Behavioral Economics is the science that studies human behavior, mainly Psychology in decision making.
The topic became better known after two Nobel Prizes in Economics were received by professionals with research work in this field. More recently, the book Rápido e Vagar (by the first winner Daniel Kahneman) helped to make the topic better known. The second Nobel Prize winner with a study in the area was Richard Thaler, also author of a best seller, the book Nudge.
But, how to apply Behavioral Economics in digital marketing?
If Behavioral Economics is about decision-making, we can (should) apply it in two moments: when we decide which path to follow in our digital marketing strategy and when we need to decide based on the decision of the target audience of our strategy.
Thinking about our target audience, we know that they are influenced by what they look at before deciding what to do. This is the priming effect, or the effect of stimulation prior to an action.
Let’s imagine a post on a social network. The type of photo, video or text influences the decision, but in a much more profound and assertive way than you might imagine. In England they carried out a study on the subject.
For 10 weeks, they alternated the photo that was above the coffee machine, odd week with an image with flowers, even week with an image of two eyes (as if they were looking at someone who is getting coffee). After getting the coffee, people should leave any amount for the coffee they had just picked up in a box. In the weeks with the photo of eyes, people left an average of three times more money for coffee than in the weeks with the image of flowers. The image of the eyes unconsciously pre-activates the idea that someone was watching.
But not only photos and videos have the power of pre-activation. In another study, a group of potential car buyers were asked if they intended to buy a new car in the next 6 months. This simple question increased sales volume during this period as a pre-activation effect, as if some of these people purchased to keep their word.
These studies can be seen in more detail in Kahneman’s book that I mentioned at the beginning of the article. In fact, although the book and the studies cited are not mostly about marketing, there are easily more than a hundred insights on how to plan and execute digital marketing strategies based on the biases that the target audience of our campaigns deal with on a daily basis.
However, it is not only the target audience of our campaigns that is susceptible to making decisions based on bias. We, digital marketing strategy managers, too.
In more than 10 years working with marketing and sales, I have seen many competent analysts and managers analyze numbers and graphs in the wrong way, thanks to biases such as the law of small numbers, that is, due to not paying attention to basic statistical premises such as the size of the sample or remembering the difference between correlation and causation.
The fact is that it is important to study the topic to be aware of it and, therefore, not only reduce the volume of wrong decisions arising from biases, but also gain a competitive advantage when setting up campaigns based on how customers, who are the public, target of the strategy think and decide.
I could write a new article for each of the biases, but the purpose of this text was just to give you a small taste of it. Maybe next time? Share the text and leave your comment.
*Fábio Duran is a Partner at the 8D Hubify Agency. Coordinator and Professor of the MBA Data Driven Digital Marketing at IDP. Postgraduate from the University of California in Business Administration and Project Management, Master’s Degree in Business Administration from Insper, Mentor and Digital Marketing Expert in the Cubo.Itaú and RD Station ecosystems, fellow of the BR +Innovators program and CEO of 8D Hubify agency, Top 1 Change agency in 2020 and Top 3 Result Agency in 2021 and 2022, according to RD Station. Passionate about Marketing, Sales and People.