In the digital age, data has evolved into an invaluable asset for various business sectors, with marketing being one of the primary beneficiaries. The post-pandemic surge in digital device usage has facilitated a remarkable influx of accessible consumer data, with every transaction on Amazon or view on TikTok or YouTube contributing to billions of data points generated per second. While this data deluge facilitates unprecedented insights into consumer behavior, it presents a challenging dilemma: how can marketers filter this information overload to derive valuable insights? More crucially, how can marketers utilize this data to comprehensively understand consumer motivations and needs and, what’s more, to predict them?
Could Personality-Based Targeting be the Next Frontier in Consumer Engagement?
Behavioral Psychology applied to targeting is a rather innovative approach that allows for the identification of behavioural patterns based on the analysis of personality types and digital footprints but without processing any personal data. This approach empowers marketers to engage in meaningful interactions with tailored messages, offer products and services that resonate with consumers’ needs and even predict their desires. This is a transformative leap from traditional psychographic targeting, which relies on marketers’ intuition to categorize customer segments based on their opinions, attitudes, and lifestyle choices.
By employing personality theories, marketers can delve deeper than mere generic shared characteristics, understanding the underlying emotions and triggers that make us human. The result is a more targeted, and hence more effective marketing strategy.
The use of such behavioral data in various sectors has gained traction. McKinsey experts, as early as five years ago, concluded that lending institutions could significantly enhance collection success by applying innovative treatments grounded in behavioral segmentation. Several startups are now offering behavioral data for brands to tailor the most effective advertising in gaming. This usage is exemplified by the behavioral marketing platform Wunderkind, which raised $76 million in a Series C round in March this year.
Time for Rehabilitation: The OCEAN Model in the Post-Trump Scandal Era
Among the various personality models, the most popular is the Big Five – also called the OCEAN model – which measures five dimensions: openness to experience, conscientiousness, extroversion, agreeableness, and neuroticism. Although other dimensions, such as personal values, motivational orientation, or moral foundations, could be beneficial for psychological targeting, the Big Five model continues to dominate research and practice.
OCEAN came to light in 2018 following Cambridge Analytica’s involvement in the 2016 U.S. presidential election. Allegedly, the company created psychological profiles of millions of Facebook users without their knowledge and targeted them with fear mongering political ads tailored to their psychological vulnerabilities.
Opinions about the potential of psychological targeting range from viewing it as a formidable tool of psychological warfare to dismissing it as marketing gimmickry. Although the Cambridge Analytica case is not the best testament to the best use of the OCEAN model, it nonetheless drew attention to the effectiveness of personality-based targeting. Cambridge Analytica gathered psychological survey data, built algorithms to predict psychological traits, and thereby modeled consumer personalities, micro-targeting voters based on their profiles.
The Cambridge Analytica scandal eventually led to the company’s dissolution, but not the method. As associate professor at the Columbia Business School, Sandra Matz explained for how psychological targeting is not the manipulative tool that Cambridge Analytica purported it to be. Instead, she argued, it is a potent marketing tool that can shift opinions and attitudes, create previously nonexistent demand, and engage consumers on an unprecedented personal level.
Harnessing Behavioral Insights: What Can Marketers Achieve?
Marketers aim to create value for businesses and stakeholders by tapping into people’s psychological needs and motivations. Personality types predict preferences for marketing messages and communication styles. For instance, conscientious individuals appreciate numbers and details, while less conscientious people might be more easily swayed by compelling narratives. Open-minded people may be impressed by eye-catching visuals and eloquent language, while more conventional individuals may prefer conservative graphics and basic, respectful language.
Personality-based targeting allows companies to translate behavioral data into personas for individual customers. Matz’s explains how Hilton Hotels created personalized travel recommendations based on Facebook users’ detected personality traits. This campaign reached 60,000 users in three months, garnered an award for the most innovative travel marketing campaign, and bolstered Hilton’s return on investment and brand visibility.
Another example provided by Matz and her colleagues is a study where they tailored the persuasive advertising messages for a UK-based beauty retailer to recipients’ extraversion, a personality trait reflecting the extent to which people seek and enjoy company, excitement, and stimulation. People scoring high on extraversion are described as energetic, active, talkative, sociable, outgoing, and enthusiastic; people scoring low on extraversion are characterized as shy, reserved, quiet, or withdrawn.
One set of ads spoke to extroverts’ craving for stimulation, excitement, and attention, and another set played into introverts’ desire for quiet, high-quality “me time.” The extroverted ads were colourful, featuring women in highly social settings (say, in the middle of the dance floor) and alluding to their need to be seen (“Dance like no one’s watching, but they totally are”). The introverted ads were subtle, showing a solitary woman in a peaceful context and hinting at her reserved nature in the copy (“Beauty doesn’t have to shout”). From this experiment, the researchers concluded that the ads that were customised by personality were 50% more effective at attracting purchases and generating revenue than those that were not.
The main question is how to identify the psychological traits of potential customers, segment them as effectively as possible, and do it all without using personal data and with strict adherence to all privacy requirements. The proliferation of smartphones and new technologies are opening those doors.
Device Analytics for Outcome-Based Marketing
The advent of artificial intelligence (AI) and machine learning (ML) has further revolutionized personality-based targeting solutions. By analyzing extensive behavioral data collected from customer interactions on web pages or mobile applications, these technologies provide not only deeper insights into customer personalities, but can also predict their future behaviour. For example, by leveraging smartphone metadata collection combined with ML and behavioral psychology, profound insights can be provided into who the top-performing customers are and how to target them based on their personality types and target variables. By predicting personality types based on smartphone usage, communication styles can be tailored to individual personalities, facilitating more effective marketing campaigns.
Having analysed 1 million data sets (such as battery charging times or screen brightness) we have built a robust framework that is currently deployed in production. In particular, five smartphone users’ personas were identified. Each persona is the result of an in-depth analysis of specific traits possessed by users with similar patterns, interests, and app- personalities. These traits allow us to identify connections amongst individuals that traditional, generic demographic filters can’t. We combine the two to deliver a better picture of who customers really are.
- Enthusiast: This segment is more engaged with their phone and with life in general. They are outgoing, effective people who like to take on the world and win. They admire the persistent hero and strong ruler archetypes.
- Organizer: This segment is no-nonsense people who want strategy and efficiency.
They are less engaged with exploration or entertainment, and more with productivity tools. The language should be formal, practical, and matter-of-fact. - Hedonist: This segment likes to consume entertainment content, and less likely to use more functional apps. They are emotional people who like fun and escape. They admire the joker and magician archetypes. They respond best to emotional, thrilling, and magical language. They follow celebrities.
- Realist: This segment is more likely to use a basic phone for functional reasons. They are agreeable and sensible, and like to engage with pragmatic content like news. They admire the everyman and carer archetypes. They like language to be
kind, approachable, and positive. They are influenced by friends and family. - Artist: This segment is more likely to engage with artistic content, and be open to new things. They are less social and organised. Overall, they are thoughtful and reflective. They admire the creative and wise archetypes. They like language to be
verbose, new, cultural, and interesting. The tone should be thoughtful.
The success of this technology is evident, with major industry players adopting the approach. Here are some examples of psychological/personality-based targeting that leveraged Social Motivation and Informal Tone to highlight Scarcity and influence Ego to drive up to 40% more clicks and up to 50% more purchases than their mismatching or unpersonalized counterparts:
- A notification targeted to Enthusiasts:
- A notification targeted to Realists:
- A notification targeted to Organisers:
Balancing Power and Responsibility: The Importance of Ethical Data Usage
Despite all its advantages, personality-based targeting is not without risks and limitations. The Cambridge Analytica case serves as a stark reminder that misuse of data can lead to ethical breaches and public backlash. Consequently, businesses must handle data carefully, prioritize ethics, and obtain explicit consent for psychological targeting. Although the same data can be used for diverse use cases, providing snapshots of users that can enrich data for marketing purposes, privacy and data security must be maintained.
Personality-based targeting undoubtedly presents an exciting frontier for businesses, with the potential to drive consumer engagement and business growth in unprecedented ways. With a focus on ethics and consent, businesses can build trust and create a more personalized yet respectful marketing landscape.
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ABOUT THE AUTHOR
Michele Tucci , Chief Strategy Officer and MD Americas in credolab
Michele Tucci is the Chief Strategy Officer and Managing Director in North and Latin America in Credolab, one of the largest providers of digital scorecards and data enrichment solutions. Prior to joining Credolab in 2018 as Chief Product and Marketing Officer, Michele spent over 20 years working on international consulting assignments, product management and business development roles with Capital One, MasterCard, Intesa Sanpaolo Bank, and Telecom Italia Mobile.