Category Archives: Behavior & Psychology

The Evolving Whiff of Authenticity

I have a theory. Actually, I have several theories, but one in particular at the top of my mind today. I believe we are getting much better at sniffing out BS online.

In face to face encounters, we’re remarkably good at determining if someone’s authentic or not. We pick up cues, consciously and subconsciously, that allow us to make pretty accurate judgements as to the integrity and honesty of an individual. This “gut feel” that seems so vague is actually a sophisticated interplay of activity in various parts of our brain. Although we may not believe it, we’re all pretty good judges of character most of the time. It’s a survival mechanism. It’s not perfect, but it’s pretty good.

But what if we’re not face to face with someone? That is one of the challenges of the Internet. Often, we have to make judgements about information and the validity of opinions when we can’t see the person eye to eye. There is no editor on the internet, making sure everything we read is accurate and verified. It’s up to us to make the call. We have to act as our own editorial filters, reading between the billions of lines of HTML that are available to us.

Which leads us to something that was a little troubling to me that I heard this week. Every morning here at Enquiro, we have a “huddle” where we each share any news that we have heard that may be of interest to the team. Yesterday morning, Kyle Grant, who just returned from PubCon in Vegas, said he met a representative from a company that fakes blog posts. Basically, you feed the story you want spread about your product or service, and they hire a army of bloggers to post about it. It’s manufactured “buzz”.

Now, it’s not really surprising. As another team member mentioned, you can do the same thing with review comments, forum posts and other forms of commercial consumer generated comments. The door is open, so it’s natural that someone will figure out a way to squeeze through it and game the system. That too is part of human nature.

So, that really puts the onus on each of us to judge how authentic the content is we’re relying on online. And that get’s us back to my theory. I think we’re pretty good. I believe, in the relatively short time we’ve been online, we can pick up the “whiff of authenticity” or, conversely, the “whiff of BS” on most sites. We can tell what’s real and what’s manufactured. We can sort out the meat from the Spam. Like our face to face filters, they’re probably not perfect, but they work most of the time. We will be taken (as Lonelygirl15 showed) but sooner or later, we’ll get to the heart of what’s real.

The other thing that’s unique about the web is that we don’t have to rely just on ourselves to do this. For some reason, there’s still an unspoken law online that we will be diligent (in fact, virulent) about uncovering bogus garbage online. We revel in exposing the seedy underbelly of our culture. The internet has let a breath of fresh air into the previously stiffled world of media control. Before, we were expected to believe anything that came to us through the supposedly pre filtered channels that feed us our view of the outside world. The nightly news, the daily newspaper, the weekly news magazine. As was proven when Dan Rather’s journalistic integrity (or lack of same) was exposed online, we’re probably safer trusting the crazy patchwork quilt of information we get online than we are with the carefully spoon-fed news items we’re get every night through the networks.

Ultimately online, right will prevail, and it will do so much quicker than was true in the power controlled world of just one generation ago. We are less trusting and we are developing a much healthier cynical streak. Every time a door is open for all of us to have a voice, we will see parasitic companies scrambling to push through it, trying to capitalize on our collective gullability. And they’ll thrive, for awhile. But it’s a short term game, because I believe strongly that most times, we’re not as stupid as we look.

What Makes a Rumor so Easy to Spread?

urban-legend-rumorWe all want to be part of the next viral world of mouth success story. We want our product to be at the epicenter of a “buzz” storm that spreads like wildfire across the internet. But the conditions that lead to true word of mouth viral outbreaks dictate that these outbreaks are few and far between.

Jumping the Weak Ties

First of all, let’s look at what’s required for word of mouth to spread. The trick to a true viral outbreak is finding something that will jump the “weak ties”. Mark Granovetter identified weak ties in a social network back in the 70’s. Basically, social networks are not uniform and even. They are “clumpy”. They have dense clusters, comprised of people who tend to spend a lot of time together. These are family members, co workers, close friends, members of the same church or organization. Word spreads quickly throughout these clusters, because of the frequency of communication and the nature of the relationships between the members of the cluster. There’s an inherent trust there and people talk to each other a lot. This makes the social ties within the cluster strong ties. Given this, once one person in the cluster knows something, there’s a pretty good bet that everyone in the cluster will know it in a relatively short period of time.

But the challenge comes in getting a message to make the jump from cluster to cluster. How does word of mouth spread from one group of co workers to a church group in another town? To do this, we’re relying on social ties that are much weaker than strong ties. We’re counting on an acquaintance to pass word along. And for that to happen, some conditions have to be met first.

Lowering the Drawbridge

In 1993, Jonathon Frenzen and Kent Nakamoto followed up on Granovetter’s earlier work (Frenzen, Nakamoto: “Structure, Cooperation and the Flow of Market Information,” The Journal of Consumer Research, December 1993) to see the conditions that had to be met before a message would jump across a weak tie. In their words,

“Instead of an array of islands interconnected by a network of fixed bridges, the islands are interconnected by a web of “drawbridges” that are metaphorically raised and lowered by transmitters depending on the moral hazards imposed by the information transmitted by word of mouth.

In their study, they looked at a number of factors, including the nature of the message itself, and the concept of moral hazard, or how it would impact the messenger. For the test, they used news about a sale. In one social network, they saw how fast word would spread about a 20% off sale. In the other social network, they used a sale where the discounts were a more remarkable 50 to 70% off. To introduce a moral hazard variable, they also altered the availability of sales items. In one case, quantities were very limited, and in the other, quantities were practically unlimited.

What they found was that amongst strong ties, word of the sales spread fairly quickly in most instances. But when the message wasn’t that remarkable (the 20% off example), word of mouth had difficulty jumping across weak ties. Also, when moral hazard was high (quantities were limited) again, the message tended to get stuck within a cluster and not be transmitted across the weak ties.

Mexican Vacation Sale

Let’s use an example to make this a little clearer. Let’s imagine an airline is having a seat sale to Mexico. In the first example, it’s $50 off per seat, but it applies to every seat on the plane, on every flight. There is no limit on the inventory available. In the second instance, instead of $50 off per seat, the entire cost of a return flight to Mexico is just $50. That’s much more remarkable. And in the third instance, the sale is again $50 per person, but it’s limited to 10 seats on 2 flights, for one day only. Only 20 tickets are available at this price.

In the first instance, you would probably only pass along the information if someone happened to mention to you that they were thinking of going to Mexico. The information is not that note worthy. The value of information is not that great. There’s little chance that this would ever move beyond your “strong tie” cluster. It’s not something you’d go out of your way to mention to an acquaintance.

In the second instance, a $50 flight to Mexico is big news. And we’re socially predisposed to share remarkable stories. We believe it elevates our social status within our cluster. Every one likes to be the first to tell someone about something remarkable. It’s part of human nature. So we’ll go out of our way to share this information. We don’t even wait for someone to raise the topic. This is noteworthy enough that it merits bringing up in any context. It’s worth interrupting normal conversations for. Word will spread far and wide, across strong ties and weak ties alike.

But in the third instance, even though the news is remarkable, we personally have something to lose by spreading the story. There are only 20 seats available, so if we tell too many people, we might not get a chance to take advantage of the sale ourselves. Chances are, we won’t tell anyone until our seats are booked. And even then, we’ll probably only tell those we’re closest to. After we look after ourselves, our next inclination is to make sure those that are closest to us won’t miss out on the opportunity. Again, because of this “moral hazard” there’s little likelihood that word will spread beyond our strong ties.

Rumor has it

So, now that we know the limitations of message transmission within a network, depending both on the structure of the network and the cooperativeness of it, let’s look at one type of information that always seems to spread like wildfire through any social network, regardless of the circumstance: the juicy rumor.

Rumors have no moral hazard, at least, not for us. There are no limitations of quantity. We don’t stand to lose out (at least, not in a material sense. We’ll leave the ethical questions aside for now) by spreading a rumor. So that restriction is gone.
Secondly, the likelihood to spread a rumor depends on the nature of the rumor itself. First of all, does it involve people we know? Personal rumors about people we know are almost irresistible to spread. They beg to be passed on, again, because they put us in the position of “being in the know” and having access to information not available to everyone. Second to the personal rumor is the celebrity rumor. These are a little less “spreadable” because we’re not in the same privileged informant position. Also, although we know the people involved, in the public sense, we don’t really know them in the personal sense. When it comes to rumors, the closer to home they hit, the better.

Finally, we have the “juiciness” of the rumor. How sensational is the story? How remarkable is it? A rumor about your neighbor’s washing machine breaking down isn’t going to go too far. But an affair leading to a marriage break up, being fired from a job or a significant health issue, unfortunately, are stories made to spread. Because we’re human and inherently competitive, we love to spread bad news about others.

Fine Tuning the Rumor

And this brings us to an almost universal behavior seen whenever rumors tend to spread. We like to fine tune the story to make it a little more interesting. Rumors are subjected to “flattening”, “sharpening” and “assimilation”, just to make the story a little more sticky. Flattening is where we get rid of the details that get in the way of what we feel is the noteworthy aspects of the story. In some cases, the discarded details are contradictory and in some cases they’re just extraneous. Regardless, if they’re not pertinent to the main story we want to get across, or if they dilute the story, we toss them out.

Sharpening takes the remaining facts and enhances them a little (or a lot) to bring the story and it’s value as news into sharper focus.

Finally, assimilation is where we take the story and make sure it fits within our shared mental framework. We alter the story so it fits with ours (and our recipients) shared beliefs and views of the world. That’s one reason why rumors are so “spreadable”. We alter the story to ensure it’s interesting, and the further the story goes, the more irresistible it becomes.

The ultimate example of this are urban legends, where once there may have been a kernel of truth, but the stories have become so flattened, sharpened and assimilated through countless retellings that now, as intriguing as they are, they are basically manufactured fictions.

Negative Word of Mouth

We’ve always known that negative word of mouth spreads faster than positive. When we take what we now know about social networking and apply it, we begin to see why. For instance, negative word of mouth and rumors share a lot in common. There’s generally no moral hazard in play. In fact, the reverse is true. You’re actually helping people out by sharing this information, and you get a little retribution and revenge yourself. It’s a twisted win-win!

And for some reason, humans are much more likely to pass along negative information than positive. Again, it comes to our concept of social hierarchy and building ourselves up through the misfortunes of others. Admirable it’s not, but predictable? You bet!

And finally, the better known a company or brand is, the more likely negative word of mouth will spread. If there’s bad buzz circling about Nike, McDonald’s or Starbucks, we’ll all take part because all those brands are part of our shared frame of reference. We’ve already assimilated them.

By the way, remember that negative word of mouth will also be subjected to flattening and sharpening, as well as assimilation. So the negative buzz will get worse with each retelling.

Obviously, if you’re counting on word of mouth as your marketing channel, you have to take the reasons why word of mouth spreads into account. It can be made to work for you, if the conditions are right, but remember, this is not a process you have much control over. You can plant the seeds, but then human nature will take it’s course.

The Whys of Buy: Visualizing the Buy

Human brainVisualization risked becoming another one of those clichéd words through the 90’s, because it was used by every self improvement guru as a path to success. Visual success and it will be yours. But the fundamental principles of visualization bear up, in some very practical and surprising examples. And the neurological science behind visualization is sound.

Visualization allows us to sense a scene in our minds when we read a passage. Actually, the word visualization is a little misleading, because it only refers to the sense of sight. Visualizations can engage all the senses. For example, we took our two daughters to Manhattan last summer, landed at 11 pm, and because we weren’t tired, walked through Times Square at midnight. New York was in the middle of a heat wave and the temperature was still 98. The combination of heat and humidity added a particular edge to the smell of garbage in the streets, that sickly sweet/sour odor that punctuates the more appetizing smells wafting from restaurants and street vendors. Times Square was still going at full tilt (this was a Saturday) so the din of taxi horns was deafening. At every corner, we still had to elbow past street vendors and crowds jaywalking through the intersections. For my daughters, it was a rude sensory awakening to the Big Apple.

As I was writing that, feelings, sights, sounds and smells were being activated in my mind. I was recalling the images, and could, in my mind, feel the humid heat, smell the odors, hear the horns and see the crowds. If any of you reading this had been to Times Square on a hot summer night, you probably have your own scenes, from your own experiences, replaying in your mind. But the amazing thing is, if I say falafel stand, you can see, smell and perhaps even hear it. That’s because the same parts of your brain are firing that would actually be activated if you were physically there. Imagination is the next best thing to being there.

Athletes have long known this. Visualization starts building the same neural pathways that actual physical action does. A golfer struggling with his swing can visualize it and improve it, without a club in his hands, because he’s giving his brain a trial run. The same is true with a gymnast learning a new move. Studies have shown that imagining a 5 finger piano exercise results in a significant improvement in performance.

But perhaps the most startling evidence comes from a study done by the Cleveland Clinic Foundation in Ohio. Here, from About.com, is the summary of the study:

They split 30 healthy young adults into 3 groups.

For 15 minutes a day, five days a week for 12 week, Group #1 imagined exercising their little finger muscle. Group #2 imagined exercising their biceps muscle and Group #3 acted as a control group and did no imaginary exercise. Those in the first two groups were asked to think as strongly as they could about moving the muscle being tested, to make the imaginary movement as real as possible. The researchers measured muscle strength before, during and after the training sessions.

Group #1 (the finger exercisers) increased their strength 53 percent, and Group #2 (the biceps group) increased strength by 13.4 percent.

These results are somewhat unbelievable. Simply imagining exercise can make you stronger! Literally without lifting a finger. That’s the power of visualization.

So what does this mean for marketing? Visualization plays a part here as well. We often visualize our way through a purchase. If we’re looking at buying a car, we visualize ourselves driving it. If my wife is determined to buy a dress, she visualizes herself wearing it. Even if you are suddenly craving something from Starbucks, you can see, smell and taste the coffee before you ever get it in your hands. Visualization is a powerful part of purchasing, and once we build these neural pathways, it takes us much closer to the actual purchase. Smart marketers start building the pathways before you ever set foot in the store. That’s why personalized products can be so powerful. Personalization forces visualization.

Of course, visualization of product usage is nothing cutting edge. Most marketers do this instinctively. But what about visualization of the actual purchase itself? How can you start building the neural pathway required to ensure the transaction is completed? This is particularly important in more involved purchases, such as trips, cars, houses or more involved B2B purchases. In each of these cases, the very act of buying can act as an obstacle to a sale. It requires time, commitment and knowledge. For all these reasons, a little mental practice could improve the odds for success. Let me share another example.

In the 1960’s, social psychologist Howard Leventhal wanted to persuade a group of college seniors at Yale to get a tetanus shot. What he wanted to test was whether fear would be a more powerful influencer. So several information booklets were produced. Some were “high fear” with graphic pictures and descriptions. Some were “low fear”, with a more toned down, informational approach. The booklets were distributed and, somewhat predictably, the high fear booklets seemed to be more persuasive. The groups that received these booklets were more convinced about the importance of shots and more of them indicated that they intended to get inoculated. But one month later, almost none of the participants from any of the groups, high fear or low fear, had actually gone for an inoculation. A mere 3 percent had actually been inoculated. This was an unforeseen glitch in the experiment.

So Leventhal redid the experiment, but this time with one small change. This time, in all the booklets, he included a map showing where the clinic was and the hours it was open. This time, the inoculation rate went up to 28%.

If we look at the power of visualization, the thing that surprised Leventhal really isn’t that surprising at all. The first round of the experiment did a good job of inducing the visualization of consequences, in this case, negative consequences. The high fear booklet let the students visualize what might happen if they didn’t get a tetanus shot, and so it was persuasive. But it didn’t close the loop. It wasn’t that the message wasn’t persuasive. It was just that it left the door open for life to get in the way.

But the second version allowed the student to visualize the path required to actually get the inoculation. I’m sure most of them probably knew where the clinic was, but the inclusion of the map prompted them to visualize actually going there, and the hours allowed them to visualize where in their schedule they could fit in the visit. Once the students went through the mental process of visualizing action, there was a much higher probability that the action would take place.

What are the takeaways? If your purchase process requires a commitment on the part of the buyer, let them visualize the path required to get to the end. Use your website to build the path required to navigate through things like financing, negotiation, customer service, delivery and selection of products and options. Don’t just stop at visualization of ownership. Think about the visualization of the act of buying as well.

Passing the Tactical Torch to the New Kids

First published November 29, 2007 in Mediapost’s Search Insider

After the recent SMX show in London, I had a chance to have a wrap-up dinner with conference chair and Search Engine Land Executive Editor Chris Sherman. Chris and I, both feeling a little long in tooth, realized that there’s been a generational transition in search. The new generation is taking over the tactical stuff. As Chris said, “This blows away the traditional block and tackling stuff we used to do.” These are hotshots that live and breathe social media optimization, get a visceral rush out of an elegant link baiting campaign and measure their prowess through the number of Diggs they collect. They’ve taken organic optimization to a new level.

The Slow Surrender of the Sluggish Synapse

It was somewhat ironic, as I spent my sessions at SMX talking about things like bounded rationality, working memory and satisficing. To me, the working of the human mind is infinitely fascinating and that’s where I’ve been spending my free hours. I’m quite content to leave it to the up-and-comers to scramble up the listing hierarchy to grab the top slots. I’m more interested in what happens from the user side when they’re presented with those listings. Of course, I have the luxury of having a talented team working with me that can focus on the tactics while I play in my little strategic sandbox.

It reminded me of a passage I remember reading somewhere. A mathematician’s washed up by the age of 35 (I know, this is a point of controversy and I’ve read arguments on both sides, but I’m just using it as an example, so don’t get all worked up about it) but philosophers only hit their stride well into middle age. There’s a difference between sheer mental acuity and wisdom. Now that my synapses are slowing down, wisdom is really the only option open to me, so I’m grasping at it with both hands.

Wisdom: The Consolation Prize for Growing Older

I think it’s generally true that younger people tend to flex their mental muscles by solving puzzles of defined scope. They concentrate on the question ahead of them and revel in pushing the limits, punching holes in traditional thought and taking on risk that would prove unpalatable to a more pragmatic middle-ager, all in search of a solution that allows you to say, undeniably, that you’ve won. There are definitely winners and losers in the game of SEO. Number one is a winner. Everybody else is a loser, although in this case, the degrees of losing increase as you move down the page. It’s like sports. Nobody remembers second place. This appeals to the bravado of youth. SEO is for the young, and the young at heart.

But the question of who wins is a little more difficult to determine if you’re asking “why” questions. Why do people do what they do on search engines? Why do they make the decisions they do? Why do they pick certain brands over others?

I think unraveling the answers to “why” questions require patience and a more seasoned world view. There are fewer “aha” moments that signal victory. Answers are teased out little by little and added to the general body of knowledge about why we do what we do. The qualities that lend themselves to this approach come with age. They require being students of human nature. I’ve found that as I’ve grown older, I’ve become less frustrated with human frailty and more fascinated by human complexity. Of course, I’ve also become crankier. All of which makes me difficult to live with.

Search’s Big Picture: Step Back and Refocus

This trend also speaks to a maturity in the search space. It’s encouraging to know that search has started to develop a “big picture” that allows for strategic thought. Search was exclusively tactical in its early days, because its limited, siloed scope made it so. But now, search has become so integral in so many activities, we find overlap in almost everything we do. I can find much common ground in how we make decisions and how we use search engines. The top of this particular box is starting to open. And the broadening of approaches to optimizing search both as a marketing channel and as a human activity is healthy. As author Daniel Pink said, we need to develop our right-brain skills, “such as forging relationships rather than executing transactions, tackling novel challenges instead of solving routine problems, and synthesizing the big picture rather than analyzing a single component.”

So, as we walked down Edgware Street in London looking for a restaurant (we ended up finding quite a good Lebanese place), Chris and I talked about this passing of the torch and came to the conclusion that we’re okay with it. To be honest, I really don’t have a lot of interest any more in the tactics of search. That doesn’t diminish the importance of them; it just means that I’d rather do something else with my time. “What” doesn’t really capture my attention anymore. But “why”? Now there’s a question I can sink my teeth into. At least, while I still have teeth.

The Whys of Buy: Impulse Buying

chickenebayThe other day, we were talking about what makes us buy (an appropriate topic for today, the biggest shopping day in the US) and Barb Newman, our General Manager, wondered what made us impulse buy? She was trying to figure out why she had dropped way more money than she intended on a purse. Being intrigued by the buying mechanism that seems to be locked in our skulls, I decided to do a little digging to find out what’s going on when we just seem to pick up something off the shelf on sheer whim.

Spool’s Impulse Buying Study

On doing some digging, I found a study done by Jared Spool, a usability consultant I have a tremendous amount of respect for. And Jared found that market research, as I posted about a few days ago, has its limits. As Jared’s starting point, he looked at survey’s conducted by The Yankee Group and Ernst and Young. Both surveys asked why respondents would make impulse purchases on the web. With the Yankee Group survey, 75% indicated because of price. Ernst and Young’s survey said that 88% of purchases were made due to price. Again, these were surveys where buyers were asked to rationalize their behavior. And saving money seems like a pretty rational reason.

But Jared wanted to see what real people shopping for real products did. As most usability people do, he wanted to observe real world behavior. So his group got 30 people, who had real things they wanted to buy, gave them some money and sent them on an online shopping trip to a few preselected sites that had what they were looking for.

What they found was significantly different that what the Yankee Group and Ernst and Young surveys showed. While many of the participants bought what they were looking for, a significant number, 34%, also added other items into their shopping cart that weren’t on their original lists. Was it because the prices were irrestible? No, in fact, only 8% of the impulse purchases were because of price.

Jared and his group purposely picked out shopping sites that had promotional offers and seasonal sales in prominent display positions, especially on the home pages. But very few of the purchases were of these sale items. The impulse buys were spread across 41% of the sites in the study, including everything from pet shops to computer accessory stores. Almost none of the items were on sale. They were just things that suddenly tweaked the shopper’s interest.

Here’s the other interesting thing about the study. Most of the impulse items were chosen while browsing through the category pages. They had chosen a category based on what they were shopping for and had found related items that struck their interest and were subsequently added to their cart.

The Nucleus Accumbens Made Me Do It

So, why do we impulse buy? I’m still not sure, but here are some hunches, based on some of the other research I’m doing in the mental mechanics of buying.

A study earlier this year by Carnegie Mellon, Stanford and the MIT Sloan School of Management might be able to shed a little light on Spool’s findings. Using fMRI imaging, they also gave participants money to go shopping. They then monitored activity in various parts of the brain.

They found that when we anticipate buying something, the pleasure center, the nucleus accumbens, is activated. We begin picturing ourselves in possession of a product and visualizing ourselves using it. We start to build neural pathways that reinforce what it would be like to have the product. But, if the price is excessive, the study found that the brain has a shut off mechanism.  A part of the brain known as the insula is activated and the part of the brain we use to balance gains versus losses, in other words, is the product worth the price, the medial prefrontal cortex, begins shutting down. We literally put the purchase out of our mind because the price is more than we’re willing to pay.

So, let’s go back to Jared Spool’s study. I suspect we get into shopping “modes” where the parts of the brain associated with acquisition of a product sustain some activity. We’re prepared to buy, so the nucleus accumbens kicks into gear and keeps firing. We’re in “buy” mode. And we’ve accepted that we have budget available. We start out looking for the product we intended to buy, but, on the way, if we see something we also decide we need, especially in a related category, our “buying” mechanism is already activated. We’re already primed to consider purchase. We’re not looking for a bargain (although finding one certainly wouldn’t hurt), but by the same token, an outrageous price would probably shut down the process by kicking in the insula. Think of the insula as the brain’s sprinkler system, snuffing out any impulsive sparks before we burn ourselves. As long as the price is reasonable, and doesn’t introduce significant “pain” we’re more likely to purchase.

The fMRI study also showed that once we flip into buy mode, we tend to stay in this groove. This is why it’s much more dangerous to shop with credit cards than cash. Credit cards allow us to put off the “pain” that might kick in the insula, letting the nucleus accumbens have its way. When cash runs out, it runs out. It forces us to pay more attention to the “pain”.

In Spool’s study, the pain had been effectively removed by giving the participants money to spend. And by browsing through categories where they already had interest, there was a greater likelihood to pick related products and purchase them through impulse. Bargain basement prices really had nothing to do with the process. It’s just that most of us don’t understand the mechanics of buying that happen at the subconscious level.

Back to Barb’s Purse

So let’s get back to Barb’s purse. Was it really a impulse buy? Well, not really. As I chatted more with Barb, she indicated that she had seen the purse earlier in a magazine, fallen in love with it, but the price was much higher than she wanted to pay. So Barb’s nucleus accumbens had gone into overdrive, but Barb, being a practical shopper, had quickly doused the flames when her insula kicked in. The pain was too great to make a purchase.

But, a few months later, she’s in the mall and sees that the store that carries the purse was having a 25% off everything in the store appreciation sale. Suddenly, the nucleus accumbens is reactivated, primed by all the visualization that Barb had done since first seeing the purse, thinking how great it would be to own it. The 25% off sale lowered the pain threshold enough to keep the insula from kicking in, and the next thing Barb knew, she had put down a deposit and put the purse on layaway. She didn’t know what hit her. Now, she knows it was a little bit of gray matter hiding deep in subcortal brain called the nucleus accumbens that’s to blame. But this wasn’t a true impulse buy. It was more like a delayed buy.

So, if you overspend today, remember, it was the nucleus accumbens that made you do it. Try explaining that one to your significant other.

Why We Have to Keep Doing Market Research

Following up on my previous post about the problems with most market research, here’s a plea why we should keep trying to get it right.

At the recent London SMX show, I presented on the Ad Testing and Research panel. Like other times I’ve done this panel (this is probably the 3rd or 4th time) I hear about skillful practitioners employing various A/B and multivariate testing methodologies. Ad testing is a definite must do, but before my presentation, which came at the end of the session, I took a few minutes to provide an alternative point of view.

I asked the small crowd how many of them were doing regular campaign management, checking click through rates, conversion rates and optimizing their campaigns based on what they saw. Almost everyone put up their hand. Then I asked how many did A/B testing. This time, a little more than half put up their hands. Next, I asked how many were doing multivariate testing. This time, about one third of the crowd. Finally, I asked how many had actually sat, watched a customer interact with their site and then asked them questions. We dropped down to about 10% of the group, and most of these were in a fairly structured usability test, with limited or no opportunity for interaction with the user.

Now, campaign optimization, A/B and multivariate testing are all best practices and should be done religiously. But I urged the marketers in the room to step back from their data heavy, spreadsheet  bound view of the world and pick up a book on cognitive psychology, social science or simple usability. Better yet, spend some time just watching how real people interact with your site. Try, for a moment, to look at the world through your customer’s eyes.

The problem with the typical, quantitative methods are that they’re all lagging indicators. You don’t get an idea of what’s happening until after customers have interacted with your ads and your site. You generally get a good sense of what they did, but it’s very difficult to determine why they did it. To do that, you have to dig beyond the numbers. You have to try to get into that subconscious mind. And that’s not easy. Typical market research methodologies won’t cut it. To get some idea of what’s required, read Clotaire Rapaille’s The Culture Code, or Gerald Zaltman’s How Customer’s Think. Do some digging into the work of Herbert Simon.  It takes a deft combination of psychiatric know how and detective skills. But here’s why it’s worth it.

For the past Century, we’ve largely refined our marketing practices based on trial and error. Pretty much everything has been done through seeing what’s worked, changing something, and seeing if it worked better. That’s been okay, as long as the channels we used to reach customer’s were relatively limited. With limited channels and a certain amount of control inherent in the process, we could do this. But those days are over.

Now, rather than a few controlled channels that run pretty much straight from the advertiser to the customer, we have an explosion of information that turns the typical buying process into a Gordian knot of unbelievable complexity. We can’t control the variables anymore. When there are so many channels, so many interdependent factors and so much of it affects customers below the conscious level, trial and error is just not an effective testing methodology anymore. In fact, it was never an effective methodology, for all the reasons I stated in my previous post. It’s just the best we had.

Let me use another example. The way we did marketing was pretty much like jumping in a car, randomly making decisions whether to turn right or left, keeping track of our success rate in getting nearer to our destination, and using this method to eventually pick the right route. This method might eventually work okay in a town of a few thousand people, but try doing that to navigate through New York or Los Angeles. We don’t have enough time in our lives to leave this much to chance. A map (or better yet, a GPS) is a much better alternative.

But we’re just starting to put that map together. And it won’t come from market research. Market research, at least in it’s current incarnation, is hopelessly flawed. It will come from diving deep into the workings of our brains. And once we begin putting the map together, it will allow us to begin to measure leading indicators. It will keep us from the trap of relying on self reported rationalizations and dig deeper into all the activity that’s happening below the conscious surface of our minds. That’s where the answers will be found.

Here’s another reason. Our brains are not only complex, but they’re also highly adaptive. As we do new mental activities more often, and abandon previous ones, new routes are established through the neurons and old ones become overgrown and eventually, unused neurons are cut away. It’s called “pruning” and “neuroplasticity”. It’s probably why you’re much better at using a search engine now than you are doing the geometry you learned in grade 9. We’ve worn new paths in our brain.

This is also true of how we’re buying. The way we buy now is bearing little resemblance to the way we bought in 1975. As time goes on and we rely on the Internet more and more, the paths that we used to use for our consumer decisions will become overgrown and we’ll clear new ones. This will happen not only at the conscious level, but also the sub conscious level. We will literally rewire how our brains decide what to buy. So the body of market research that has laboriously been gathered over the past several decades will become obsolete. And to discover those again through trial and error will be an long and potentially impossibly task.

So, a word of advice. Step back from the spread sheet now and again. Take a break from looking at “what” and start to explore “why”. Dig into things like the triune brain, selective perception, bounded rationality, working memory and some other basic cognitive concepts. It will be time well spent.

What’s Wrong with Market Research

sharingbrainWhen we first started doing research at Enquiro into how people used search, we found very quickly that what people say and what people do are very different things. It just happened that we were doing a survey and a focus group at roughly the same time. In the survey, where we got the results first, we asked if things like the position of a listing was important in whether people read it or not. We asked people to rank a number of factors on their relative importance, including position, relevancy and trust in brands and vendors shown. Almost without exception, in the survey, people indicated that relevancy was the key factor. They also indicated that they read listings pretty carefully and gave a fair amount of thought before selecting one. Finally, many said they would never click on a paid listing.

Then, we invited about 30 people into our labs and actually recorded their interactions with the search engines (before our eye tracking studies) and it quickly became obvious that how they said they used a search engine and how they actually did were two different things. The vast majority of clicks happened in the first few listings. Many who indicated they wouldn’t click on paid listings actually did, and perhaps, most interestingly, the average interaction was around 10 seconds or so. Subsequently, we’ve seen this type of behavior repeated in eye tracking after eye tracking study. Of course, the famous golden triangle study we did with Eyetools and Did It, and subsequent ones conducted by Enquiro, have shown over and over how quickly we interact with a search engine and how much of our scanning activity is “top loaded”. Also, we don’t really skip over sponsored listings, but in some circumstances (research based activity) we’re less likely to click on them. We’ve used this body of research to come up with a fairly consistent model of how people interact with search results. The results belie what people indicated in our very first survey. Well over 60% of the clicks happened in the first 4 or 5 listings, including the top sponsored ones. People generally spent just a few seconds on the page (around 10 to 12 seems to be the average) in which they scan (not read) 4 to 5 listings. There was almost no deliberation. People click quickly, and if they don’t like what they see, they click back. It would take the average person about 2 minutes to actually read all the results on the average search results page. Even if we just read the top 4 or 5, we’d be spending about 30 to 40 seconds on the page. It takes about 7 seconds to read one listing. But we don’t spend much longer than this covering 4 to 5 listings, about 2 seconds per listing. Obviously, we don’t give a lot of thought to the credibility of the search listings.

So, were all 1600 of our original survey respondents liars? Were they intentionally misleading us? No, they were just being human.

What we found was the systemic fault with almost all market research. And there’s a very good explanation for it. We’re generally not aware of 95% of what we do or why we do it. That’s because much or what we do is hidden in our subconscious. I’m currently reading How Customers Think by Gerald Zaltman and he pinpoints the problem with traditional market research. In almost every case, we ask people to tell us, either verbally or through writing, what they’re thinking. Just by doing this, we kick in the cortex, the rational seat of our intellect. But Zaltman tells us that at least 95% of every decision is made subconsciously. There, in the murky depths of our brains, predating the evolution of our cortex by many millions of years, thoughts are created through tremendously complex connections of memories, beliefs, instincts and intuition. In many cases, our decisions are made long before they bubble up to our conscious minds. The conscious mind exists to put a little polish on them and, in most cases, to rationalize a decision that was largely based on primal instincts. We may have done what we did because our flight or fight mechanism kicked in, or because our need to procreate surfaced. That’s why we chose the minivan, or the red convertible. It really had nothing to do with the Consumer Reports rating. But, being highly evolved humans, we convince ourselves that our choices are much more rational than those of a lizard (our basic brain core, which rules many of our decisions, is basically the same as a reptile’s brain).

In our case, our initial respondents indicated that they deliberated over which search result they chose. In actual fact, there was little risk in choosing a wrong link (it’s not like our lives, our family or our money is at stake), so we cut off the amount of deliberation we did and after a quick scan, picked the result that seemed to be most relevant to our intent. The lack of deliberation wasn’t lack of intelligence, it was a survival instinct bred into us by eons of evolutionary refinement. If there’s no immediate risk to us, why should we kick in our brains and spend unnecessary time and cortex processing power to come to the optimal decision. It’s not required. A simple scan and click will suffice. Our brains are simply doing what they’ve been programmed to do. And it’s not that the decisions are bad. As Malcolm Gladwell shows in Blink, often these decisions prove to be better than the ones that we endlessly deliberate over. Our brains, especially the 95% that remains under the surface, are amazingly adept at making good decisions.

But there’s a more fundamental issue here. If what we experienced in search is typical in all market research (which it is) how do we ever find out how people actually make purchase decisions?

This is a significant challenge, the extent of which might not be obvious at first glance. Let me use an analogy to further illustrate. Remember the tale of the shoemaker and the elves? Let me use that and adapt it slightly for my purposes. For those of you unfamiliar with the story, a poor shoemaker only has enough leather left for one pair of shoes. He cuts the leather and lays it out for stitching the next morning. He awakes, amazed to find the shoes made, and meticulously crafted at that. Elves apparently helped out during the night, soon to bring fame and fortune to the shoemaker.

But what if the elves didn’t exist. What if, instead, the shoemaker was actually making the shoes in his sleep? The idea is not so ridiculous. Rumor has it that Coleridge actually wrote Kubla Khan during a dream, and managed to scribble it down before it faded from his consciousness. As any psychiatrist will tell you, we’re closest to our subsconscious when we’re hovering between sleep and wakefulness. It’s about the only time we get a glimpse into those murky depths.

So let’s say our shoemaker actually makes the shoes in some bizarre bout of sleepwalking. He awakes every morning, to find the shoes nearly perfectly finished. All he needs to do is add the laces and a bit of polish. And the shoes are fair more carefully crafted then he could ever accomplish while awake.

The shoemaker really isn’t aware of where the shoes come from. In fact, as time goes on, and as he receives more and more recognition for the quality of his workmanship, he begins to believe that it’s solely due to the little bit of work he does while he’s awake, threading the laces and adding a little polish. He learns to ignore the 95% of the work that’s done while he’s asleep.

Now, imagine someone comes to ask him why his shoes are so exceptionally crafted. Would he admit the truth and say he doesn’t know? No, pride and genuine lack of knowledge would keep him from saying that. He has no idea what he does while he’s asleep. It’s almost as if someone else did the work for him. His conscious brain would kick in and come up with some perfectly rational but completely untrue explanation. Clotaire Rapaille, in his book The Culture Code, cites an example of this:

In a classic study, the nineteenth-century scientist Jean-Martin Charcot hypnotized a female patient, handed her an umbrella, and asked her to open it. After this, he slowly brought the woman out of her hypnotic state. When she came to, she was surprised by the object she held in her hand. Charcot then asked her why she was carrying an open umbrella indoors. The woman was utterly confused by the question. She of course had no idea of what she had been through and no memories of Charcot’s instructions. Baffled, she looked at the ceiling. Then she looked back at Charcot and said, “It was raining.”

This is what happens in almost every instance of market research. Our buying decisions are like the shoemaker’s shoes. They’re usually quite good, but we have little idea how they came into being.

For most of the history of marketing, we’ve been restrained by the limitations of market research. It’s only recently, through advancements in cognitive psychology and brain scanning technologies that we’re beginning to get a glimpse of what might actually be happening. My next post (tomorrow) why it’s important that we keep trying.

Satisficing, Bounded Rationality and Search

150px-HerbertSimonHerbert Simon came up with some pretty interesting concepts, among them satisficing, bounded rationality and chunking.

Before Simon, we commonly believed that humans came to optimal decisions in a rational manner, based on the information provided. We took all the data that was accessible, weighed pros and cons and used our cortexes to come to the best possible outcome.

Simon, in effect, said that this placed to high a load on us cognitively. In many cases, there was simply too much information available, so we had to make choices based more on heuristics, cutting the available information down to a more manageable level. He called this “satisficing”, a blend of satisfy and suffice. And Simon started saying this a half century ago. Imagine how this translates to the present time.

We have never had more information available. At the click of a mouse, we can access huge amounts of information. There’s simply no way we can process it all and come to rational decisions. And this brings us to another concept, that of bounded rationality. We’re more rational about some decisions than others. It depends on a number of factors, including risk, emotional enjoyment and brand self identification. Think of it as a chart with three axes. One axis is risk. We put more rational thought into decisions that expose us to greater risk. In consumer decisions, risk usually equates with cost, but in B to B decisions, it could also include professional reputation (related to but not always directly tied to cost). We’re going to put a lot more thought into the purchase of a car or house than that of a candy bar. Another axis is emotional enjoyment. This is a risk/reward mechanism to most decisions, and if the reward is one that is particularly appealing to us, we tend to be swayed more by emotion than rational decision. If we’re planning a holiday, we may make some irrational decisions (or at least, they might appear that way to an outsider) based on a sense of rewarding ourselves. We’ll treat ourselves to a few nights in a 5 star resort, when the 3 star resort would offer greater overall value. The final factor, and one that is usually buried somewhere in our subconscious, is how we use brands or products to define who we are. Now, no one usually admits to being defined by a brand, but we all are, to some extent. This touches on the cult-like devotees that some brands develop. Harley Davidson, Rolex, BMW, Apple and Nike all come to mind. Is a Rolex a rational choice? No. But a Rolex defines, to some extent, the person wearing it. It says something about the person.

Bounded rationality says that there are boundaries to the amount of rational thought that we can and we want to put into decisions. The amount we decide is sufficient depends on the three facts discussed.

Now, the use of Search tends to plot somewhere along this 3 dimensional chart. If risk is high and brand identification is low (buying software for the company), there is a high likelihood that search will be used extensively. If risk is low and brand identification is high (i.e. buying a soft drink or a beer) there is almost no likelihood that search will be used. In this case, the two factors usually work inversely to each other. Emotional enjoyment isn’t as directly tied to search activity. We will do as much (or as little) searching for a purchase that will give us great enjoyment as for those that won’t.

It’s interesting to watch how these factors impact search intent and behavior. Satisficing leads to a classic sort of search behavior, what I call I category search, where we use fairly generic, non branded queries that broadly define the category we’re looking at. Let me give you an example. Tomorrow my wife and I are headed to Europe for a week. We’re going to spend a few days in Portugal, then fly up to London for SMX (where I’ll be talking more about these ideas in some of my sessions). We’re flying into Lisbon, then renting a car and driving down to the Algarve region. I have GPS navigation software for my PDA, but only for North America. I wanted to get European software, but because of the limited use of it, I didn’t want to spend too much. The developer of my North American software didn’t make a EU version, so I turned to search to find a suitable candidate. Here there was no brand identification, some degree of risk (if it didn’t work in Europe, I’d be lost, literally) and no emotional enjoyment factor. My first search was what I call a “landmark” search. I wanted to find some sites to plot the landscape. Sites that listed and compared my alternatives would be ideal matches to my intent.

I searched for “pocket pc gps software”, knowing that “gps software” would be too broad. I soon found the sites were pretty much all about North American versions. Few of them offered or reviewed European versions. I spent several minutes on the TomTom site trying to order a European version from Canada but to no avail. Apparently TomTom doesn’t believe people in North America would ever choose to drive in Europe.

In classic “satisficing” behavior, I wanted to cut my research workload by setting some basic eligibility criteria: it had to work on a Pocket PC, it had to be reasonably priced (under $100 preferably) and it had to offer coverage for all of Europe (we’re going back to France and Italy next year and I’d like to use it then as well). My next search was for “pocket pc gps software europe”. This gave me what I needed to begin to create my satisficed list. Ideally, we want 3 or 4 alternatives to compare. I did find the TomTom choice, but I was already frustrated with this, and the price was over my threshold. Destinator also offered an alternative that seemed to be a little better match. It matched all the criteria, appeared to have some decent reviews and was available on eBay for about $75, including shipping. Sold! Was it the optimal choice? Maybe not. If I had spent hours more doing research, I could have probably found a better package or a better value. But it was good enough.

Chunking has to do with cognitive channel capacity, and the amount of information we can store in our heads, accessible for use. Again, we tend to maximize the available slots by creating chunks of information, grouping similar types of information together.

When you look at Simon’s work, even though the majority of it far preceded search engines, it sheds a lot of light on how we use search in a number of cases. If you want to tap into user intent, I would recommend finding out more about bounded rationality and satisficing. Chunking is probably worth a look as well.

Interfaces are only Skin Deep

Steve Haar had a great comment on my post about Ask breaking through in the search market share battle:

I agree about the interface being much better with Ask. But, what about the search results? I took a look at them compared to the others and, between sites for adsense and dead links, the results were so poor I was embarrassed for them. I wonder how many of the searches were from repeat users vs once and gone?

I think Steve points out a fundamental concept that we might tend to forget from time to time. The best interface on a piece of garbage just gives you nice looking garbage. Now, I’m not saying that Ask is garbage. But I’ve seen some cases (and heard anecdotally many more) of some issues with spam and I do think they have some work to do. Ultimately, it’s the quality of the results that will determine marketshare. In fact, a nice interface on top of poor results will kill Ask quicker than ever, as it draws more trial users (as Steve alludes to) and generates more negative word of mouth. This is exactly what Ask doesn’t want to happen.

I’m the first to speak up about the importance of the user experience, but it’s important to remember that the interface is only one small part of that. Ultimately, there needs to be enough under the hood to meet and exceed the user’s expectations. Steve (and others) are indicating that Ask might be falling short in the relevancy horsepower department.

The Other Long Tail of Search

smallcoverIn 2006 Wired Editor Chris Anderson released The Long Tail, and suddenly we were finding long tails in everything. The swoop of the power law distribution curve was burned on our consciousness, and search was no exception. Suddenly, the hot new strategy was to move into the long tail of search, those thousands of key phrases that individually may only bring a handful of visitors, but in aggregate, can bring more than the head phrases. At Enquiro, we were no exception. But lately, I haven’t heard as much about long tail campaigns. And I think it’s because our thinking was a little flawed.

One of the key elements of a long tail marketplace is that there can’t be a scarcity bottleneck. Shelf space has to be unlimited, production, distribution, etc. The economics of supporting a long tail have to make sense. There has to be little to no overhead in making a vast selection available to the market. The ideal example is digital entertainment. Once an MP3 is encoded, the only overhead for the distributor is a couple of megabytes of storage capacity.

That’s just not true in search management. It takes time to set up a campaign for a keyword. It takes time to organically optimize for it. There’s significant campaign management overhead associated with search. From a resource perspective, search marketing is expensive, and as anyone who’s tried to recruit a search marketer can tell you, there is no abundance mentality at play here. Sure there’s thousands of keyphrases that may potentially bring one or two visitors a month, and if you add them up, it would be hundreds of thousands of potential leads, but we just can’t move from the head to the tail because we don’t have the time.

Engines tried to open up the bottle neck by offering broad match, but results from broad match campaigns are dramatically less than spectacular. In many cases, we needed to go back to the more granular control that comes with exact match to keep performance levels where we needed them to be.

But in perusing some of our spreadsheets from past studies, and with Anderson’s Long Tail curve fresh in my mind, I found another long tail in search. In several studies, we’ve tracked click throughs by position. Look what happens when you take the most popular click through position, the number one organic spot, and then work down by position:

clickthrough tail

As you can see, we have another long tail. Now, due to the scale of the graph, it looks like the tail goes to zero. This isn’t the case, but by the time we get to the second page of results, we tend to hit percentages that are fractions of 1%. As long tails go, this is skinnier than most, showing the power of position on the first page of results.

But now let’s combine the two long tails. If you take the head being a #1 organic ranking for your most popular phrase, and work down from there, the results get quite dramatic. For the sake of this example, I’ll move down one position for each keyword. Here’s a table showing the numbers:

Keyword Volume Position X Click Through % Clicks
#1 46500 Org 1 26.35 12252
#2 38450 Org 2 13.05 5017
#3 32500 Org 3 10.2 3315
#4 23400 Spon 1 8.75 2047
#5 15750 Org 4 5.35 842
#6 12450 Spon 2 4.125 513
#7 8750 Org 5 3.875 339
#8 5250 Org 6 2.875 150
#9 4325 Side 1 2.5 108
#10 2750 Org 7 1.875 51

Now, let’s plot that on a graph:

clickthrough tail2

Given that search is a resource hog in terms of manpower, I argue that we’d be far better working our way up the tail rather than down it. And by moving up the tail, I mean the click through by position tail. By moving up the page, even a position or two, with relatively popular keywords, you can leverage the compounding effect of the two curves and dramatically improve your campaign performance.