Business Report

Technology and Persuasion

Persuasive technologies surround us, and they’re growing smarter. How do these technologies work? And why?

GSN Games, which designs mobile games like poker and bingo, collects billions of signals every day from the phones and tablets its players are using—revealing everything from the time of day they play to the type of game they prefer to how they deal with failure. If two people were to download a game onto the same type of phone simultaneously, in as little as five minutes their games would begin to diverge—each one automatically tailored to its user’s style of play.

Yet GSN does not simply track customers’ preferences and customize its services accordingly, as many digital businesses do. In an effort to induce players to play longer and try more games, it uses the data it pulls from phones to watch for signs that they are tiring. Largely by measuring how frequently, how fervently, and how quickly you press on the screen, the company can predict with a high degree of accuracy just when you are likely to lose interest—giving it the chance to suggest other games long before that happens.

The games are free, but GSN shows ads and sells virtual items that are useful to players, so the longer the company can persuade someone to play, the more money it can make. Its quickly growing revenue and earnings are a testament to how well this strategy works, says ­Portman Wills, GSN’s chief information officer. Along with factors such as smart engineering and creative design, using data to shape persuasive tactics is a key to the company’s success.

The idea that computers, mobile phones, websites, and other technologies could be designed to influence people’s behavior and even attitudes dates back to the early 1990s, when Stanford researcher B. J. Fogg coined the term “persuasive computing” (later broadened to “persuasive technology”). But today many companies have taken that one step further: using technologies that measure customer behavior to design products that are not just persuasive but specifically aimed at forging new habits.

If habit formation as a business model was once largely limited to casinos and cigarette manufacturers, today technology has opened up the option to a broad range of companies. Insights from psychology and behavioral economics about how and why people make certain choices, combined with digital technologies, social media, and smartphones, have enabled designers of websites, apps, and a wide variety of other products to create sophisticated persuasive technologies.

How these technologies work and why are the big questions this Business Report will answer.

With new digital tools, companies that might once have been simply hardware makers (such as Jawbone) or service providers (Expedia) are now taking on the role of influencer, attempting to shape the habits of their users by exploiting the psychological underpinnings of how people make choices.

While Expedia is trying to design its website so as to trigger someone to visit daily, Jawbone has built features into its fitness bands and other products that executive Kelvin Kwong grandly describes as “using our best understanding of how the brain works to get you to act.” And Kwong says it’s working. Sending carefully designed messages to people wearing Jawbone fitness trackers has helped them get an additional 23 minutes of sleep per night on average, and move 27 percent more, the company says.

Habit Design, which bills itself as “the leading habit training program,” employs game designers and people with PhDs in behavioral science. It says it has created a platform that keeps 80 percent of participants in corporate wellness programs involved over three months. Traditional programs like seminars or counseling, by contrast, generally lose 80 percent of participants in the first 10 days, according to Michael Kim, a former Microsoft executive who is now Habit Design’s CEO.

New data-centered models of persuasion are having an impact not only on new startups but on traditional influencers, from political consultants to advertising agencies. In politics, data consulting firms that emulate the kind of voter modeling, mobilization, and persuasion the Obama campaigns pioneered are multiplying.

One model for today’s new type of ad firm is Rocket Fuel, based in Redwood City, California. Staffed by people with PhDs in game theory and predictive modeling, the firm uses artificial intelligence to predict the best ad to show a given customer looking at a particular Web page, taking into account data gathered from websites; the browsing, advertising, and purchase history associated with a given shopper’s IP address; and insights into what style of ad works best on a certain website (blue hues are best on, for example). Founded in 2008, the company claims its targeted ads generate revenue for clients amounting to two to eight times what is spent on the ads. Last year Rocket Fuel had revenue of more than $400 million.

Marketers argue that there’s potential for all this to benefit consumers, who want better service and more suitable offers. “They expect companies have data on them. They just want it to do something useful for them,” says Philip Wickline, CEO of Zaius, a Boston-based startup building a platform that will allow a company to track customers’ behavior, with their permission, as they interact with it in stores, online, and in any other context. Armed with this information, companies could better understand the value of each customer and more effectively measure the return on ads or discounts directed at that person.

Given the depth of information about us that tracking technologies generate, and companies’ increasingly sophisticated attempts to affect our behavior, what are the appropriate limits of a kind of persuasion that can be so well designed as to be nearly invisible? There are already legal limits on how companies can advertise products. But the government’s own use of behavioral persuasion has led to calls for updated regulations.

Rather than trying to regulate hard-to-spot attempts to get people to form new habits, a more practical solution might be for product designers to agree to adhere to principles like transparency and disclosure. Requiring a user to sign up to be persuaded—as you very well might in search of better sleep or fitness—could be best.

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Next in this Business Report

Persuasive Technology

Consumers encounter technology designed to influence their choices daily. This report describes how that technology is being created and used by marketers, politicians, lawyers, and others.

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