Behavioral Economics and the Advertising Craft

Turns out advertising isn't all about easels and boards.

I was reading an article in Forbes which discussed the overall opportunity marketers have by tapping into behavioral thinking; it got me to thinking:

From economists long dead

Too long the marketing and advertising profession has works along side creative alchemy and mathematical voodoo.  In the past decade there has been a strong push to better understand the voice of the consumer, run models that enable brands to better price their wares and let marketers better push through the value proposition in an enticing and buzz-worthy way.

As the article points out, Adam Smith, godfather of 18th century political economic thinking (remember The Wealth of Nations? The invisible hand?) and 20th century Irving Fisher (Utility theory) and  Vilfredo Pareto (Pareto principle, or the 80-20 Rule) believed that human psychological engagement in rational decision making could negatively impact the economy, not out of malice, but because the human psyche is a subjective beast.  And due to its subjectivity, naturally academic theorists believe that it is a problem with a solution.  Is it?

From the human mind, with love

Nassim Taleb (of Black Swan fame), along with contemporaries like Laurie Santos and Paul Dolan, believe that the human element in rational economics is something that can be studied, isolated and, perhaps, extracted.  

Ultimately the thinking comes down to looking at patterns, process and decision analysis.  But does this get to the heart of the human decision, or is this a study that better illuminates the structure in which these decisions are made?  If a starving man is presented with a bowl of Brussels sprouts (and let us say he hates Brussels sprouts), he will invariably eat them.  the situation dictates the outcome, but not the deeper human motivation.  This is a simple problem, but one that behavioral economics (and indeed advertising) must pay attention to.  Controlling for externalities and biases is not as simple as it may seem, but a broad set of data and information must be collected, sampled and analyzed.

And...?

Behavioral studies are helpful, but not if they are conducted in a vacuum.  Big data, social meta data mining, systemic consumer purchase information, macroeconomic indicators, global news and media and other stimuli are all factors in gaining the edge in getting closer to the customer and understanding (better understanding) how they think and what motivates them.

If advertising and behavioral sciences are closer aligned the potential can be quite lucrative, and altruistically, a winning proposition for all vested partners (consumers, marketers and brands).