C&B Notes

Consumer Psychology on the Web

Dr. Tomas Chamorro-Premuzic discusses how companies are exploiting the web’s unique ability to aggregate data down to the individual user level:

How are technology companies employing psychology to improve their understanding of users?

Mainly by trying to capture behavioral data — what users do online, on their platforms — translate that into personality profiles.  When users sign up for anything, they can be segmented by age, sex, and other basic demographics; but it’s what they do online and how they do it that provides the richest source of knowledge to companies.

How do you envisage products and services evolving from that understanding?

Technology has made it possible to shift from broadcasting to narrowcasting, which is what the internet does.  Websites and phone apps allow businesses to have one-to-one relationships with the consumer.  For example, whenever you log into Amazon, the site “redecorates” their virtual window display exclusively for you, and selects a bunch of products you may like.  This personalized experience continues when Amazon monitors your behavior — what you click on, what you search for, what you buy — and feeds that information to the system to refine your profile.

Similar recommendation algorithms are now used on a wide range of platforms to market products as diverse as movies, mortgages, holidays, and even romantic partners.  The result is that part of the knowledge is now outside the consumer’s mind.  When Amazon or eBay recommend us something we like but were not looking for, they effectively know us better than we know ourselves; when e-Harmony or Match.com suggest we should date someone, providing they get it right, they are also demonstrating a certain knowledge of us we don’t possess ourselves.

* * * * *

Can you reflect on what the next phase of the internet might look like? To go further, is there a place for advertising within that?

From a consumer perspective, there are three significant stages in the internet era.  The first is the Google era, when suddenly information became easily available to everyone.  I still recall when in 1998 I searched for something on Google and the first hit was the answer to what I was looking for — this was a breakthrough from past search engines and Google still has the edge on search.  The second instance, around 2004, is the introduction of Facebook, when the focus shifts from retriev

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ing information to retrieving people.  Whereas Google connected consumers to information, Facebook connects consumers to each other and makes products out of consumers.

The third era, which has only just commenced, combines the two previous ones: it is the era of social knowledge, where consumers can instantly capture and aggregate all the information that all other consumers have on a given topic.  Wikipedia pioneered this model by aggregating people’s knowledge on any subject for its entries, but it has yet to be scaled and extrapolated to consumer goods.  In the near future we will be able to scan any product with our phone and profile it by aggregating the knowledge of millions of people; in turn, we will also be able to profile consumers by translating their preferences into psychological traits.  In short, people will be consumers, products, and marketers at the same time.