According to a review by MIT, digital advertising is likely the newest form of market manipulation. In simple terms, the web and all things Internet-related have become marketing targets for industry fat cats. Sure, they occasionally get penalized by Google for using black hat tactics, but in reality they just get a slap on the wrist and walk away with a pocketful of sales proceeds while Google banks the ad revenue.
In fact, as this infographic by SEO Book illustrates, it isn’t just limited to companies. Everyone in the advertising and marketing sphere is doing it to some degree, and often shifting the blame to someone else when consumer dissatisfaction rears its ugly head. Take the case of Clemson University cited in this same infographic, which creatively adjusted its classroom sizes to improve its rank from #38 to #22. It’s just simple marketing manipulation – but a 16-point increase in rankings is nothing to sniff at, even though nothing other than the presentation of data changed.
Email is no different, though due to its inherently more personal nature, it is more honest. That makes people more likely to suspect questionable data, where they would accept more traditional advertising. This makes it more effective. In fact, statistically speaking, it is much more effective, with a return of 4,300%, according to Custom Lists. Part of the reason it is more effective is of course that it is more targeted, but the other side lies in the marketing factor. Consumers are harder to manipulate when targeted through email, as opposed to when they are binge or impulse shopping, making upscale email marketing a more trusted form of communication. That doesn’t make it exempt from manipulation, though, it just means it is a more reliable vehicle for engaging consumers – because it is inherently more personal and direct. There is, however, still a fine line between spam and informed marketing.
Perhaps one of the most ironic twists is that what we accept in traditional store advertising isn’t acceptable in digital marketing. The term “market manipulation” is reported to have been coined by Jon Hanson and Douglas Kysar in 1999 to “describe the ways companies exploit the cognitive limitations of consumers.” One example cited is how prices in a store are usually the $9.99 type, because consumers relate to that amount as being as closer to $9 than $10 despite the obvious fact that it isn’t (detailed in this research paper by the Social Science Research Network).
The exploitation of these cognitive limitations is nothing new, and is a largely acceptable form of manipulation in stores where merchandise can be physically accessed. This is because consumers are assumed to be cognitively aware and able to make good decisions – despite every evidence to the contrary. A classic example can be seen in how Apple manipulates the consumer market with its pricing structures, as reported by Time. When it comes to marketing, price manipulation is just a clever ploy, accepted in almost every store, and only questioned online when consumers can review and complain about manipulation.
How this impacts your own marketing efforts is worth considering, as the line between marketing and manipulation continues to blur, with giants like Google and Yahoo! capitalizing on the advertising revenue irrespective of the actual content or intent. Many times this can leave well-intentioned companies engaging in digital marketing efforts that are ultimately viewed negatively by consumers, or worse, labeled as spam. Search engines and even media giants rarely accept responsibility for such things, despite largely dictating how the market operates. They still capitalize on their own profitability in terms of search and advertising revenue, irrespective of the advertising success or failure they might have as a result.