Category Archives: Behavior & Psychology

Why Our Brains are Blocking Ads

On Mediapost alone in the last three months, there have been 172 articles written that have included the words “ad blockers” or “ad blocking.” That’s not really surprising, given that Mediapost covers the advertising biz and ad blocking is killing that particular biz, to the tune of an estimated loss of $41 billion in 2016. eMarketer estimates 70 million Americans, or 1 out of every 4 people online, uses ad blockers.

Paul Verna, an eMarketer Senior Analyst said “Ad blocking is a detriment to the entire advertising ecosystem, affecting mostly publishers, but also marketers, agencies and others whose businesses depend on ad revenue.” The UK’s culture Secretary, John Whittingdale, went even further, saying that ad blocking is a “modern-day protection racket.”

Here’s the problem with all this finger pointing. If you’re looking for a culprit to blame, don’t look at the technology or the companies deploying that technology. New technologies don’t cause us to change our behaviors – they enable behaviors that weren’t an option before. To get to the bottom of the growth of ad blocking, we have to go to the common denominator – the people those ads are aimed at. More specifically, we have to look at what’s happening in the brains of those people.

In the past, the majority of our interaction with advertising was done while our brain was idling, with no specific task in mind. I refer to this as bottom up environmental scanning. Essentially, we’re looking for something to capture our attention: a TV show, a book, a magazine article, a newspaper column. We were open to being engaged by stimuli from our environment (in other words, being activated from the “bottom up”).

In this mode, the brain is in a very accepting state. We match signals from our environment with concepts and beliefs we hold in our mind. We’re relatively open to input and if the mental association is a positive or intriguing one – we’re willing to spend some time to engage.

We also have to consider the effect of priming in this state. Priming sets a subconscious framework for the brain that then affects any subsequent mental processing. The traditional prime that was in place when we were exposed to advertising was a fairly benign one: we were looking to be entertained or informed, often the advertising content was delivered wrapped in a content package that we had an affinity for (our favorite show, a preferred newspaper, etc), and advertising was delivered in discrete chunks that our brain had been trained to identify and process accordingly.

All this means that in traditional exposures to ads, our brain was probably in the most accepting state possible. We were looking for something interesting, we were primed to be in a positive frame of mind and our brains could easily handle the contextual switches required to consider an ad and it’s message.

We also have to remember that we had a relatively static ad consumption environment that usually matched our expectations of how ads would be delivered. We expected commercial breaks in TV shows. We didn’t expect ads in the middle of a movie or book, two formats that required extended focusing of attention and didn’t lend themselves to mental contextual task switches. Each task switch brings with it a refocusing of attention and a brief burst of heightened awareness as our brains are forced to reassess its environment. These are fine in some environments – not in others.

Now, let’s look at the difference in cognitive contexts that accompany the deliver of most digital ads. First of all, when we’re online on our desktop or engaged with a mobile device, it’s generally in what I’ll call a “top down foraging” mode. We’re looking for something specific and we have intent in mind. This means there’s already a task lodged in our working memory (hence “top down”) and our attentional spotlight is on and focused on that task. This creates a very different environment for ad consumption.

When we’re in foraging mode, we suddenly are driven by an instinct that is as old as the human race (actually, much older than that): Optimal Foraging Theory. In this mode, we are constantly filtering the stimuli of our environment to see what is relevant to our intent. It’s this filtering that causes attentional blindness to non-relevant factors – whether they be advertising banners or people dressed up like gorillas. This filtering happens on a subconscious basis and the brain uses a primal engine to drive it – the promise of reward or the frustration of failure. When it comes to foraging – for food or for information – frustration is a feature, not a bug.

Our brains have a two loop learning process. It starts with a prediction – what psychologists and economists call “expected utility.” We mentally place bets on possible outcomes and go with the one that promises the best reward. If we’re right, the reward system of the brain gives us a shot of dopamine. Things are good. But if we bet wrong, a different part of the brain kicks in: the right anterior insula, the adjacent right ventral prefrontal cortex and the anterior cingulate cortex. Those are the centers of the brain that regulate pain. Nature is not subtle about these things – especially when the survival of the species depends on it. If we find what we’re looking for, we get a natural high. If we don’t, it’s actually causes us pain – but not in a physical way. We know it as frustration. Its purpose is to encourage us to not make the same mistake twice

The reason we’re blocking ads is that in the context those ads are being delivered, irrelevant ads are – quite literally – painful. Even relevant ads have a very high threshold to get over. Ad blocking has little to do with technology or “protection rackets” or predatory business practices. It has to do with the hardwiring of our brains. So if the media or the ad industry want to blame something or someone, let’s start there.

The Bermuda Triangle of Advertising

In the past few weeks, via the comments I’ve received on my two (1,2) columns looking at the possible future of media selection and targeting, it’s become apparent to me that we’re at a crisis point when it comes to advertising. I’ve been fortunate enough to have some of the brightest minds and sharpest commentators in the industry contributing their thoughts on the topic. In the middle of all these comments lies a massive gap. This gap can be triangulated by looking at three comments in particular:

Esther Dyson: “Ultimately, what the advertisers want is sales…  attention, engagement…all these are merely indicators for attribution and waypoints on the path to sales.”

Doc Searls: “Please do what you do best (and wins the most awards): make ads that clearly sponsor the content they accompany (we can actually appreciate that), and are sufficiently creative to induce positive regard in our hearts and minds.”

Ken Fadner: “I don’t want to live in a world like this one” (speaking of the hyper targeted advertising scenario I described in my last column).

These three comments are all absolutely right (with the possible exception of Searls, which I’ll come back to in a minute) and they draw a path around the gaping hole that is the future of advertising.

So let’s strip this back to the basics to try to find solid ground from which to move forward again.

Advertising depends on a triangular value exchange: We want entertainment and information – which is delivered via various media. These media need funding – which comes from advertising. Advertising wants exposure to the media audience. So, if we boil that down – we put up with advertising in return for access to entertainment and information. This is the balance that is deemed “OK” by Doc Searls and other commenters

The problem is that this is no longer the world we live in – if we ever did. The value exchange requires all three sides to agree that the value is sufficient for us to keep participating. The relatively benign and balanced model of advertising laid out by Searls just doesn’t exist anymore.

The problem is the value exchange triangle is breaking down on two sides – for advertisers and the audience.

As I explained in an earlier Online Spin, value exchanges depend on scarcity and for the audience, there is no longer a scarcity of information and entertainment. Also, there are now new models for information and entertainment delivery that disrupt our assessment of this value exchange. The cognitive context that made us accepting of commercials has been broken. Where once we sat passively and consumed advertising, we now have subscription contexts that are entirely commercial free. That makes the appearance of advertising all the more frustrating. Our brain has been trained to no longer be accepting of ads. The other issue is that ads only appeared in contexts where we were passively engaged. Now, ads appear when we’re actively engaged. That’s an entirely different mental model with different expectations of acceptability.

This traditional value exchange is also breaking down for advertisers. The inefficiencies of the previous model have been exposed and more accountable and effective models have emerged. Dyson’s point was probably the most constant bearing point we can navigate to – companies want sales. They also want more effective advertising. And much as we may hate the clutter and crap that litters the current digital landscape, when it works well it does promise to deliver a higher degree of efficiency.

So, we have the previous three sided value exchange collapsing on two of the sides, bringing the third side – media- down with it.

Look, we can bitch about digital all we want. I share Searls frustration with digital in general and Fadner’s misgivings about creepy and ineffective execution of digital targeting in particular. But this horse has already left the barn. Digital is more than just the flavor of the month. It’s the thin edge of a massive wedge of change in content distribution and consumption. For reasons far too numerous to name, we’ll never return to the benign world of clearly sponsored content and creative ads. First of all, that benign world never worked that well. Secondly, two sides of the value-exchange triangle have gotten a taste of something better- virtually unlimited content delivered without advertising strings attached and a much more effective way to deliver advertising.

Is digital working very well now? Absolutely not. Fadner and Searls are right about that, It’s creepy, poorly targeted, intrusive and annoying. And it’s all these things for the very same reason that Esther Dyson identified – companies want sales and they’ll try anything that promises to deliver it. But we’re at the very beginning of a huge disruptive wave. Stuff isn’t supposed to work very well at this point. That comes with maturity and an inevitable rebalancing. Searls may rail against digital, just like people railed against television, the telephone and horseless carriages. But it’s just too early to tell what a more mature model will look like. Corporate greed will dictate the trying of everything. We will fight back by blocking the hi-jacking of our attention. A sustainable balance will emerge somewhere in between. But we can’t see it yet from our vantage point.

Sorry Folks – Blame it on Ed

Just when you thought it was safe to assume I’d be moving on to another topic, I’m back. Blame it on Ed Papazian, who commented on last week’s column about the Rise of the Audience marketplace. I’ll respond to his comment in multiple parts. First, he said:

“I think it’s fine to speculate on “audience” based advertising, by which you actually mean using digital, not traditional media, as the basis for the advertising of the future.”

All media is going to be digital. Our concept of “traditional” media is well down its death spiral. We’re less then a decade away from all media being delivered through a digital platform that would allow for real time targeting of advertising. True, we have to move beyond the current paradigm of mass distributed, channel restricted advertising we seem stuck in, but the technology is already there. We (by which I mean the ad industry) just have to catch up. Ed continues in this vein:

“However, in a practical sense, not only is this, as yet, merely a dream for TV, radio and print media, but it is also an oversimplification.”

Is it an oversimplification? Let’s remember that more and more of our media consumption is becoming trackable from both ends. We no longer have to track from the point of distribution. Tracking is also possible at the point of consumption. We are living with devices that increasingly have insight into what we’re doing at any moment of the day. It’s just a matter of us giving permission to be served relevant, well targeted ads based on the context of our lives.

But what would entice us to give this permission? Ed goes on to say that…

“Even if a digital advertiser could actually identify every consumer in the U.S. who is interested—or “in the market” for what his ads are trying to sell and also how they are pitching the product/service—and send only these people “audience targeted ads”, many of the ads will still not be of interest…”

Papazian proposed an acid test of sorts (or, more appropriately – an antacid test):

“Why? Because they are for unpleasant or mundane products—toilet bowel cleansers, upset stomach remedies, etc.—-or because the ads are pitching a brand the consumer doesn’t like or has had a bad experience with.”

Okay, let me take up the challenge that Ed has thrown down (or up?). Are ads for stomach remedies always unwanted? Not if I have a history of heartburn, especially when my willpower drops and my diet changes as I’m travelling. Let’s take it one step further. I’ve made a dinner reservation for 7 pm at my favorite Indian food restaurant while I’m in San Francisco. It’s 2 pm. I’ve just polished off a Molinari’s sandwich and I’m heading back to my hotel. As I turn the corner at O’Farrell and Powell, an instant coupon is delivered to my phone with 50% off a new antacid tablet at the Walgreen’s ahead, together with the message: “Prosciutto, pepperoncinis and pakoras in the same day? Look at you go! But just in case…”

The world Ed talks about does have a lot of unwanted advertising. But in the world I’m envisioning, where audiences are precisely targeted, we will hopefully eliminate most of those unwanted ads. Those ads are the by-product of the huge inefficiencies in the current advertising marketplace. And it’s this inefficiency that is rapidly destroying advertising as we know it from both ends. The current market is built on showing largely ineffective ads to mainly disinterested prospects – hoping there is an anomaly in there somewhere – and charging the advertiser to do so. I don’t know about you, but that doesn’t sound like a sustainable plan to me.

When I talk about selecting audiences in a market, it’s this level of specificity that I’m talking about. There is nothing in the above scenario that’s beyond the reach of current Mar-Tech. Perhaps it’s oversimplified. But I did that to make a point. In paid search, we used to have a saying, “buy your best clicks first”. It meant starting with the obviously relevant keywords – the people who were definitely looking for you. The problem was that there just wasn’t enough volume on these “sure-bet” keywords alone. But as digital has matured, the amount of “sure-bet” inventory has increased. We’re still not all the way there – where we can rely on sure-bet inventory alone – but we’re getting closer. The audience marketplace I’m envisioning gets us much of the way there. When technology and data allow us to assemble carefully segmented audiences with a high likelihood of successful engagement on the fly, we eliminate the inefficiencies in the market.

I truly believe that it’s time to discard the jury-rigged, heavily bandaged and limping behemoth that advertising has become and start thinking about this in an entirely new way. Papazian’s last sentence in his comment was…

“You just can’t get around the fact that many ads are going to be unwanted, no matter how they are targeted….”

Do we have to accept that as our future? It’s certainly the present, but I would hate to think we can’t reach any higher. The first step is to stop accepting advertising the way we know it as the status quo. We’ll be unable to imagine tomorrow if we’re still bound by the limitations of today.

 

The Rise of the Audience Marketplace

Far be it from me to let a theme go before it has been thoroughly beaten to the ground. This column has hosted a lot of speculation on the future of advertising and media buying and today, I’ll continue in that theme.

First, let’s return to a column I wrote almost a month ago about the future of advertising. This was a spin-off on a column penned by Gary Milner – The End of Advertising as We Know It. In it, Gary made a prediction: “I see the rise of a global media hub, like a stock exchange, which will become responsible for transacting all digital programmatic buys.”

Gary talked about the possible reversal of fragmentation of markets by channel and geographic area due to the potential centralization of digital media purchasing. But I see it a little differently than Gary. I don’t see the creation of a media hub – or, at least – that wouldn’t be the end goal. Media would simply be the means to the end. I do see the creation of an audience market based on available data. Actually, even an audience would only be the means to an end. Ultimately, we’re buying one thing – attention. Then it’s our job to create engagement.

The Advertising Research Foundation has been struggling with measuring engagement for a long time now. But it’s because they were trying to measure engagement on a channel-by-channel basis and that’s just not how the world works anymore. Take search, for example. Search is highly effective at advertising, but it’s not engaging. It’s a connecting medium. It enables engagement, but it doesn’t deliver it.

We talk multi-channel a lot, but we talk about it like the holy grail. The grail in this cause is an audience that is likely to give us their attention and once they do that – is likely to become engaged with our message. The multi-channel path to this audience is really inconsequential. We only talk about multi-channel now because we’re stopping short of the real goal, connecting with that audience. What advertising needs to do is give us accurate indicators of those two likelihoods: how likely are they to give us their attention and what is their potential proclivity towards our offer. The future of advertising is in assembling audiences – no matter what the channel – that are at a point where they are interested in the message we have to deliver.

This is where the digitization of media becomes interesting. It’s not because it’s aggregating into a single potential buying point – it’s because it’s allowing us to parallel a single prospect along a path of persuasion, getting important feedback data along the way. In this definition, audience isn’t a static snapshot in time. It becomes an evolving, iterative entity. We have always looked at advertising on an exposure-by-exposure basis. But if we start thinking about persuading an audience that paradigm needs to be shifted. We have to think about having the right conversation, regardless of the channel that happens to be in use at the time.

Our concept of media happens to carry a lot of baggage. In our minds, media is inextricably linked to channel. So when we think media, we are really thinking channels. And, if we believe Marshall McLuhan, the medium dictates the message. But while media has undergone intense fragmentation they’ve also become much more measurable and – thereby – more accountable. We know more than ever about who lies on the other side of a digital medium thanks to an ever increasing amount of shared data. That data is what will drive the advertising marketplace of the future. It’s not about media – it’s about audience.

In the market I envision, you would specify your audience requirements. The criteria used would not be so much our typical segmentations – demography or geography for example. These have always just been proxies for what we really care about; their beliefs about our product and predicted buying behaviors. I believe that thanks to ever increasing amounts of data we’re going to make great strides in understanding the psychology of consumerism. These  will be foundational in the audience marketplace of the future. Predictive marketing will become more and more accurate and allow for increasingly precise targeting on a number of behavioral criteria.

Individual channels will become as irrelevant as the manufacturer that supplies the shock absorbers and tie rods in your new BMW. They will simply be grist for the mill in the audience marketplace. Mar-tech and ever smarter algorithms will do the channel selection and media buying in the background. All you’ll care about is the audience you’re targeting, the recommended creative (again, based on the mar-tech running in the background) and the resulting behaviors. Once your audience has been targeted and engaged, the predicted path of persuasion is continually updated and new channels are engaged as required. You won’t care what channels they are – you’ll simply monitor the progression of persuasion.

 

NBC’s Grip on Olympic Gold Slipping

When it comes to benchmarking stuff, nothing holds a candle to the quadrennial sports-statzapooloza we call the Summer Olympics. After 3 years, 11 months and 13 days of not giving a crap about sports like team pursuit cycling or half heavyweight judo, we suddenly get into fist fights over 3 one hundredths of a second or an unawarded Yuko.

But it’s not just sports that are thrown into comparative focus by the Olympic games. It also provides a chance to take a snap shot of media consumption trends. The Olympics is probably the biggest show on earth. With the possible exception of the World Cup, it’s the time when the highest number of people on the planet are all watching the same thing at the same time. This makes it advertising nirvana.

Or it should.

Over the past few Olympics, the way we watch various events has been changing because of the nature of the Games themselves. There are 306 separate events in 35 recognized sports that are spread over 16 days of competition. The Olympics play to a global audience, which means that coverage has to span 24 time zones. At any given time, on any given day, there could be 6 or 7 events running simultaneously. In fact, as I’m writing this, diving, volleyball, men’s omnium cycling, Greco-Roman wresting, badminton, field hockey and boxing are all happening at the same time.

This creates a challenge for network TV coverage. The Olympics are hardly a one-size-fits-all spectacle. So, if you’re NBC and you’ve shelled out 1.6 billion dollars to provide coverage, you have a dilemma: how do you assemble the largest possible audience to show all those really expensive ads to? How do you keep all those advertisers happy?

NBC’s answer, it seems, is to repackage the Olympics as a scripted mini-series. It means throttling down real time streaming or live broadcast coverage on some of the big events so these can be assembled into packaged stories during their primetime coverage. NBC’s chief marketing officer, John Miller, was recently quoted as saying, “The people who watch the Olympics are not particularly sports fans. More women watch the games than men, and for the women, they’re less interested in the result and more interested in the journey. It’s sort of like the ultimate reality show and miniseries wrapped into one.”

So, how is this working out for NBC? Not so well, as it turns out.

Ratings are down, with NBC posting the lowest primetime numbers since 1992. The network has come under heavy fire for what is quite possibly the worst Olympic coverage in the history of the games. Let’s ignore for a moment their myopic focus on US contestants and a handful of superstars like Usain Bolt (which may not be irritating unless you’re a international viewer like myself). Their heavy-handed attempt to control and script the fragmented and emergent drama of any Olympic games has stumbled out of the blocks and fallen flat on its face.

I would categorize this as a “RTU/WTF” The first three letters stand for “Research tells us…” I think you can figure out the last three. I’m sure NBC did their research to figure out what they thought the audience really wanted in Olympics game coverage. I’m positive there was a focus group somewhere that told the network what they wanted to hear; “Screw real time results. What we really want is for you to tell us – with swelling music, extreme close ups and completely irrelevant vignettes– the human drama that lies behind the medals…” And, in the collective minds of NBC executives, they quickly added, “…with a zillion commercial breaks and sponsorship messages.”

But it appears that this isn’t what we want. It’s not even close. We want to see the sports we’re interested in, on our device of choice and at the time that best suits us.

This, in a nutshell, is the disruption that is broadsiding the advertising industry at full ramming speed. It was exactly what I was talking about in my last column. NBC may have been able to play their game when they were our only source of information and we were held captive by this scarcity. But over the past 3 Olympic games, starting in Athens in 2004, technology has essentially erased that scarcity. The reality no longer fits NBC’s strategy. Coverage of the Olympics is now a multi-channel affair. What we’re looking for is a way to filter the coverage based on what is most interesting to us, not to be spoon-fed the coverage that NBC feels has the highest revenue potential.

It’s a different world, NBC. If you’re planning to compete in Tokyo, you’d better change your game plan, because you’re still playing like it’s 1996.

 

 

 

Media Buying is Just the Tip of Advertising’s Disruptive Iceberg

Two weeks ago, Gary Milner wrote a lucid prediction of what advertising might become. He rightly stated that advertising has been in a 40-year period of disruption. Bingo. He went on to say that he sees a consolidation of media buying into a centralized hub. Again, I don’t question the clarity of Milner’s crystal ball. It makes sense to me.

What is missing from Milner’s column, however, is the truly disruptive iceberg that is threatening to founder advertising as we know it – the total disruption of the relationship between the advertiser and the marketplace. Milner deals primarily with the media buying aspect of advertising but there’s a much bigger question to tackle. He touched on it in one sentence: “The fact is that a vast majority of advertising is increasingly being ignored.”

Yes! Exactly. But why?

I’ll tell you why. It’s because of a disagreement about what advertising should be. We (the buyers) believe advertising’s sole purpose is to inform. But the sellers believe advertising is there to influence buyers. And increasingly, we’re rejecting that definition.

I know. That’s a tough pill to swallow. But let’s apply a little logic to the premise. Bear with me.

Advertising was built on a premise of scarcity. Market places can’t exist without scarcity. There needs to be an imbalance to make an exchange of value worthwhile. Advertising exists because there once was a scarcity of information. We (the buyers) lacked information about products and services. This was primarily because of the inefficiencies inherent in a physical market. So, in return for the information, we traded something of value – our attention. We allowed ourselves to be influenced. We tolerated advertising because we needed it. It was the primary way we gained information about the marketplace.

In Milner’s column, he talks about Peter Diamandis’ 6 stages that drive the destruction of industries: digitalization, deception, disruption, demonetization, dematerialization, and democratization. Milner applied it to the digitization of media. But these same forces are also being applied to information and rather than driving advertising from disruption to a renaissance period, as Milner predicts, I believe we’ve barely scratched the surface of disruption. The ride will only get bumpier from here on.

The digitization of information enables completely new types of marketplaces. Consider the emergence of the two-sided markets that both AirBNB and Uber exemplify. Thanks to the digitization of information, entirely new markets have emerged that allow the flow of information between buyers and suppliers. Because AirBNB and Uber have built their business models astride these flows, they can get a cut of the action.

But the premise of the model is important to understand. AirBNB and Uber are built on the twin platforms of information and enablement. There is no attempt to persuade by the providers of the platforms – because they know those attempts will erode the value of the market they’re enabling. We are not receptive to persuasion (in the form of advertising) because we have access to information that we believe to be more reliable – user reviews and ratings.

The basic premise of advertising has changed. Information is no longer scarce. In fact, through digitization, we have the opposite problem. We have too much information and too little attention to allocate to it. We now need to filter information and increasingly, the filters we apply are objectivity and reliability. That turns the historical value exchange of advertising on its head. This has allowed participatory information marketplaces such as Uber, AirBNB and Google to flourish. In these markets, where information flows freely, advertising that attempts to influence feels awkward, forced and disingenuous. Rather than building trust, advertising erodes it.

This disruption has also driven another trend with dire consequences for advertising as we know it – the “Maker” revolution and the atomization of industries. There are some industries where any of us could participate as producers and vendors. The hospitality industry is one of these. The needs of a traveller are pretty minimal – a bed, a roof, a bathroom. Most of us could provide these if we were so inclined. We don’t need to be Conrad Hilton. These are industries susceptible to atomization – breaking the market down to the individual unit. And it’s in these industries where disruptive information marketplaces will emerge first. But I can’t build a refrigerator. Or a car (yet). In these industries, scale is still required. And these will be the last strongholds of mass advertising.

Milner talked about the digitization of media and the impact on advertising. But there’s a bigger change afoot – the digitization of information in marketplaces that previously relied on scarcity of information to prop up business models. As information goes from scarcity to abundance, these business models will inevitably fall.

Where Context Comes From

Fellow Spinner Cory Treffiletti told you last week that data without context is noise.

Absolutely right.

I want to continue that conversation, because it’s an important one. It’s all about context. So let’s talk a little more about context. And specifically how we decide what makes up that context.

You might have seen or heard the hubbub that emerged around a tweet from Neil Degrasse Tyson a month ago: “Earth needs a virtual country: #Rationalia, with a one-line Constitution: All policy shall be based on the weight of evidence”

Nice thought, but it ignited a social media shit-storm. Which was entirely predictable. Because we don’t want to be rational. We want to be human. Did 79 episodes of Star Trek teach us nothing?

The biggest beef against #Rationalia was that evidence is typically in the eyes of the beholder. It’s all a matter of context. I’m guessing that the policies that come from evidence in the hands of Republicans will not bear much resemblance to policies that come from the evidence of Democrats. The evidence could be the same but the context is different, because Democrats and Republicans think differently.

Like Treffiletti said – evidence without context is just noise. And our context is only marginally based on evidence. And that’s why #Rationalia – as intellectually attractive as it might be – won’t work.

We as humans understand the world through something called sense making. This is the process we use to build context. In 2006, psychologist Gary Klein shed new light on how we make sense of the world. We start with a frame that captures our current understanding of the situation and depending on the evidence presented to us, we decide whether to elaborate our frame or discard it and create a new frame. So, sensemaking is really an iterative loop that is constantly using our current frame as a reference point.

But here’s the thing. What we consider as evidence depends on the frame we already have in place. It’s the filter that determines what data we pay attention to. And much as Neil Degrasse Tyson would like the governments of the world to be totally unbiased in the filtering of evidence, “that dog just won’t hunt.” It can’t – because we can’t consider data without some context to put it in.

Perhaps someday artificial intelligence will advance to the point where it can pull unbiased context out of random data. Maybe computers will be able to do what we’re unable to – make sense of the noise without assuming a pre-existing frame. But we’re not there yet. And even if we were, we would simply look at the conclusions of the computer and decide whether we agree with them or not. As long as humans are in charge, there will always be a biased filter in place.

So back to Cory’s column. If context is so important, think about where that context is coming from. Who is defining the context and what frame are they operating from? That in turn will define what data you consider and how you consider it.

Perhaps the most important decision before considering data is to be totally clear about what the goal is. Goals, together with experience, form the underpinning of beliefs. Frames are then built on those beliefs. Context comes from those frames. And context is the filter we apply to evidence.

When Evolution (and Democracy) Get It Wrong

“I’ve made a huge mistake”

G.O.B. – Arrested Development

The world is eliminating friction. Generally, that’s a good thing. But there may be unintended consequences.

Let’s take evolution, for instance. Friction in evolution comes in the form of survival rates. Barring other mitigating factors over the length of a natural evolutionary timeline, successful mutations will result in higher survival rates and, therefore, higher propagation rates. Those mutations that best fit the adaptive landscape will survive. Unsuccessful ones will die out.

But that assumes a landscape in which survival has a fairly high threshold. The lower the threshold, the more likely it is that a greater number of mutations will “get over the bar”.

Two factors can vary that threshold. One is the adaptive environment itself. It may proved to be “kinder and gentler” for an extended period of time, allowing for the flourishing of “less fit” candidates.

The other is a factor unique to one species that allows them to alter the environment at their will. Like technology, for instance. In the hands of humans, we have used technology to eliminate friction and drag the bar lower and lower – until the idea of survival of the fittest has little meaning any more.

The more friction there is, the more demanding that propagation threshold is. This same phenomenon is true of most emergent systems. What emerges depends on the environment the system is operating in. Demanding environments are called rugged landscapes. There is some contrary logic that operates here. The removal of friction can actually increase the number of mutations (or, in societal terms – innovation). More mutations – or ideas – can survive because the definition of “fittest” is less demanding. But we also build up a tipping point of mediocrity in the gene or meme pool and if something does cause the adaptive landscape to suddenly become more rugged, the extinction rate soars. The reckoning can be brutal.

Lets look at memes. For ideas to spread, there used to be a fairly high threshold of “shareability.” There was a publishing and editorial supply chain that introduced a huge amount of friction into our culture. This friction has largely been removed, allowing any of us to instantly share ideas. This has lead to a recalibration of the shareability threshold – an explosion of viral content that happens to ding our fickle consciousness just long enough for us to hit the share button. Bob Garfield called this “The Survival of the Funnest” in a recent column.

But was the previous friction a good thing? We definitely have more content being produced now. Some of it is very good. This couldn’t have happened under the previous cultural supply chain. But a lot of the content is – at best – frivolous and – at worst – dangerous. That same chain did force thoughtfulness into the filter of content. Someone – somewhere – had to think about what was fit to publish.

Now, one could argue that ultimately the market will get it right. We could also argue that evolution never makes mistakes. But that’s not always true. If the threshold of fitness gets lowered, evolution will make mistakes. Tons of them. I suspect the same is true of markets. If we grow complacent and entitled, we can flood the market with mediocrity. We humans have an unlimited capacity to make bad choices if we don’t have to make good ones

This brings me to the current state of democracy. Democracy is cultural evolution in action. It means – literally – the “people” (demos) “rule” (kratia). It assumes that the majority will get it right. But the adaptive landscape of democracy has also changed. The threshold has been lowered. We are making electoral decisions based on the same viral content that has flooded the rest of our culture. Thoughtfulness is in woefully short supply. There is no shortage of knee-jerk soundbites that latch on to the belief system of a disgruntled electorate. This is an ideological death spiral that could have big consequences.

Correction.

Make that “Huuugggeee” consequences.

 

 

 

Happiness as a Corporate Metric

Costa Rica is the happiest place on earth. The least happy place on earth? That would be Botswana.

At least, those are the results according to by the things measured by the Happy Planet Index. The index is a measure of three factors, life expectancy, Experienced Well Being and Ecological Footprint. Western nations tend to do very well on the first two measures, but suck at the third. The index is looking for balance – being happy without raping and pillaging the earth. Here in North America, we still have a ways to go in that department.

In another study – the 2015 UN’s World Happiness Report – a different weighting of factors treated the western world a little better. When we tip the balance towards individual happiness and away from the environment and sustainability; Denmark, Switzerland, Iceland, Norway, Finland and Canada topped the rankings. Apparently, snow is good for the soul. At the bottom of the list were Benin, Afghanistan, Togo, Syria and Burundi (it’s hard to believe anywhere scored worse than Syria – mental note: stroke Burundi off my travel bucket list).

Jigme-Singye-Wangchuck

The 4th King of Bhutan: Jigme Singye Wangchuck

In 1971, the 4th Dragon King of Bhutan, Jigme Singye Wangchuck was so enamored with the idea of happiness as a goal that he introduced a new measure of a nation’s worth: Gross National Happiness. He believed that the western world’s obsession with materialism represented by Gross National Product shouldn’t be the sole measure of progress. Things like sustainable development, care for the environment, good governance and preservation of culture deserved to be measured as well. In the 45 years since the idea of Gross National Happiness was first floated by his Royal Dragonship, it’s been slow to take, but perhaps it’s time has come. By the way, in the UN survey, Bhutan was in the middle of the pack for happiness, ranking 84th out of 157 countries.

Happiness should be important with companies as well. There’s even an investment fund that invests exclusively in companies with happy employees. But happiness can be an elusive goal, especially when we try to wrestle it to the ground in the way of a hard performance metric in a corporate environment. What exactly are we measuring when we measure happiness? And who’s happiness are we measuring? Our customers? Our shareholders? Our employees? All of the above?

Let’s single out employees. Companies like Zappos and Southwest Airlines have tried to make employee happiness a metric that matters. But what makes an employee happy? Perhaps we can find a clue in a recent survey from Ypulse that asked Millennials which companies they’d most like to work at. The top 10 answers were:

  1. Google
  2. Apple
  3. Disney
  4. Non-profit/charity
  5. School/community/university
  6. Hospital
  7. U.S. government
  8. Myself/my own company
  9. Amazon
  10. FBI/CIA

It’s an interesting list. It’s not the list you’d expect from a generation that simply wants to get rich quick. You don’t work at a hospital or the FBI if you want to make big bucks. This is a list that comes from people who want to make a difference. They want meaning. In the words of Steve Jobs, they “want to put a ding in the universe.”

I get that. I recently discovered just how hard happiness is to pin down. After selling my company, I was fortunate enough to achieve financial independence and retire at 51. I should have been deliriously happy, right? Well, I wasn’t suicidal by any means, but I would say my level of happiness actually decreased after I tried retirement. I was at the other end of my career path from Millennials, but meaning remained just as important to me.

In a study of retirement satisfaction published in the Journal of Financial Counselling and Planning, Sarah Arsebedo and Martin Seay found that psychologist Martin Seligman’s positive psychological attributes, referred to as PERMA (Positive emotions, Engagement, [Family] Relationships, Meaning and Accomplishment) – don’t go away when we retire. These things are necessary to happiness. For men in particular – and increasingly so with women – we rely on our jobs to provide many of these. This was certainly true for me.

It’s good we’re paying more attention to happiness. But it’s also important that we understand what we’re talking about when we refer to happiness. It has little to do with monetary measures of success. Whether we’re talking nations, corporations or employees, it turns out that happiness means a sense of interconnectedness, contribution and personal values. It means living beyond ourselves and leaving some footprint that won’t fade when we no longer walk this earth.

Ultimately, it means doing stuff that matters.

 

Chatting Up a Storm

I’ve been talking about a “meta-app” for ages. It looks like China may have found it in WeChat. We in the Western World have been monitoring the success of TenCent’s WeChat with growing interest. Who would have thought that a simple chat interface could be the killer app of the future?

Chat interfaces seem so old school. They appear to be clunky and inefficient. But the beauty of chat is that it’s completely flexible. As Wired.com’s David Pierce said, “You can, for all intents and purposes, live your entire life within WeChat.” That’s exactly the type of universal functionality you need to become a meta-app.

We’ve always envisioned having conversations with our computers, even going back to Star Trek and 2001: A Space Odyssey. But we didn’t think out conversations would be carried out in text bubbles on a hand held device. A PEW study found that texting is the single most common activity on a Smartphone. 97% of us do it. So if messaging is the new UI, none of us have to learn anything new.

Graphic interfaces are necessarily tied to a particular task. The interface is designed for a specific intent. But messaging interfaces can adapt as intents change. They can quickly switch from social messaging to purchasing online to searching for an address to – well – you get the idea.

But where texting really shines is when it’s combined with artificially intelligent chatbots. A simple, universally understood interface that’s merged with powerful intelligent agents – either human and machine – allows the user to quickly request or do anything they wish. The functionality of intent specific apps can be called on as required and easily introduced into the chat interface.

In effect, text messaging is doing exactly what Apple hoped Siri would do – become the universal interface to the digital world. Given that speaking would appear to be easier than texting, one has to wonder why Siri never really gained the traction that Apple hoped it would. I think this can be attributed to three reasons:

  • The difficulties of spoken interpretation still restricts the functionality of Siri. The success rate isn’t high enough to completely gain our confidence
  • The use case of Siri is still primarily when we need to keep our hands free. It’s not that easy to switch to interactions where tactile input is required
  • We look like idiots speaking to a machine

All of these are avoided in a chat-based interface. We still have the flexibility of a conversational interface but we still have all the power of our device at our fingertips. Plus, we don’t infringe on any social taboos.

Given the advantages, it’s small wonder that a number of players – primarily Facebook – are seriously plotting for the commercialization of chat based messaging services. There’s one other massive advantage that a stand-alone messaging interface has. The more activities we conduct through any particular interface, the greater the opportunity for personalization. I’ve always maintained that a truly useful “meta-app” should be able to anticipate our intent. That requires interactions across the broad spectrum of our activities. Previously only operating systems offered this type of breadth and because OS’s operate “under the hood,” there were some limitations on the degree of personalization – and through that, commercialization – that was possible. But an app we explicitly choose to use seems to be fair game for commercialization. It’s one of those unwritten social modality rules that advertisers are well advised to be aware of.

Between Messenger and WhatsApp, Facebook has a huge slice of the chat market. They just passed the 900 million user mark for Messenger alone. According to a recent study from the Global Web Index, over 36% of users have used Messenger in the past month, followed closely by WhatsApp at 34%, then Skype at 19%, Line at 10% and Viber and SnapChat at 7% each. These numbers exclude the Chinese market, which is dominated by WeChat, but it remains to be seen if WeChat can expand its base beyond Asia.

And leaked documents from earlier this year indicated that Messenger may soon introduce targeted ads. This hardly qualifies as a security breach. It’s more of a “Duh – ya think?” The rumor mill around the commercialization of Messenger has been going full steam in 2016. If chatting is the UI juggernaut it seems to be, of course we will soon see ads there. WeChat is well down this road, and it seems to be working like a charm, if the recent Smart Car promotion is any example.