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Consumers, The Internet, and Bad Decisions
By: Dwayne W. Waite Jr.
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Whether or not we like to admit it, consumers (we included) are prone to making irrational decisions. Left to our own devices, we base our decisions on too little information, too much information, and sometimes even irrelevant information.

And all that without the help of the Internet.

With the Internet, our probability to make rational decisions based on our own self-interest dwindles, drastically.

Why is that? Shouldn't information technology assist in decision-making for consumers? Not exactly. Researchers looked at this rising concern, and published their results in the journal Metaphilosophy. But here are some takeaways.

First, the Internet's ability to make irrelevant connections with products enables consumers to make decisions based on false information. The example in the press release is perfect: a movie featured a book that didn't exist. When people searched for the book, Amazon suggested a similar book, then tied it to the movie, and everyone began buying the book. All of a sudden, a book was launched to the bestseller list because of Amazon's ability to tie products together.

Second, whether we are online or offline, we follow a group mentality. In the above example, people bought the irrelevant book because they saw other people buying it, regardless of the individual information they had. The researchers in the study referred to this phenomenon as "informational cascading."

Third, our online world is shrinking. As Google and Facebook tailor our online experiences according to our habits, we tend to see more content that is in line with our thinking. We see less content opposing our point of view. In online advertising, this is a good thing; you have less people complaining about ads that don't appeal to them. But on the other side, businesses, brands, goods, services, and ideas are blocked out of a person's view. Perspectives they previously would not have thought about.

Last, why is this important to AdLand?

Several reasons. Advertising is the language of business, and with the Internet personalizing experiences and tailoring content based on consumer actions, we may miss out on exposing people to new goods or services. Also, the brands and clients we serve may be victims of "informational cascading," and if they see consumers that we are targeting pairing wrong information to our goods and services, we must be aware enough to put the right information out there. This is when targeting gatekeepers and opinion leaders is crucial. 

The real fight to keep our brands and clients relevant online is just getting started. We hope you're ready for it.


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About the Author
Dwayne W. Waite Jr. is partner and principal at JDW: The Charlotte Agency, a marketing and advertising shop in Charlotte, NC. He enjoys consumer behavior, economics, and football.
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