Understand and React to Consumer Behavior
May 18, 2018
When I was in college, one of the first things I learned when it came to advertising was that in order for an ad’s conversion rate to remain consistent, you would have to double your ad frequency every every couple of years.
That was 20 years ago, and I can say that based on the number of ads we are exposed to as a society, that formula seems to have driven most media plans produced today.
But measuring effectiveness by the number of ads produced and thinking this will ultimately lead to a more efficient path to conversion is archaic. Consumer behavior is changing, and brands need to be able to pivot and meet these demands or risk losing their customers.
People are tired of being sold to. Everywhere we go, we see an ad for something. Think about it. Ads have creeped into just about every nook and cranny of our lives, whether it be in our digital world or our real one. You can’t even go into a restaurant bathroom without having a DUI lawyer trying to gain your attention while you should be focusing on the task at hand. This ad fatigue has led to a major shift when it comes to how we search. Google and its AI-powered algorithm has taken notice, and our world continues to change each day because of it.
A couple of years ago, Google handed off its search algorithm production to DeepMind, an artificial intelligence system it had acquired in its ever growing desire to better understand consumer search behavior. This change to AI had an immediate effect on how quickly Google’s main platform functioned and delivered its results. Where changes once happened in major updates every couple of months, it now began to happen every couple of weeks, then days. Today, DeepMind works at an exponential rate, often dropping updates multiple times a day, although many of these can be imperceptible if you aren’t paying close attention.
What we have learned (or rather, what our future digital overlord DeepMind has learned) is that human beings crave peer feedback and interaction. This isn’t something that is necessarily new. The rise of social media giants like Facebook, Instagram and Pinterest are all tied to our innate need to belong. We also have become conditioned to mistrust ads in many ways. Overall, we would much rather trust the unfiltered view of our fellow human beings when it comes to searching out a product or service. Welcome to the rise of the world of reviews.
Again, reviews aren’t anything new. Yelp! and other services like it have been around for a decade or more. The relevance of these platforms is what needs to be paid attention to. Here are a couple of reasons why:
- 92% of consumers now read online reviews vs. 88% in 2014
- 40% of consumers form an opinion by reading just one to three reviews vs. 29% in 2014
- Star rating is the number one factor used by consumers to judge a business tweet
The takeaway from all of this is that we are in a new, exciting era—one where the actual customer experience trumps your ability to sell an average one.
“But what about the people that leave a bogus review!” is the response we often hear. If you are truly focused on a great experience for your customer and have executed on a robust review curation strategy, this is a distant concern. If you or your ad agency haven’t had a conversation recently about consumer behavior and how to project this digitally, it is definitely time to do so.
And if don’t have a detailed program already outlined in terms of your approach, we would love to hear from you!