Internet users are wising up to persuasive "nudge" techniques

Every now and again, a company will come up with a product "innovation" that seems to deprive people of their free will, driving great masses of internet users to look for Pokemon, or tend virtual farms, or buy now with one-click, or flock to Upworthy-style "You won't believe what happened next" stories, or be stampeded into buying something because there are "only two left" and "14 people have bought this item in the past 24 hours."

These techniques, "nudges" drawn from behavioral economics, can exert a powerful pull on the public, driving unconsidered and even compulsive behavior.

But marketing techniques don't age well: once you encounter a trick a few times, it starts to lose power, in the way that so many phenomena regress to the mean. Behavioral marketers know that they can prolong the efficacy of these techniques with "intermittent reinforcement" (that is, using each technique sparingly, at random intervals, which make them more resistant to our ability to grow accustomed to them), but marketers have a collective action problem, a little dark-side Tragedy of the Commons: it's in the advertising industry's overall interest to limit the use of techniques so that we don't get accustomed to them, but any given marketer knows that if they don't use the technique to exhaustion, some other marketer will, so each marketer "overgrazes" the land (that is, us), in order to beat the others.

Shoshanna Zuboff's theory of "surveillance capitalism" is grounded in the idea that these interventions will gain effectiveness over time, and that marketers will discover powerful new persuasive tools with machine learning. But the trend is going the other way: despite the success of Farmville, Pokemon Go and Upworthy, none of the companies behind them managed to prolong the techniques they pioneered, nor have they discovered more techniques that work as well, making it seem like they just got lucky. Meanwhile, Zuboff is less skeptical of monopoly and market concentration, and of state surveillance (including states that spy by hijacking the data gathered by commercial services).

I think if we're worried that markets will break down because consumers will lose the ability to make choices that shape them, then we should be worried about monopolies much more than algorithmic persuasion techniques. We adapt quickly to the latter, but when it comes to monopoly, the effects are enduring: once Amazon kills all the businesses that might compete with it, it doesn't need to persuade us to buy from it -- it's the only game in town.

Two thirds of the British public (65 percent) interpreted examples of scarcity and social proof claims used by hotel booking websites as sales pressure. Half said they were likely to distrust the company as a result of seeing them (49 percent). Just one in six (16 percent) said they believed the claims.

The results surprised us. We had expected there to be cynicism among a subgroup—perhaps people who booked hotels regularly, for example. The verbatim commentary from participants showed people see scarcity and social proof claims frequently online, most commonly in the travel, retail, and fashion sectors. They questioned truth of these ads, but were resigned to their use:

“It’s what I’ve seen often on hotel websites—it’s what they do to tempt you.”

“Have seen many websites do this kind of thing so don’t really feel differently when I do see it.”

In a follow up question, a third (34 percent) expressed a negative emotional reaction to these messages, choosing words like contempt and disgust from a precoded list. Crucially, this was because they ascribed bad intentions to the website. The messages were, in their view, designed to induce anxiety:

“… almost certainly fake to try and panic you into buying without thinking.”

“I think this type of thing is to pressure you into booking for fear of losing out and not necessarily true.”

Consumers Are Becoming Wise to Your Nudge] [Jon Jachimowicz/Behavioral Scientist]

(via Marginal Revolution)