Posts Tagged ‘science’
Rory Sutherland on… Advertising & Human Behaviour
Here’s the second in the series. Rory Sutherland talking about advertising and human behaviour. Rory covers some of the points I was getting at in this presentation on Complexity & Humanity 2.0.
Rory Sutherland on… Advertising & Human Behaviour from Jane Young on Vimeo.
Humanity 2.0 on slideshare homepage
Nice one slideshare!
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More complexity theory & humanity 2.0
The discovery of complexity
Networks are an essential ingredient in any complex adaptive system. In biology, molecules interact in cells, cells interact in organisms, organisms interact in ecosystems. As Eric D. Beinhocker points out in one of my favourite books, ‘The Origin of Wealth’:
“The economic world likewise depends on networks. The earth is girdled by roads, sewers, water systems, electrical grids, railroad tracks, gas lines, radio waves, television signals and fiber-optic cables. These provide the highways and byways of the matter, energy and information flowing through the open system of the economy. The economy also contains massively complex virtual networks: people interact in companies, companies interact in markets and markets interact in the global economy. Just as in biology, the networks of the economic world are arranged in hierarchies of networks within networks.”
BUT… traditional economics glossed over networks because they didn’t fit neatly into the equilibrium paradigm, whereby the economy was likened to an equilibrium system, i.e. behaving like a ball dropped into a bowl, rolling around until finally settling in a predictable place, until something external disrupts it. More recently the perfect sums have been ditched in favour of the idea that the economy is a complex adaptive system, i.e. a system of dynamically interacting parts in which micro-level interactions lead to the emergence of macro-level behaviour patterns. A single ant or water molecule is boring on its own, but naturally becomes an army or whirlpool as a byproduct of complex interactions. People are the same – the internet is the same. If a system reaches a state of equilibrium, it’s essentially dead.
Physics has likewise evolved to embrace complexity in favour of neat maths that doesn’t fit reality. The second law of thermodynamics states that entropy, a measure of disorder or randomness in a system, is always increasing. The universe as a whole is drifting from a state of order to disorder.
Our brains are made to deal with complexity, but we don’t make decisions by logically churning through every available piece of information. Instead we satisfice, taking the information we have and doing the best we can. Cognitive science has grown to recognise that we’re much better at inductive than deductive reasoning. We spot patterns and weave stories around metaphors and analogies.
Computers are the opposite, helping make up for our deductive shortfalls. It’s interesting that the rise of agile development follows the same pattern as new knowledge in physics, biology, economics and other advanced fields of discovery; as does the creation of new business models that embrace our inherent sociability and the complexity of networks. We’re no longer seeking the perfect, no longer adopting unrealistic assumptions to make the maths work out in the equilibrium framework we’ve been convinced explains everything for so long.
We know the energy inherent in what we’re doing renders equilibrium not only irrelevant, but impossible.
Our biased brains
I had a fascinating chat with Ogilvy Group UK Vice-Chairman Rory Sutherland the other day. We talked about the need for advertising to understand psychology and behaviour, rather than focusing on proposition alone.
On that note, it’s always useful to be reminded of how our heads really work; and how our biases affect belief formation and decision-making. Here are some examples:
* Bandwagon effect — the tendency to do (or believe) things because many other people do (or believe) the same. Related to groupthink and herd behaviour.
* Bias blind spot — the tendency not to compensate for one’s own cognitive biases.
* Choice-supportive bias — the tendency to remember one’s choices as better than they actually were.
* Confirmation bias — the tendency to search for or interpret information in a way that confirms one’s preconceptions.
* Congruence bias — the tendency to test hypotheses exclusively through direct testing, in contrast to tests of possible alternative hypotheses.
* Contrast effect — the enhancement or diminishing of a weight or other measurement when compared with a recently observed contrasting object.
* Déformation professionnelle — the tendency to look at things according to the conventions of one’s own profession, forgetting any broader point of view.
* Denomination effect — the tendency to spend more money when it is denominated in small amounts (e.g. coins) than large amounts (e.g. bills).
* Distinction bias — the tendency to view two options as more dissimilar when evaluating them simultaneously than when evaluating them separately.
* Endowment effect — “the fact that people often demand much more to give up an object than they would be willing to pay to acquire it”.
* Experimenter’s or Expectation bias — the tendency for experimenters to believe, certify, and publish data that agree with their expectations for the outcome of an experiment, and to disbelieve, discard, or downgrade the corresponding weightings for data that appear to conflict with those expectations.
* Framing — Using an approach or description of the situation or issue that is too narrow. Also framing effect — drawing different conclusions based on how data is presented.
* Hyperbolic discounting — the tendency for people to have a stronger preference for more immediate payoffs relative to later payoffs, where the tendency increases the closer to the present both payoffs are.
* Illusion of control — the tendency for human beings to believe they can control or at least influence outcomes that they clearly cannot.
* Impact bias — the tendency for people to overestimate the length or the intensity of the impact of future feeling states.
* Information bias — the tendency to seek information even when it cannot affect action.
* Irrational escalation — the tendency to make irrational decisions based upon rational decisions in the past or to justify actions already taken.
* Loss aversion — “the disutility of giving up an object is greater than the utility associated with acquiring it”.
* Mere exposure effect — the tendency for people to express undue liking for things merely because they are familiar with them.
* Moral credential effect — the tendency of a track record of non-prejudice to increase subsequent prejudice.
* Need for closure — the need to reach a verdict in important matters; to have an answer and to escape the feeling of doubt and uncertainty. The personal context (time or social pressure) might increase this bias.
* Neglect of probability — the tendency to completely disregard probability when making a decision under uncertainty.
* Not Invented Here — the tendency to ignore that a product or solution already exists, because its source is seen as an “enemy” or as “inferior”.
* Omission bias — the tendency to judge harmful actions as worse, or less moral, than equally harmful omissions (inactions).
* Outcome bias — the tendency to judge a decision by its eventual outcome instead of based on the quality of the decision at the time it was made.
* Planning fallacy — the tendency to underestimate task-completion times.
* Post-purchase rationalization — the tendency to persuade oneself through rational argument that a purchase was a good value.
* Pseudocertainty effect — the tendency to make risk-averse choices if the expected outcome is positive, but make risk-seeking choices to avoid negative outcomes.
* Reactance — the urge to do the opposite of what someone wants you to do out of a need to resist a perceived attempt to constrain your freedom of choice.
* Restraint bias – the tendency to overestimate one’s ability to show restraint in the face of temptation.
* Selective perception — the tendency for expectations to affect perception.
* Semmelweis reflex — the tendency to reject new evidence that contradicts an established paradigm.
* Status quo bias — the tendency for people to like things to stay relatively the same (see also loss aversion, endowment effect, and system justification).
* Von Restorff effect — the tendency for an item that “stands out like a sore thumb” to be more likely to be remembered than other items.
* Wishful thinking — the formation of beliefs and the making of decisions according to what is pleasing to imagine instead of by appeal to evidence or rationality.
* Zero-risk bias — preference for reducing a small risk to zero over a greater reduction in a larger risk.
Our world might be a giant hologram
Craig Hogan, who has just been appointed director of Fermilab’s Center for Particle Astrophysics, reckons “If the GEO600 result is what I suspect it is, then we are all living in a giant cosmic hologram.”
For the past seven years, a team in Germany has been searching for gravitational waves – ripples in space-time thrown off by super-dense astronomical objects such as neutron stars and black holes. GEO600 hasn’t detected any gravitational waves so far, but it might inadvertently have made the most important discovery in physics for half a century.
Check this out.
Investment in science
On Monday Obama delivered this speech, stating that “Science is more essential for our prosperity, our security, our health, our environment and our quality of life than it has ever been before.”
He said his administration would double the budgets of key agencies, including the National Science Foundation and the National Institute of Standards and Technology; and pursue the goal of cutting carbon pollution by 80% by 2050.
“Energy is our big project,” he said. “My recovery plan provides the incentives to double our nation’s capacity to generate renewable energy over the next few years.”
The word ’science’ comes from the Latin ’scientia’, meaning “knowledge”. Science is the effort to discover and increase human understanding of how reality works.
Sad that the percentages are so low…. Obama’s goal is 3% of GDP by 2010. Meanwhile Japan spends almost 4.0%; Korea more than 3.2%; and China over 1.4% of its GDP on R&D. Heading in the right direction, but not exactly Rargian.
Equilibrium and fractal business models
A fundamental law of physics (in one formulation) states that left to itself any closed system will always change towards a state of equilibrium from which no further change is possible. One example is swinging a pendulum… if you hold it up to one side it’ll be in a state of extreme disequilibrium, then as you let go and it swings back and forth, gradually losing energy, it’ll come to a standstill.
Other examples include many media agencies and advertising agencies. You know why.
Someone said to me today, ‘but we need to prove the ROI – how much is it [implementing a vision that gives power to the people, to cut a long story short] going to cost and what will the return will be? How do we show that listening to the customer has better ROI than direct marketing?’
Errr…. I’m not even going to answer that.
Our obsession with plotting loads of numbers in loads of rows in so-called forecasts, that ‘demonstrate ROI’ may be a comfort blanket for some, but are forecasts ever accurate or meaningful? If we look back at them later (which we seldom do thoroughly, because they’re so irrelevant and unfriendly) we’ll be astonished (or not) at how far off the mark we were.
Way too many business models set themselves up for equilibrium. A scalable business model should be fractal in nature… infinitely scalable, independent of any company’s resources. You should be able to zoom all the way in… or all the way out… and see a repeatability, recursiveness and simplicity. We should focus on setting ourselves up to leverage the unforeseen opportunities, rather than attempting to predict the unpredictable and produce reams of comfort crap on autopilot.
The rotary motion of a harmonograph produces a series of complex drawings influenced by relative frequency, amplitude and direction.
Brands should communicate with a harmonic balance between relative frequency (WHEN… don’t interrupt), amplitude (WHAT…loudness…don’t shout / broadcast) and direction (WHERE… targeting, permission).
Companies should seek to produce beautiful pictures… not chaos (disharmony / dissonance). Business models that can be boiled down to a simple, beautiful picture tend to have inherent scalability.
Things don’t resonate coz they’re dense, innit.
According to general advertising industry relativity, black hole budgets are entirely compressed into a region with zero meaningful volume and near-zero relevance, which means their density and gravitational pull towards the 30 second TV ad and print campaign are infinite; and so is the curvature of space-time and agency-time that they cause.
These infinite values cause most physical equations – common sense, general relativity and good manners (i.e. not interrupting), to stop working at the centre of a broadcast industry black hole. So physicists, Resonance Jedis and every single one of us call the zero-volume, near-zero-relevance, infinitely dense region at the centre of the broadcast industry black hole a singularity.
A gravitational media agency singularity is a location where the quantities which are used to measure effectiveness (eyeballs, click-throughs etc) and the gravitational field become infinite in a way that does not depend on real life or the co-ordinate system. These quantities (with lots of zeros on the end which must mean brands should pay us loads for stacking them up) are the scalar invariant curvatures of agency metrics and ad-space-time, some of which are a measure of (the) density (of matter).
Plonkerisation
“As for intelligent life I’m putting my money on the fact that in the whole universe, we are pretty much unique.” [Dr Michael Perryman, European Space Agency]
Duuuuhhh! You’d think if we’d learned anything in the 470-ish years since the scientific revolution kicked in, it would be that we should hold our own knowledge in greatest suspicion.
I’m sure those 16th century dudes would’ve put their money on the fact the Earth was at the centre of the solar system.
A few words from Nassim Nicholas Taleb (The Black Swan) are in order:
“The human mind suffers from three ailments as it comes into contact with history, what I call the triplet of opacity. They are:
a. the illusion of understanding, or how everyone thinks he knows what is going on in a world that is more complicated (or random) than they realise;
b. the retrospective distortion, or how we can assess matters only after the fact, as if they were in a rearview mirror (history seems clearer and more organised in history books than in empirical reality); and
c. the overvaluation of factual information and the handicap of authoritative and learned people, particularly when they create categories”
Copyright ResonanceBlog 2009
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