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Editor's Note:

I just wanted to let my readers know that I've created a blog where I will be posting essays and articles I've written on digital and online marketing. It's an extension of Media Perspectives. I hope you continue to read and enjoy!

Here's the link: Jaffer Ali's Blog - Perspectives from a Media Contrarian

Thanks for Reading!


The Pretense of Knowledge
by: Jaffer Ali

The greatest obstacle to discovery is not ignorance, it is the illusion of knowledge. --Daniel Boorstin

The title of today's topic was lifted from Friedrich August Von Hayek's acceptance speech for the 1974 Nobel Prize in Economics. He chose that august forum to rail against his discipline, for he had seen economics fall under the sway of "physics envy".

Now thirty-five years later his critique of the state of economic theory still rings true, especially in context of the online marketing landscape. To wit there is a branch of online marketing whose preoccupation is collecting as much data as possible on the individual and then mining that data for discernible patterns of behavior. The goal, according to Eric Schmidt of Google fame, is "to predict even what you will search for before you search for it." In short, the goal of behavioral data collection is to predict human behavior on a micro level.

Just as in economic theory, where more and more variables are measured in the vain attempt at predicting behavior, Hayek pointed out the human limitations inherent in such complex behaviors and predictive systems. In Hayek's own words:

"We know... a great many facts which we cannot measure and on which indeed we have only some very imprecise and general information. And because effects of these facts in any particular [emphasis added] instance cannot be confirmed by quantitative evidence, they are simply disregarded by those sworn to admit only what they regard as scientific evidence; they thereupon happily proceed on the fiction that factors which they can measure are the only ones relevant."

Marketing online has followed the path of mathematical reduction. Proponents of this school of thought are not the creative ad men of days gone by, but technocrats with MBAs, engineering degrees and yes, even physics cast offs. Hayek again cautions:

"It has led to the illusion that we can use this [math technique] for determination and prediction...and this has led to a vain search for quantitative or numerical constants. This happened in spite of the fact that founders of mathematical economics had no such illusions...Vilfred Pareto, one of the founders of this theory clearly stated, its purpose cannot be 'to arrive at a numerical calculation of prices' because as he said it would be absurd to assume we could ascertain all the data."

Some reading this might protest that behavioral targeting is useful even if we cannot ascertain all data for prediction. After all, something is better than nothing, right? Upon closer inspection though, the answer may be perhaps not. Plausibility aside, in actual practice the false illusion of knowledge we do NOT possess has proved disastrous. Remember, marketers are making investments based upon these admittedly flawed marketing premises.

Also, that which distracts marketers from doing what they should be doing-namely marketing-is not a good thing. If creativity becomes an afterthought, you are already way behind in the game. If you are not constantly thinking about what you can offer your audience, you already have two strikes against you. Again Hayek:

"There may few instances in which the superstition that only measurable magnitudes can be important has done positive harm...[but] an almost exclusive concentration on quantitatively measurable surface phenomena has produced a policy which has made matters worse."

A growing number of online marketers want to wrest control back from the quants. As self-proclaimed marketing experts, they've had their day in the sun, right alongside the legions of other soft "science" experts, the psychologists, political scientists, economists, and historians. Like everywhere else that quasi-science triumphs over common sense, the quant stamp on the online market has been a dismal failure.

We all wanted marketing to become a science when it is in fact, a lost art. Our collective delusion was that we could hand the keys to marketing over to the guys with pocket protectors. We abrogated our responsibilities as advertising and marketing professionals. We bowed to the false idol of science. Hayek, a true scientist in his own right, said,

"Yet the confidence in the unlimited power of science is only too often based upon a false belief that the scientific method consists in application of a ready made technique, or in imitating the form rather than the substance of a scientific procedure, as if one needed only to follow some cooking recipes to solve all social problems."

I can almost feel the daggers from the quants who are still reading this. They inevitably will try to save their discipline (and jobs) by claiming that they can truly predict behavior. But the complex interaction of inherently unpredictable human thought with unknowable events makes this "discipline" even more of a fool's errand; its relative "success" limited in time and degree.

Who better than Professor Hayek to close this piece:

"If man is not to do more harm than good in his efforts to improve [marketing models], he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible."

Original Article: The Pretense of Knowledge

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