From Bob Mason, EVP, Managang Director of Brand Strategy, Palio

Marketing and advertising have always been realms where hot topics and buzz phrases abound. One subject that I’ve read about for some time, behavioral economics, is one of those topics that’s having the big spotlight shone upon it as of late.

It seems I can’t pick up a magazine or trade journal without some reference to the discipline. As I type this, I literally have four different documents on my desk that happen to address the subject. They come from the likes of Advertising Age, McKinsey, Towers Watson, and even the Federal Trade Commission. Clearly the topic is achieving a business culture “tipping point” (another one of those hot industry buzz phrases that has caught on, thanks to the wonderful insight and writing of Malcolm Gladwell).

It’s interesting for me to observe this because, as a discipline, it’s been bantered about in academia for some time, but it’s just now getting attention in the business, consulting, and media worlds. What’s most interesting to me, though, is the simple (and oh-so-long-overlooked-by-too-many-marketers) premise at its core. Simply put, behavioral economics (often described as “a blend of psychology and economics”) is considered to deviate from traditional economics, according to a recent Advertising Age article, “in that it doesn’t assume consumers behave rationally, like a market (in theory) does, making decisions based solely on facts or logic such as price or quality.”

Really, you don’t say?

The fact that that’s newsworthy is a frightening statement about our industry. For far too long, we’ve taken research respondents words at face value and continue to be baffled when brands don’t excel in the marketplace. You’ll often hear, after the fact (when brand performance isn’t what everyone dreamed, hoped, and expected), “Well, the research said XYZ so that’s what we did.”

I’ve mentioned it in previous posts, but frighteningly enough, I’ve probably interviewed (or been behind the focus group mirror listening to) thousands of research respondents over the course of my career. And I’ve yet to have met one who is “influenced by advertising and marketing.” At least to hear them say it, they’re all ultra rational.

Don’t get me wrong. I don’t believe that marketing and advertising cause people to rise up from their chairs and march, zombie-like, to the store. But it obviously impacts people more than they realize and/or would be willing to admit. But no one wants to look less than rational.

So, next time you’re developing a market research plan, please factor this “newfangled” behavioral economics thinking into the mix. Recognize that consumers are crazy and will lie to your face (I say this in the most endearing of ways) and that, to truly understand their values, motivators, and deepest hopes, you have to use market research the right way, employing methodologies, techniques, and lines of questioning that, combined with good judgment and courage after the fact, will help build better insights into stronger brands.

Call it behavioral economics or call it common sense. It’s the right mind-set to have when approaching the marketplace.