance.  We gave the umbrella name to that new fourth moment that happens in between stimulus and shelf: if it’s prior to FMOT, one minus F is zero, ‘Zero Moment of Truth.'”

Google didn’t invent the ZMOT, just as Procter & Gamble didn’t invent the FMOT. These are just labels applied to consumer behaviours. But Google, and online in general, have had a profound effect on a consumer’s ability to interact in the Zero Moment of Truth.

Lecinski: “There were always elements of a zero moment of truth. It could happen via word of mouth. And in certain categories, of course  — washing machines, automotive, certain consumer electronics — the zero moment of truth was won or lost in print publications like Consumer Reports or Zagat restaurant guide or Mobil Travel Guide.

But those things had obvious limitations. One: there was friction — you had to actually get in the car and go to the library. The second is timeliness  — the last time they reviewed wash machines might have been nine months ago. And then the third is accuracy: ‘Well, the model that they reviewed nine months ago isn’t exactly the one I saw on the commercial last night that’s on sale this holiday weekend at Sears.'”

The friction, the timeliness and the simple lack of information all lead to an imbalance in the market place that was identified by economist George Akerlof in 1970 as information asymmetry. In most cases, the seller knew more about the product than the buyer. But the Web has driven out this imbalance in many product categories.

Lecinski: “The means are available to everybody to remove that sort of information asymmetry and move us into a post-Akerlof world of information symmetry. I was on the ad agency side for a long time, and we made the TV commercial assuming information asymmetry. We would say, ‘Ask your dealer to explain more about X, Y, and Z.’

Well, now that kind of a call to action in a TV commercial sounds almost silly, because you go into the dealer and there’s people with all the printouts and their smartphones and everything… So in many ways we are in a post-Akerlof world. Even his classic example of lemons for cars, well, I can be standing on the lot and pull up the CARFAX history report off my iPhone right there in the car lot.”

Lecinski also believes that our current cash flow issues drive more intense consumer research.  “Forty seven percent of U.S. households say that they cannot come up with $2,000 in a 30-day period without having to sell some possessions,” he says. “This is how paycheck to paycheck life is.”

When money is tight, we’re more careful with how we part with it. That means we spend more time in the ZMOT.

Next week, I’ll continue my conversation with Jim, touching on what the online ZMOT landscape looks like, the challenge ZMOT presents marketers and the seven suggestions Jim offers about how to win the Zero Moment of Truth.

The “Mikey” Mobile Adoption Test

First published July 14, 2011 in Mediapost’s Search Insider

The time to get serious about mobile is here. I say that not based on any analyst’s report, industry intelligence or pronouncement from any of the companies who have billions riding on it, but rather due to the “Mikey” test.

What, you ask, is the “Mikey” test? I thought you’d never ask.

My friend Mikey (and, yes, he lets me call him that and yet we’re still friends) is a building contractor. Recently, he oversaw the renovations on our home. We were a little concerned by the fact that in the middle of renovations, during a critical period when kitchen cabinets would be installed, old walls would be ripped down, new ones put up and our bathroom floor would be retiled, we would be 3,000 miles away on the most remote land mass in the world, Hawaii.

“It’s all good!” said Mikey (he says that a lot, which is another reason why we’re friends), “I’ll keep you up to date with this!” From his pocket, Mikey pulled out a brand-new iPhone. “I’ll just take pictures and send them to you!”

I was shocked. Mikey and I have a lot of things in common: love of family, appreciation for a good hand-crafted beer, dedication to a job well done, becoming reluctantly middle-aged — but technology is not on the list. His wife, Rosie, does his emailing for him. He was the last guy I expected to get an iPhone, let alone use it to send pictures via email. But sure enough, each day we’d get an update from Mikey, complete with fresh pictures of the progress.

But my biggest shock was still to come. When we returned, Mikey asked us to go to the Lennox website and print off the installation instructions for our gas fireplace insert. As I dropped by after work to drop off the print-outs, Mikey cornered me and said, “Tell me, if I had an iPad, could I look up this type of stuff online?” I would have been less surprised if the neighbor’s cat made me a martini. Mikey is a smart guy, but an early tech adopter he’s not.

For those of us in the biz, the benefits of mobile are obvious. We’ve been crowing about mobile being a game-changer for almost a decade now, but those messages never seemed to move beyond our little circle. But some time in the last year, something fundamental switched. During that time, the Mikeys of the world have suddenly become aware of how mobile might be applicable to them.

Just this past week I did a workshop for a company that makes sandpaper. Mikey is a customer of theirs. Keeping in mind the Mikey test, I decided to check and see what percentage of search queries for their key terms came from mobile devices. Obviously Mikey isn’t the only one who got himself an iPhone. Over 20% of searches for sandpaper and other terms came from mobile devices. And that percentage has more than doubled in the past year. These are numbers you have to pay attention to.

Why is the Mikey test important? There are a number of reasons why this marks a sea change in digital marketing. First of all, Mikey is only interested in mobile because it lets him do things that are important in his job. This isn’t about checking restaurant reviews, looking up show times or updating your Facebook status; this is about getting the job done. That sets a pretty stringent bar for user experience, one that most industrial marketers haven’t even considered. They’re still struggling to make their website a place that doesn’t cause mass user suicide.

Secondly, If Mikey is looking at mobile, we’ve already moved into the steepest part of the adoption curve. That means things are going to move very quickly. Moving quickly is not something that industrial marketers are very comfortable with. If we’re already at 20%, with a doubling in the past year, expect next year to be at 40 or 50%. That is a pace of change that is going to leave a lot of marketers behind.

It’s time to think seriously about mobile — but don’t do it because I told you to.

Do it because Mikey likes it.

The Vancouver Riot Social Media Backlash: Justice or Revenge?

First published June 23, 2011 in Mediapost’s Search Insider

In the 25 years I’ve lived here, I’ve never had to say this — indeed, I never believed I would ever say this — but last Wednesday, I was ashamed to say I live in British Columbia. I wasn’t the only one. I’m guessing the vast majority of the other 4.5 million people that call this Canadian province home felt the same way. In fact, the only people not feeling that way were the idiotic jerks that caused our collective shame. They were the ones using the Canuck’s loss to Boston in the Stanley Cup final as an excuse to wreak havoc on downtown Vancouver.

“You can’t cure stupid.”

We went into the night holding our collective breathe, hoping the sad scenario of the 1994 riot, after a similar Game 7 loss to the New York Rangers, would not repeat itself. The Olympics had given us hope that we could be placed on a world stage without burning it to the ground. But, as one police spokesperson said, “You can’t cure stupid!” Sadly, it proved to be true. B.C. is a breathtakingly beautiful corner of the world, but we definitely have our quota of stupid people, and last Wednesday, they all came onto the streets of Vancouver.

You’ve probably seen news footage of the riot and, if you were disgusted, I get it. I was too. But there’s another part of the story that also has to be told. To be honest, I’m not sure if it’s a happy ending or an even sadder one. I’d like to hear what you think, but bear with me for another minute or so.

Throw the Face”Book” at them

Even though it appeared that we had learned nothing in the 17 years since the last riot, there was one significant difference between 1994 and last week’s debacle. This year, it went viral. Much of the mayhem was captured by photo or video. Soon, it was posted online. And that’s when something surprising happened. For most of our history as social animals, there is not much we can do when some of our herd runs amok. There are reams of research on the psychology of mobs, but one of the common themes is a feeling of invincibility that comes from being part of a faceless, mindless crowd bent on destruction. Most times, there is no response or retribution for individual perpetrators of mob violence. They get off scot free. But not this time. The mob that trashed Vancouver may have been mindless, but they certainly weren’t faceless.

The next morning, a Facebook page was started by the Vancouver police. They asked anyone with photos or videos of criminals to post them for identification. Within a few hours, the page had captured over 50,000 “likes.” Within a few days, the police had over a million pictures and 1000 hours of video uploaded. As people were recognized, they were tagged so police could follow up with charges. The Insurance Corporation of BC offered police use of their facial detection software and crooner Michael Buble, who also hails from Vancouver, even launched a newspaper campaign asking for people to turn the guilty in through social media.

Social Justice or Virtual Vigilantes?

On hearing that, I felt that finally, justice was being served. We, the often-voiceless majority of law-abiding citizens, could do our part to right the wrongs. But, were we really interested in justice, or did we just want revenge? Is there any difference between the two? One blogger, Dave.ca, said “report the rioters out of civic duty..or revenge..either is fine.” Is it? If we are holding onto moral high ground, should we rally and become a virtual “lynch” mob? It’s brand-new territory to chart, and I’m personally unsure about which is the right path to take.

Let me give you one example. One of the rioters is a provincial water polo athlete and he was soon identified online. His name was made public. His father is a doctor. Since his son’s crime was made public, the father has had to suspend his practice and the family has had to move out of their home. Other exposed rioters have been subjected to violent threats and the comment strings are riddled with utterings that are in contention with the riot itself for sheer stupidity.

When I started this column, I was convinced it was going to be a bad news, good news story, where social media would play the role of the redeemer. As I did further research on the aftermath, it seems that it’s a bad news, good news, possibly worse news story.

Much as I’d like to think differently, I’m not sure mob rule, whether it’s pursuing mindless violence, or mindless revenge, can ever be a good thing. Social media has a way of exposing all that is human, at scale, and at velocity — warts and all. How do we handle this new accountability, this new immediate transparency into the dark things we’ve always kept tucked away?

We’re Looking in the Wrong Place for our Attribution Models

First published June 16, 2011 in Mediapost’s Search Insider

The online landscape is getting more complex. Speaking from a marketer’s perspective, there are more points of influence that can alter a buyer’s path. At the last Search Insider Summit, John Yi from Facebook introduced us to something he called Pinball Marketing. It’s an apt analogy for the new online reality.

Hoping for a Strike

In the past, marketing was like bowling. You would build a campaign with sufficient critical mass and aim it toward your target, hoping at the end of the campaign (or lane) your aim was good enough, and the ball/campaign had enough kinetic energy (measured in REACH X FREQUENCY X AD ENGAGEMENT) to knock down all the potential customers.  If you think about marketing in this perspective, it explains the massive amount of pain traditional marketers are feeling as they pull their bowling-shoe-clad feet from the old world and gingerly dip their toes in the new. The bowler was in control (theoretically) and the success or failure of the campaign lay in her hands alone. The paradigm was simple, clean and linear, just the way we marketers like it.

The new game of marketing is much more like pinball. The intersections between a buyer’s decision path and a product’s marketing presence are many, and each can send the buyer off in a different direction. Some of those intersection points are within the marketer’s control — and some aren’t. Marketers now have to try to understand engagement and buyer impact at each of these intersections and, in the process, try to piece together a map of the buyer’s journey, assigning value in the appropriate places.

Repealing Newton’s Law

But even though the frenetic path of a pinball gets us a little closer to today’s marketing reality, it still doesn’t get us all the way, because there’s one fundamental difference: pinballs don’t have brains. Nor do they have emotions, feelings, or needs. Pinballs are just little metal spheres that obey the laws of physics.

And therein lies the difference.  How much more challenging would pinball be if, rather than relying on Newtonian physics to set the path of a ball coming off a flipper, it could decide whether it wanted to go right, left or simply stop dead in its tracks, refusing to go one inch further until you showed it a little more respect.  As physicist Murray Gell-Mann once quipped, “Imagine how hard physics would be if particles could think.”

As we try to understand what influences our buyers, we tend to apply something like the laws of physics to unraveling attribution. We apply formulas to various touchpoints, mathematically weighting their respective values. We can weight it to the first click, the last click, or divvy up the value based on some arbitrary calculation. But, in the end, as we try to figure out the new rules of marketing, we tend to forget that these balls have brains.

Go to the Source

If we want to understand what makes buyers buy, we should ask them. We should base attribution models on decision paths, not arbitrary formulas. We should walk through the buying landscape with our prospects, seeing how they respond at each intersection point. And when we build our attribution models, we should base them on psychology, not physics.

Is this approach harder than the holy grail of a universal attribution formula (or even multiple variations of said formula)? Absolutely. It’s fuzzy and sometimes messy. It tends to squirm around a lot. And unlike Newtonian physics, it depends on context. What I’m proposing is riddled with “ifs” and “maybes.” In short, it’s human in its ambiguity, and that’s really the whole point. I would much rather have ambiguity that’s somewhat right than clarity that’s completely wrong.

Different Platforms, Different Ads

First published June 9, 2011 in Mediapost’s Search Insider

There’s little argument that mobile’s time has come. According to Google, mobile searches make up anywhere from 5% to 12% of the total query volume for many popular keywords. And for many categories (like searches for local businesses) the percentage is much higher. That officially qualifies as “something to consider” in most marketing strategies. For many marketers, though, the addition of mobile is a simple check box addition in planning a search campaign. In Google’s quest to make life simple for marketers, we’re missing some fundamental aspects of marketing to mobile prospects. Okay, we’re missing one fundamental aspect:  it’s different. Really different.

Last week, I talked about how my behaviors vary across multiple devices. But it’s not just me. It’s everyone. And those differences in behavior will continue to diverge as experiences become more customized. The mobile use case will look significantly different than the tablet use case. Desktops and smart entertainment devices will be completely different beasts. We’ll use them in different ways, with different intents, and in different contexts. We’d better make sure our marketing messages are different too.

Let’s go back to the Jacquelyn Krones research from Microsoft, which I talked about in the last column. If we divide search activity into three buckets: missions, excavations and explorations, we can also see that three different approaches to search ads should go along with those divergent intents.

Excavation search sessions, which still live primarily on the desktop, are all about information gathering. Success ads for these types of searches should offer rich access to relevant content. Learn to recognize the keywords in your campaigns that indicate excavation queries. They are typically more general in nature, and are often aligned with events that require extensive research: major purchases, planning vacations, researching life-altering events like health concerns, moving to a new community, starting college or planning a wedding. In our quest to squeeze conversions off a landing page, we often not only pare down content, but also on-page navigation pointing to more content. For an excavation-type search, this is exactly the wrong approach. Here, the John Caples approach to copy writing might be just the ticket: long, information rich content that allows the user to “create knowledge.”

Missions, especially on mobile devices, are just that. You get in and you get out, hopefully with something useful — that lets you do something else. Successful ads in this environment should do the same thing: take you one (or several) steps closer to a successful completion of the mission. Ad messaging should offer the promise of successful mission completion, and the post-click destination should deliver on that promise. Clean, hassle-free and exquisitely simple to use are the marching orders of mobile advertising.

Perhaps the most interesting search use case is that on a tablet device. I’ve chatted with Yahoo’s relatively new VP of search, Shashi Seth, about this. He believes tablets might open the door for the visually rich, interactive ads that brand marketers love. And Krones research seems to indicate that this might indeed be the case. Tablets are ideal for exploration searches, which tend to be meandering voyages through the online landscape with less specific agendas. The delight of serendipity is one big component in an expedition search. And it’s this that marks a significant departure for most search marketers.

Every search marketer learns the hard way that it’s incredibly difficult to lure search users away from the task they have in mind. When we do our keyword analysis, we’re usually disappointed to find that the list of highly relevant words is much smaller than we thought. So, we extend our campaign into keywords that, while not directly relevant, are at least adjacent to the user’s anticipated intent. If they’re looking for a jigsaw, we might try running an ad for free children’s furniture plans. Or, if they’re looking for a new car, we might try running an ad that reminds them that they can save 15% on their car insurance just by clicking on our ad.

We’ve all been here. In the mind of the marketer, it makes sense to buy these keywords. After all, the two worlds are not so far apart. A new owner of a jig saw might indeed be interested in building a set of bunk beds. And the new car owner will need car insurance. The problem is, neither of those things are relevant “in the moment,” and “in the moment” rules in most search interactions. So, after a few months of trying, we reluctantly remove these keywords from our campaign, or drop the bid price so low they’re buried 3 pages of results deep.

But perhaps tablet users are different. I’m certain the search experience on a tablet will soon look significantly different than it does on a PC. I would expect it to be more tactile and interactive – less rigidly ordered. And, in that environment, given the looser constraints of an expedition-type search, we might be more willing to explore a visually rich distraction. Shashi Seth thinks so. Krones’ research seems to also point in this direction. For this search marketer, that’s reason enough to test the hypothesis. Or, I will test it, as soon as Google, Yahoo and Bing make that possible.

The Segmentation of My Slime Trail

First published June 2, 2011 in Mediapost’s Search Insider

My connected life is starting to drop into distinct buckets. Now that I have my choice of connecting through my smartphone (an iPhone), my tablet (an iPad), my work computer (a MacBook) and my home computer (a Windows box), not to mention the new Smart TVs we bought (Samsungs), I’m starting to see my digital footprints (or my digital slime trail, to use Esther Dyson’s term) diverge. And the nature of the divergence is interesting.

Take Netflix, for example. It’s finally come to Canada, although with a depressingly small number of movies to choose from. My Netflix account stretches across all my devices, but the things I watch on my iPad are quite a bit different than my choices on an iPhone. And there is yet another profile for the things I choose on my MacBook (mainly when I travel). On the iPad, it’s typically an episode of “Arrested Development,” “Fawlty Towers” or, if I have a little more time, “Mad Men,” (and yes, I realize those three choices create an interesting psychological profile of myself) that offers some respite when the women of my household commandeer all available TV sets. On the new Samsung, it’s usually a movie intended for viewing by myself and at least one other member of my family.

Kindle offers a similar divergence of reading patterns — again, one application that’s spread across multiple devices. And, like my movie watching, my reading habits vary significantly depending on what I’m doing the reading on. I almost never read on my laptop, but it’s my preferred platform for research and annotation. My favorite reading device is my iPad, but it’s primarily used at home. I only take it on the road for extended trips. My fall-back is the iPhone, which gets called into duty when I have time to kill when traveling or in between my kid’s volleyball games.

Jacquelyn Krones, from Microsoft, did a fascinating research project where she looked at search habits across multiple devices. She found that our searches could be grouped into three different categories: missions, excavations and explorations.

Mission is the typical task-based single interaction where we need to get something done. The nature of the mission can be significantly different on a mobile device, where the mission is usually related to our physical location. In this case, geo-location and alternative methods of input (i.e. taking a picture, recording a sound or scanning a bar code) can make completing the mission easier, because the outputs are more useful and relevant in the user’s current context. This is why app-based search is rapidly becoming the norm on mobile devices. Missions on the desktop tend to be more about seeking specific information when then allows us to complete a task beyond the scope of our search interaction.

Excavations are research projects that can extend over several sessions and are typically tied to an event of high interest to the user. Health issues, weddings, major travel, home purchases and choosing a college are a few examples. The desktop is the hands-down winner for this type of search engagement. It provides an environment where information can be consolidated and digested through the help of other applications. Krones calls this “making knowledge,” implying a longer and deeper commitment on the part of the user.

Finally, we have exploration. Explorations are more serendipitous in nature,  with  users setting some fairly broad and flexible boundaries for their online interactions. While excavation can become a part of exploration, the behaviors are usually distinct. Exploration tends to be a little more fluid and open to suggestion, with the user being open to persuasion, while excavation is more about assembling information to support an intent that is already decided upon. Tablets seem to be emerging as a strong contender in the exploration category. The relaxed nature of typical interaction with an iPad, for example, supports the open agenda of exploration.

What this means, of course, is that the trail I leave behind on my mobile device starts to look significantly different than the trail on my laptop or tablet. Each fits a different use case, as they start to become tools with distinct capabilities, over and above the fact that they’re all connected to the Internet.

The Nobler Side of Social Media: Voices in a Choir

First published March 3, 2011 in Mediapost’s Search Insider

Last week, I took social media to task for making us less social. This week, I’m in Palm Springs for TED Active — and on day one, saw three very real examples of how the Internet is also connecting us in ways we never imagined before. They provided a compelling counterpoint to my original argument.

Eric Whitacre is a composer and conductor. In “Lux Aurumque (Light and Gold)” he conducts a choir singing his original composition. The choir, 185 strong, never sang together. They never met each other. They live in 12 different countries. Whitacre posted a video of himself conducting the piece, and every one of those 185 members of the choir submitted their individual parts through YouTube. The 247 separate tracks were combined into a rather amazing work that has been seen almost 2 million times. One of the contributors lived in a cabin in the remote Alaskan wilderness, 400 miles from the nearest town. Her satellite link was her only connection to the world.

The Johnny Cash Project is an equally amazing collaborative effort. Aaron Koblin and Chris Milk took archival film footage of Johnny Cash, dissected it frame by frame, and asked artists from around the world to redraw each frame. The contributions were stitched back together with Cash’s song, “Ain’t No Grave” as the soundtrack. The result is mesmerizing.

But perhaps the must stunning example of digital collaboration came not from art, but the very real world of the Middle East. Wadah Kanfar, the chief of Al-Jazeera, told us how the voices of many, amplified through technology, are bringing democracy and new hope to Egypt, Tunisia and Libya.

These examples speak of something much broader and powerful than just the typical applications of social media. And, like social media’s less attractive side, the impact of these new connections on society is yet to be determined. There is a social experiment being conducted in real time — but the results will only be fully realized through the lens of hindsight. Can true democracy be established in a place like Libya, even with the power of connection? Time alone will tell.

The new technology of connection releases things that are deeply human: the need to be part of the greater whole (for example, the choir member from Alaska); the need to contribute something of ourselves to the world (for example, the Johnny Cash Project); and the need for fairness and justice (as in the protests in the Middle East). In the last example, these connections illuminate the human condition in the darkest corners of the world and force accountability. Since the beginning of time, unfairness in the tribe has been punished. The difference now is that our human tribe extends around the world.

Kanfar told an amazing story that unfolded during the height of one of the protests. The demonstrators pleaded with Al-Jazeera to keep the cameras rolling through the night. “If you stop, we’re lost. But as long as you keep showing what’s happening, we have hope.”

Perhaps the true paradox of social media is not that we’re becoming less social, but that we’re becoming social in different ways. As we spend less time in our flesh and blood engagements, we spend more time establishing connections that were impossible before. In the ’70s, Mark Granovetter found that our social networks are composed of two distinct types of linkages, which he called strong and weak ties. The strong ties are the family and friends bonds that generally require both proximity and significant time together. The weak ties are the extended bonds that we might call acquaintances. As Granovetter found, it’s the weak ties that carry the surprising power of a community, especially when they’re mobilized for a common purpose. We rely on weak ties for referrals, favors and job offers. They extend beyond our immediate circle and provide important social capital when required.

Perhaps social media has had a negative impact on our strong ties, as I alluded to in my last column. But, as I was reminded today, it has dramatically increased our ability to form weak ties that align to concepts, interests and causes. And don’t let the name “weak ties” fool you. When they’re synchronized, they can be tremendously powerful. You might call them the harmonized voices of a global choir.

 

How Smart Do We Want Search to Get?

First published February 17, 2011 in Mediapost’s Search Insider

Imagine if a search engine was smart enough to be able to anticipate your needs before you know you need them. There it sits, silently monitoring your every move and just when you get a hankering for Thai food (burbling up to the threshold of consciousness), there it is with the hottest Thai restaurants within a 2-mile radius. You didn’t have to do a thing. It was just that smart!

Sound utopian? Then take a moment to think again. Do we really want search to become that smart? Sure, it sounds great in theory, but what would we have to share to allow search to become truly prescient?

The odd thing about humans is that we want our lives to be easier, but we don’t want to sacrifice control in the process. Well, to be more precise, we don’t want to sacrifice control in some situations. It all comes down to our level of engagement with the task at hand and the importance of gut instinct.

Humans have a mental bias towards control. We are most anxious when we have no control over our environment. In fact, even when we have very little control over outcomes (such as in a casino) we fool ourselves into thinking we do. We believe that the way we toss the dice on a craps table (or the hat we’re wearing, or the color of our underwear) has some impact of which numbers come up for us. Factory workers on an assembly line are much happier when they have a button that can stop the line, even if they never use it. We love control and are loath to relinquish it.

Even if a search engine had a 100% success rate in anticipating our intent, chances are we’d feel anxious about surrendering control of our decisions. In fact, this issue has already played out once online. At the height of the dot-com boom, billions of dollars were invested in creating friction-fee online marketplaces. The theory was that certain buying purchases, especially in the B2B marketplace, could be totally automated.  In a magazine article for supply chain management in 2000, an industry consultant saw a bright future for e-procurement: “”As long as you understand the business rules for making decisions, there’s no reason why you can’t automate.  Why can’t two computer systems – with built in rules – talk to each other?” 

It sounds completely rational, but ration has little to do with what we want. We want to feel in control. B2B buying didn’t become automated because we have too much investing in making buying decisions, even when we’re buying widgets for the assembly line, a bank of servers or copy paper in bulk. We don’t trust machines, no matter how smart they are, to make our decisions for us.

What we want is a search engine that guides us, but doesn’t push us. We want a smarter search experience, but we think of it as a filter rather than an arbitrator. Ideally, we want a concierge, who can make informed suggestions that we can then act on.  

Could a search engine become smart enough to predict our wants and desires before we’re even aware of them? Possibly, but the other part of that trade-off may be one we’re unwilling to make. How much privacy do we have to give up in order for the engine to know us that well? One of the hottest growth markets is in the area of personal technology. These little bits of tech live with us day in and day out. Consider the Fitbit, a sophisticated motion sensor that tracks our daily movements as long as we keep it with us. This daily diary of our activity (even how restless our sleep is) can be fed directly to the Web. The idea is intriguing, but the reality is a little disconcerting, especially when you think where this technology may go in the future. 

As we embed more and more technology into our everyday lives, there is the opportunity to collect signals that could help a search engine (but at this point, the label “search engine” seems wholly inadequate), track behaviors and make very educated guesses about what we might be interested in.  Our dreams and desires could potentially be crunched into just another algorithm. Practical? Perhaps. Desirable? I suspect not.

Finally, slumbering just below this discussion is the lurking presence of ultra-targeted advertising, and it’s this that we may find most troubling. If technology someday succeeds in reading our very minds, how can we use that same mind to say no?

High Risk & High Reward: Fully Engaged Buying

First published January 13, 2011 in Mediapost’s Search Insider

Last week I talked about High Risk/Low Reward purchases and said that when you’re in this quadrant, your “buying brain is driving the brake pedal through the floorboards.” True, but at least there is some consistency in the behaviors: risk trumps all.

When you’re navigating through a High Risk/High Reward purchase, you can be forgiven for appearing schizophrenic in your decision-making process. We swing back and forth from logic to what can only be described as love, with the volatility of a pendulum. If ever we were fully engaged in a buying process, this is the time. It’s all hands on deck for this purchase.

High Risk/High Reward purchases include new homes, vehicles, expensive toys and extravagant vacations. We spend a lot — but we also expect a lot. Game theorists and economists use a term called expected utility to describe our envisioned probable outcome from a decision.  It’s a pretty colorless term, and in theoretical terms, the lack of color in the label reflects the lack of emotion in the decision. Here, we weigh risk against logical outcomes — for example, the expected payoff from a wager.

Expected utility plays a major role in high reward purchases, but here, utility is dramatically colored with emotion. A car is not just about solving your transportation challenges (the expected utility). It’s about mid-life crises, keeping ahead of your brother-in-law, and the image of airing out your thinning hair on a cruise down the California coast. This, in many cases, is high-octane fantasizing, and there’s little logic to it.

Anywhere you find emotional rewards, you’ll find brands. And in these types of purchases of manufactured goods, you’ll inevitably find a brand turf war. Our complex relationships with the brands that define us are born in high-emotional-reward purchase scenarios. And in these types of purchases, the increased role of risk creates a delicious ambiguity in our rationalization of brand love.  We buy brands because of an emotional connection that comes straight from our limbic core (really, in this world of “pretty good” products, there is little to differentiate one brand from another), but our thinking brain kicks into overdrive to explain the logic behind our choice. We can’t seem to grasp the reality that logic had little to do with it.

These highly engaged purchases leave a vast and deep online footprint. We spend hours online, theoretically researching a purchase, but in many cases, we’re pre-rewarding ourselves through envisioning the acquisition of the reward. We use vehicle configurators and agonize over option packages and interior color schemes. We do endless virtual walk-throughs of homes. And we plan our dream vacation in minute detail, balancing recommendations from TripAdvisor and other sites against the limits of our budget and itinerary. Fantasizing begins online, and we have to allow for this in our marketing strategy.

When your product falls into this category, you want to support the fantasy as much as possible, utilizing digital media that encourages an emotional connection. Video and interactivity are a key part of the mix. We reach out on social media sites not just to manage risk by getting the opinions of others, but also to live vicariously through capturing the experiences of those who have bought before us.

As one would imagine, giving the depth and complexity of this online engagement, the search paths taken are equally convoluted. Search will be used repeatedly through the purchase process and for differing intents. There is no “one size fits all” approach here. In these purchase scenarios, a deep qualitative understanding of prospect behaviors will separate the great marketers from the herd.

High Risk & Low Reward: Buying with the Brakes On

First published January 6, 2011 in Mediapost’s Search Insider

After a brief detour last week (thanks for the many heartfelt messages for my Uncle Jim) I want to return to my exploration of the role of risk and reward in our online consumer behaviors.  We looked at the low risk/low reward and low risk/high reward quadrants. Today, we’ll continue by exploring the High Risk/Low Reward quadrant.

As a brief recap, our brains tend to apply brakes or step on the gas when steering through a buying decision based on the degree of risk and the promise of reward inherent in the decision. This dictates the nature of the consumer journey we take – both in terms of paths chosen and duration. I’ve talked before about the concept of bounded rationality, or the threshold of logical consideration we give to any decision. As behavioral economists have found, in almost every human decision, ration is modified by gut instinct. We call this “satisficing.” The only question, it seems, is the balance between the two. Risk and reward are hugely influential in determining our “satisficing” threshold for any purchase decision.

High Risk/Low Reward

In the last column, I described Low Risk/High Reward indulgences as “all gas and little brake.” The chocolate bar temptingly placed at the grocery store checkout aisle is just one example. High Risk/Low Reward purchases live at the opposite end of buyer behavior spectrum. Here your buying brain is driving the brake pedal through the floorboards. Consider this the consumer equivalent of teaching your teenager to drive.

In our personal lives, it includes such joyless purchases as insurance (all kinds, and the higher the premiums, the greater the perceived risk), financial planning, big-ticket home maintenance (not fun stuff like renovations, but replacing a roof, fixing a sagging foundation or getting a new furnace), car repairs and professional services such as lawyers or accountants.

Ironically, each of these types of purchases is usually triggered by either legislation  (car insurance), a non-negotiable need (a leaking roof) or the greater perceived risk of doing nothing (not having a lawyer in a divorce). If there wasn’t some impending reason to buy, we never would. There are no positive emotions at play here, only negative ones.

There is another type of purchase that falls into this quadrant that impacts many of our clients – bigger ticket B2B purchases. Indeed, I wrote an entire book on the subject : “The BuyerSphere Project.”

The lack of positive reward means our consumer research is all aimed at one thing and one thing only: the elimination of risk. In this scenario, risk has several dimensions: price, reliability and, because many of these purchases are predicated on avoiding future risk, balancing current risk against future risk. There is another aspect of risk, which is not commonly identified in these types of purchases: the risk of change. Often, big-ticket purchases require you to make changes in your routine, which involves change management.

When we look at what online behaviors might be for a High Risk/Low Reward purchase, we see risk mitigation as the key factor. Sites that allow buyers to compare several alternatives tend to be very popular, especially if they offer some type of rating. Online aggregators and directories tend to thrive in this quadrant, as they focus on quantifying pricing-based risk.

Because there is little or no emotional reward in these purchases, there is little in the way of positive emotional engagement.  As somebody once told me, nobody ever threw a party to buy car insurance.  Social media engagement is restricted to verifying you don’t get burned in the purchase. Rich-media demonstrations will be passed over in favor of quick comparison charts. And if you are engaging the senses, you’ll be capitalizing on fear of risk rather than a promise of reward.

Next week, we’ll make our way to the last quadrant of the matrix: High Risk/High Reward.