Should Behavioural Economics in marketing be regulated – or hyped-down?

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Lazar Dzamic is the former Head of Brand Planning at Google ZOO London, a consultant and a university lecturer. He contributed to the 2015 Global Edition of BOBCM, and is currently co-editing a new book collaboration about how content is transforming marketing with BOBCM’s curator Justin Kirby. We’ll be showcasing some of the key themes the book will be exploring, and in this article Lazar discusses whether behavioural economics should be regulated or not. You can also check out Justin’s recent interview with Lazar where they discuss how this article fits into the wider ethical considerations they will be covering in the forthcoming book.

Every once in a while, a new fad sweeps the marketing world (especially advertising), hailed as the future of it. Social media, storytelling (my pet peeve), or, a few years ago, Behavioural Economics (BE)… No wonder, a cynic may say, in an industry that trades on fads.

Curiously, unlike any other old snake charmer, we never seem to become immune to the venom of the beast we tame. We succumb to it just like any other punter. Snake oil never peaks.

After reading, re-reading and deploying a shelf-full of BE (and related) literature in the last half a decade, two things strike me as perennially missing in our elated BE debate: the questions of ethics and the effectiveness of it.

Think of the ethics first. Because, if BE is as powerful as we claim – the thing that warrants all those departments, institutes and even whole agencies popping up all the time – then it should be regulated for commercial purposes. Let me say that again: its use should be treated the same as driving cars, practicing psychotherapy and, yes, owning guns.

Any BE programmes outside of the governmental social engineering and charity use should be licensed. No gung-ho, free-market BE for selling financial services, cars or fast food, unless the deployers can prove they are beneficial, not detrimental, to consumers and the society at large. Why?

If our cognitive biases, and the science seems to show that persuasively, are real and – in the right context – largely powerful, it is, therefore, one of the most potent mechanisms for manipulating people. The biases, collectively, contribute to the pervasive, default, irrational side of our nature so eloquently brought to light by Kahneman et all. It is exactly the side that we, the Mythocrats, try to exploit.

Not a single person in our industry I ever talked to about BE – except some of the ex-COI staff and some charities – had been studying the discipline in order to protect people from their cognitive heuristics. On the contrary, the discourse is almost exclusively utilitarian, devoid of any moral consideration, focused only on profit extraction and – so very often – downright predatory.

If the cognitive biases are a sort of cognitive blindness, who wants to steal from the blind? If governments deem it important enough to impose some ‘smart defaults’ and ‘nudges’ into our lives to save us from not saving enough for our old age, from smoking, or from taking up ruinous loans, why not regulating the same impulses to save us from obesity, diet-induced diabetes or binge drinking?

Isn’t the unquestioning use of such, seemingly powerful, mechanisms that tap into our automatic mental ‘clicks & whirs’ (in a memorable phrase from another marketing bible, Robert Cialdini’s ‘Influence’) genuinely exploitative and predatory? And why are we, the industry, not advocating for the wider-ranging cognitive paternalism and responsibility?

Our industry has become one of the major mental pollutants in the modern world. It is part of a wider problem of a cognitively aggressive environment of the modern unbridled capitalism that is draining our scarce attention pool with an endless assault through commercial messaging.

It was explored, very thoroughly, by the Canadian philosopher Joseph Heath in his seminal book ‘Enlightenment 2.0’. It is also one of the main reasons for the rise of ad blocking. Too much of it. So, to mitigate for the falling effectiveness, we resort to deep science. BE; neuromarketing; the border-line ethics of the ‘native advertising’. Our brains have never been so open, so unguarded, so… abandoned to the market forces bent on only one thing: market survival, at all cost.

Should we be worried? Or, perhaps, we don’t have to?

Advertising, particularly, has always had a chip on its shoulder: the lack of a unifying scientific ‘theory’ of it. As another seminal book, Paul Feldwick’s ‘The Anatomy of Humbug’ highlighted, we were largely grasping in the dark, relying on quirks, obsessions and, indeed, business interests, of assorted talented individuals to generate our canon.

We still, unwittingly, use some concepts and some vocabulary developed during the steam age. Steam has built the modern industry; it is now maintained by hot air of advertising. Or so it seems sometimes. A motley patchwork of individual, social and, these days, evolutionary psychology – with some neurological references thrown in – served as the best recent proxy for such a unified theory. Until Behavioural Economy came along.

It was scientifically robust, intuitive and it elegantly packaged a long history of empirical and anecdotal learning on how various aspects of marketing and advertising ‘work’ into a relatively simple framework of cognitive biases. The content was empirically familiar, but the vocabulary was new. We did grasp the ‘what’ (biases, perception, decision making), we didn’t know the ‘why’ (evolution, neurology, context).

The problem is that whenever we try to deploy key BE principles in advertising – outside of an odd CRM/behaviour change programme, or some environmental framing in experiential marketing – we struggle to show that it actually works; or, at least, better than what great creative leaders knew intuitively already.

The key word here is ‘advertising’. I would go even further and say ‘any context that does not involve a long-term behavioural change, constantly nudged along via purposeful design of that individual’s environment’. Try that on TV. Even with email.

I have been judging the Direct Marketing Awards (DMAs) for many years now and every season there is at least several entries written as if the agency was remunerated by the number of BE jargon it crammed into the submission. But, results – oh, the results! Great on quick reading, but increasingly tenuous, suspicious and downright implausible with each additional probing by the expert judges.

Misattribution of the other media channels’ effects, misinterpretation of the ‘industry benchmarks’, miscalculation of ROIs… The story on a page is but a shadow of the BE behemoth from the sales brochures. The best BE story I’ve heard so far? Hope Soap – hiding a toy inside a translucent soap to encourage South African kids to wash their hands regularly. ‘Loss aversion’ rules; so does gamification. Both camps could claim it. But it was just a good idea…

And just in case someone says that the truth with the BE is neither here, nor there – neither the dragon to be feared, nor the sloth I’m dissing here – and that it has its acceptable commercial purposes, or even ethical uses in certain circumstances, my reply would be: and who decides, in our industry, what is ethical on this, deepest of our human levels? And do we need to decide at all?

It is a conversation long a-coming. But we owe it to ourselves – and to the society – to finally start it in earnest.

About the author

Lazar Dzamic, Creative Strategist Google ZOO EMEA and lecturer at Singidunum University, Belgrade