Epi #32: AI-Powered Predictive Analytics x Cognitive Biases & Behavioural Science

In the realm of marketing, a quiet(ish) revolution brews. AI-driven predictive analytics, not just a buzzword, but a master key unlocking mysteries of consumer behaviour. For us marketer whom listens closely, it reveals truths hidden in plain sight — a roadmap to desires and decisions of customers yet to be made.

This isn't mere data analysis; it's the closest we've come to reading minds.

And for those with the wisdom to harness its power, the rewards are as boundless as the insights it offers

At the heart of this transformative wave is a deep dive into the cognitive psychology and biases that make hyper-personalisation not just effective, but compelling. Understanding these biases is not just an academic exercise; it’s the bedrock of effective strategy. By dissecting four pervasive biases, as we shall explore later, we unlock the elusive yet essential consumer insights necessary to craft strategies that don't just speak to your audience, but resonate with them on a fundamentally human level.

TL/DR Summary

In this edition, we're focusing on how to get hyper-personalisation right. Here's what we're covering:

• What the global experts are saying about predictive behavioural tools.
• The cognitive psychology underneath why hyper-personalisation is now subconscious consumer expectation.
• Tips for doing it properly and not messing it up!
• My top 3 software tools to fuel your business and marketing growth in 2024.

The CES Showcase was F-ing Mind Blowing

At last week's Consumer Electronics Showcase (CES) in Las Vegas, AI continues to steal the show—showcasing some mind-blowing innovations (hello, Rabbit R1!).

CES Insights

• Predictive analytics will be crucial for publishers and advertisers in understanding user behaviour and leveraging vast data sets.
• Benjamin Arnold of Adludio. Arnold emphasises the importance of "hyper-contextual relevance" in a post-cookie world, where AI can dynamically tailor ads and brand messaging to individual users.
• Danzis points out AI's role in the contextual advertising renaissance, aligning user interests and reducing privacy concerns.

So, who's doing it well?

Amazon, Netflix, and care/of, for example. They're mastering hyper-personalisation, transforming it into a gold mine. Amazon's add-on recommendations, Netflix's bespoke content suggestions, and care/of's tailored vitamin program are prime examples.

Four Cognitive Biases Underpinning Hyper-Personalisation Effectiveness

Similarity Bias (The "Just Like Me" Effect)

You're at a social gathering and you meet someone who shares your interests in Tennis, the outdoors and psychology. This instant connection is rooted in the Similarity Bias - we gravitate towards and trust entities that mirror our preferences and values. In marketing, when advertisements are tailored to reflect the consumer's personal tastes and experiences, it creates a sense of kinship and trust. This bias explains why personalised marketing resonates strongly; it's akin to receiving advice from a friend who knows your tastes intimately.

Availability Heuristic (The "Story of My Life" Effect)

You know when you're considering buying a new car and, you start noticing that model everywhere on the roads. This is the Availability Heuristic in action. It refers to our tendency to overestimate the importance of information that is readily available to us. When consumers are presented with products or services that align with their recent searches or expressed interests, these items feel more relevant and are more likely to catch their attention. This heuristic underscores the power of timely and contextually relevant marketing.

Confirmation Bias (The "I'm Special" Feeling)

I know you understand the power of affirmation. Like when you just know a campaign was gonna kill it and it did. No better feeling, eh?

This is Confirmation Bias, where we favour information that confirms our preexisting beliefs. In hyper-personalised marketing, this bias is leveraged by presenting products and services that align with the consumer's existing preferences, thereby validating their choices and tastes. This not only enhances customer satisfaction but also fosters brand loyalty.

Familiarity Bias (Evolutionary Comfort of the Known)

Let's go back to your love of the outdoors, you’re on a hike and think of choosing a well-trodden bush track over an unknown path. This preference for the familiar is rooted in our evolutionary need for safety and predictability.?

This bias explains why consumers favour brands we’ve seen repeatedly. Continuous exposure to a brand builds an instinctive trust, similar to recognising a familiar face in a crowd. In predictive analytics and personalisation, this means establishing brand familiarity through consistent visibility. Just like our ancestors trusted familiar territories, modern consumers are inclined to trust and choose brands that become a regular part of their landscape, harnessing an age-old instinct for comfort and reliability in the familiar.

Summary

In 2024 and beyond, using predictive analytics and actioning the insights is critical as its en route to becoming your best clients expectation, if not already..

If you would like help with:

• Identifying which cognitive biases are most pervasive in your target market
• Strategising the best consumer journey to increase your sales
• Creating ads that drive positive ROI

DM me.

About the Author

Nicholas Mason | B.Soc.Sc., BBehSc

18 eventful years working in strategy, media, consulting and sales; within the advertising sector. I've always been endlessly curious as to why some campaigns kill it, and others bomb—often, counterintuitively. I could never work it out!

That was, until 2015, when I came across the field of behavioural science. For me, it's finally connected the dots. Answers why campaigns kill it and how to scale success.

If you'd like to talk to me about driving serious ROI, holla at me here on LinkedIn.

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