What would make a social media user share content with his family and friends? What would entice him to click an external link? What type of content would be convincing enough to convert a “like” to an eventual sale? These are some of the questions that constantly bug digital marketers. Digital marketing, a subcategory of marketing, uses digital platforms such as Short Message Service (SMS), electronic billboards, social media, and apps to promote and sell products. In creating effective digital marketing strategies, it’s imperative to understand consumer buying behaviour.
“The brain is the organ of economic decisions. With behavioral economics, we want to use facts and constructs to reveal the limitations on computation, willpower, and self-interest,” says Dr. Colin Camerer, an experimental economist at the California Institute of Technology. Behavioral economics, or the “economics from the inside” of the mind, can be a useful tool for digital marketers.
If you’re an entrepreneur or head of an advocacy group aiming to reach your target audience, here are four things you should know about digital marketing trends and their correlation to behavioral economics.
The more the merrier? Not likely!
Is it okay to tweet about a product or service as often as you can? Dr. Richard Herrnstein, a Harvard psychologist, introduced the matching law in 1961 which states that the rate of responding increases with the rate of reinforcement. Dr. Michael Shermer, economist and author, challenged this theory. In his bestselling book The Mind of the Market, he shares that his experiments with lab rats revealed an under matching effect: the rats responded less to the variable-interval schedule with the higher rate of reinforcement than predicted by the matching law. “The more variables added to a choice, the more complicated the decision and the less predictable the behavior,” Dr. Shermer notes.
Google, the world’s largest and most powerful search engine, uses signals in ranking webpages. While it does state that regular and consistent posts help boost ranking, it’s still the quality of the content that matters. Knowing your target audience is key in knowing what type and how frequent you should be producing content. Tech-savvy millennials may respond well to daily tweets, but their parents may prefer a weekly SMS update.
Reinforce action via associative activation
Dr. Daniel Kahneman, winner of the Nobel Prize in Economics, dissected the irrational human brain in his New York bestseller Thinking, Fast and Slow. One concept that every marketer or digital marketing agency should know is the associative activation. This is a process in which ideas that have been evoked trigger many other ideas, in a spreading cascade of activity in the brain. How can does it work? Dr. Kahneman explains: “Each element is connected, and each supports and strengthens the others. The word evokes memories, which evoke emotions, which in turn evoke facial expressions and other reactions, such as a general tensing up and an avoidance tendency.”
The challenge for digital marketers lies in choosing each element for this complex set of mental events and how the feelings evoked can reinforce more ideas or action. Dr. Kahneman refers to this as being associatively coherent. You may have noticed that brands are producing high-quality videos not to showcase their products but to reflect on their core values and mission/vision. They’d run campaigns on social media about advocacies that matter to their consumer base.
Moral emotions and digital marketing
How can you incite action whether in promoting a product or an idea? What should be the core of your digital marketing tactics? The study of evolution teaches us that as humans, we choose other humans over nonhumans, family over non-kin, and friends over strangers because of our moral emotions. In making decisions, we consider our family values, and how it will impact the people around us. Moral emotions are traced from hunterer-gatherer communities where an emotional sense of “right” and “wrong” action evolved through genetic transmission of such traits. The Malaysian rainforest tribe Chewong believed in a system of superstitions called punen. When food is caught away from the village, a member of the hunter’s family touches the catch and everyone present, repeating the word punen. This practice generated a sense of right and wrong action as related to the success or failure of the community.
“Since morality principally involves our responses to others in social situations, we cannot separate the moral from the social,” says Dr. Shermer. Create campaigns that appeal to the moral emotions of your audience. For instance, brands targeting Asian consumers put emphasis on family closeness and a sense of community. Wrigley’s Doublemint launched a two-year campaign to promote the brand message of “closeness.” It partnered with the China Women’s Federation to encourage face-to-face time between parents and their children. To engage millennials, the company used microblogging network Weibo.
Marketing takeaways on competence
Sometimes, it’s the most evident factors that affect our marketing strategies that we don’t recognize. You may be busy producing a well-researched article, but you may be neglecting elements that can impact your brand’s credibility and competence more than the message in your content: your grammar and presentation. Proper grammar is one of Google’s ranking signals. It can also affect a person’s decision of whether he’ll deal with a company or not.
Dr. Alex Todorov, professor of psychology at Princeton University, found that people judge competence by combining two dimensions: strength and trustworthiness. His research suggests that the facial features that exude competence are a strong chin with a slightly confident-appearing smile. In producing digital market content, these physical attributes can be translated to the use of proper grammar, correct spelling of words, and the overall look of the webpage.
There is no secret to a successful digital marketing strategy. Even Google changes its algorithm every now and then, forcing marketers to constantly revise their tactics. However, it can help to have even a basic understanding of consumer behavior. Behavioral economics, or the study of human decision making, can guide you in choosing the digital platform to use, the types of content to post, and the methods to disseminate your messages. The human brain may be similar with Churchill’s Soviet Union — “a riddle wrapped in a mystery inside an enigma” — but with behavioral economics, it’s a little less mysterious.