Behavioural Economics and What Lies Beyond

Mark Earls, Founder of HERD consulting, was not in the original line-up of the book but once he had joined us at Creative Social Paris and ran one of the most fun sessions we ever had, I realised that we had to get him in there. Obviously behavioural economics has been big on the agenda her in the UK (thanks to Rory Sutherland) and am hoping that hanging around with the Herdmeister enough, I will work out how to integrate behavioural economics into communication strategies. In the meantime I hope you enjoy Mark’s essay:

Technology is the most marvelous thing: not just for what it does or even what it enables us to do but also for what it reveals about us and who we really are.

Four hundred years ago, optical lenses were the technology du jour. When combined together in pairs (enclosed in a simple wooden tube), these slivers of seventeenth-century Silicon Valley greatly increased the distance a pair of human eyes could see – from at best a handful of miles to the almost unimaginable distance that the stars in the night sky seemed from us. Not only did this “telescope” enable individual astronomers to see things previously unseen – new planets, moons, and comets as yet unimagined – but when deployed by an eager distributed user base from the Thames to the Danube making disciplined observations of the movement of the heavens that we were not who we thought we were (or at least, we did not sit where we thought we did which was almost the same thing): far from being the centre of the universe (and thus of God’s creation), this simple technology demonstrated that we sit in the cosmological equivalent of a rusty lock-up on an abandoned industrial estate on the edge of a forgotten provincial town in the land that time forgot.

And this uncomfortable little insight into our place in the universe in turn kick-started a whole flood of social and political changes on which our modern world is built – things like democracy, for one. No simple ground lenses, no internet, if you like.

A very similar thing is happening today: the technology that we in the digital world are exploring is telling us some pretty important things about ourselves and helping us redraw the map of what it is to be human and how human behaviour is shaped and spreads. For example, for much of the last two or three centuries, we’ve been taught that what separates our blessed species is our ability to think independently, using our powers of reason to shape our own destiny. This is – or should be – the proper way for humans to behave: collect and weigh the information, and then make a rational choice about what to do. Rene Descartes, Adam Smith, and my mother all agreed: think before you act.

But anyone who has spent any time working in the digital space knows that the last thing you want people to do is think about something; you want them to do stuff. Too much thinking, too many clicks and you’ve lost the user. Far from being the rational deliberator of received wisdom, digital teaches us very quickly how lazy most humans are. To paraphrase Daniel Kahneman, the spiritual leader of the new discipline known as behavioural economics, humans are to thinking as cats are to swimming: we can do it if we really have to, but we’ll do all we can to avoid it. And, as the fantastic personal financial confessional A Mathematician Plays the Stock Market by John Allen Paulos (one of the world’s greatest mathematicians) shows, all of us are subject to a host of cognitive biases and tics that distort our view of the world and lead us not just into temptation but into trouble time and time again, however rational our thinking and precise our calculations are. Paulos lost his shirt on investments in stocks like Enron and WorldCom due to the biases and errors built into the design of his all-too-brilliant mind.

Working in the digital space throws up evidence of this kind of insight into human behaviour all the time. Perhaps this is why it is those with a keen interest in digital who most fervently champion the books and the papers that behavioural economists are writing (take a bow, Rory Sutherland). What’s more, if you’re looking for better insights into human behaviour to shape your work and its effectiveness, you could do a lot worse than dig into the larder of wisdom and insight that is behavioural economics (I particular like those easy-to-use lists of biases and quirks).

And yet, all is not as it should be in the digital garden. Too many of us are still using ideas about human behaviour transposed (uncritically) from the old world. Take, for example, the notions about influentials and influence being peddled by the social media gang. On the one hand, the science is quite clear that most human social networks are not structured in the hub-and-stroke way that the influential hypothesis would require; on the other hand, things are a lot messier in the real world on- and offline. Influence is often mutual and many-directional. It’s not a one-way street, like some kind of human-enabled information micro-broadcast system!

These qualms aside, folks who are working in digital are already doing much of the heavy lifting in charting the next version of the human map – the one that goes beyond seeing us as either calculating robots (that classical economics suggests) or quirky, miscalculating ones (that behavioral economics describes). And this is all about the social. As a community, we’ve already demonstrated how fundamentally social human beings are through the widespread adoption of the connective technologies we have championed and our attempts to create contagious content and behaviour to spread across the social systems these technologies enable. Without this noise around the social side of digital media, much of the science that I and people like me have been championing would not have gained the general currency it has in mainstream advertising, in business, and in society at large. You wouldn’t be reading, as I seem to do almost daily, that it is now widely acknowledged that we are fundamentally a social species. For this, I thank you all.

But the next step is to help the rest of the advertising world and society at large to really understand what it means for humans to be fundamentally social. All too often I get the impression that when I talk about this idea, what folks take away is the idea that humans like going out to bars a lot (which is, of course, true but only a small part of the argument), but at heart they’re still independent creatures.

No matter how much science is published (and republished and reinterpreted by folks like me) – science that repeats this “social idea” – it’s only by folks, like the digital community, developing ways of talking about and interacting with humans as social creatures. These are individuals embedded forever in complex social systems that the rest of business and society at large are going to be able to get to grips with the science and what it tells us about ourselves.

And you thought digital advertising was just a fun thing to be doing, eh?

Extract from Digital Advertising: Past, Present, and Future

About Mark Earls
Mark Earls is a recovering account planner whose HERD consulting is at the forefront of understanding and applying leading-edge behavioural and cognitive science to help marketers understand and shape human behaviour more effectively. Previously, Mark worked in agencies radical (St Luke’s) and just plain big (Ogilvy Worldwide) but is much better now (thank you). His writing is widely read and awarded: e.g., his latest book (HERD) explores human behaviour through the lens of what science tells us about our fundamentally social nature. Mark has to keep working to pay for his sad addiction to English cricket. Follow him @herdmeister.

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