Nir’s Note: A few weeks ago, I wrote a brief post summarizing some thoughts for a potential book chapter. I asked my readers for help and you delivered! The comments were fantastic and I received several insightful emails. Therefore, I’ve decided to continue with the experiment with the article below. This week’s post is much shorter and less developed than my previous essays and is intended to solicit more of your thoughts and feedback for a potential book chapter. Give it a quick read and tell me what you think. 

kids on techThe world has become harder to resist. Products are getting better at giving people what they want and – for the most part – that has been good thing. Yet, the historical trend-line shows products are also becoming more habit-forming.

All products alleviate customers’ pain. Even products used to gain pleasure must first generate desire, a unique form of discomfort, which the customer will pay to satiate.

Manufacturing Desire

The engine driving the evolution of marketing and advertising for the past 125 years has been the increasing speed with which companies adapt products to better meet customer needs.

The Age of Scarcity (prehistory – 1930s):  For the majority of human history, the basic necessities of life were expensive and rare. Human populations growth was mediated by the limitation of resources. Keynes formulation of Say’s law[1] was that “supply creates its own demand” and in a time of scarcity, goods sold quickly to those who could afford them. Though commercial communication traces back thousands of years, the term “marketing” only made its debut in 1884. Prior to the industrial revolution, products attracted consumers mostly by being available. The limited supply meant high prices and only the well-off had any discretionary spending power.

The Age of Capacity – (1930’s – 2000):  Starting just before the Great Depression, manufacturing production began exceeding demand. This was a massive problem for companies who feared making goods no one would buy. Industry called upon men like Edward Bernays, Sigmund Freud’s nephew, to create demand through “public relations,” a term he coined as a substitute for the word propaganda, which had negative connotations after its use by the Germans in WWII.

Bernays spawned the rise of modern Madison Avenue advertising through mass communication channels like radio. Copying Bernays’ successful tactics, companies sought to identify and connect consumer’s hidden psychological needs to commodity goods like tobacco, soap, and cereal. During the golden age of branding, companies found they could create demand and increase consumption by giving their goods unique identities and for the first time, create associations in the consumer’s mind. Though their product remained largely unchanged and indistinguishable from one another, companies found altering their packaging, coupled with repetitious messaging, was enough to influence purchasing behaviors.

During the later half of the 20th century, the falling cost of creating new products in smaller batches meant companies could alter goods slightly to appeal to previously underserved niches. Marketers also learned to segment consumers through various demographic and psychographic characteristics, with various degrees of success and scientific rigor. The focus group helped brands build new offerings to satisfy what consumers could tell them they wanted.

The Age of Contingency – (2000 – present):  Prior to the widespread use of the Internet, marketing had been dominated by products, which changed relatively little. Companies generally repackaged and rebranded products as “line extensions” of the main brand. However, with the explosion of interactive technologies, companies could tailor products to each and every user. For the first time, products could alleviate the customer’s pain in a uniquely personalized way.

Perfect Contingency

Vast amounts of individualized data, transferred at unprecedented speeds to readily accessible, always-on devices, define the age of how we interact with the products that define our lives. Technology products today adapt to the user, constructing themselves in real-time. For example, no one’s Twitter stream or Facebook timeline is like anyone else’s.

But in the Age of Contingency, it is not only the product that adapts to the user. The user also adapts to the product by forming new behavioral and usage habits.

Two parties, the product and the user, change together towards “perfect contingency,” a state of nearly instantaneous adaptation to one another. The more the user habituates to using the product, the more useful and pleasurable the product becomes. This is why the world is becoming a more addictive place.

Nir’s Note: Let me know what you think in the comments section below or send me an email. Do you have any supporting stories to share? Do you know of any relevant studies or examples? Read any good books on the topic? Please let me know. 

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  • http://ryanhoover.me Ryan Hoover

    Thoughtful post, Nir. I especially like your statement:

    “But in the Age of Contingency, it is not only the product that adapts to the user. The user also adapts to the product by forming new behavioral and usage habits.”

    “Big data”, machine learning, predictive modeling, and several other buzz-worthy movements in the analytics space, have enabled product designers to mold experiences around user’s behavior and context like never before. Technology is increasingly becoming an extension of oneself and frankly, we’re not far from the sci-fi world where we start to become cyborgs.

    I wrote about a related topic in how technology is becoming increasingly easier to use, lowering the cost of motivation to influence action. Ie, technology is becoming more addicting. Would like to hear your thoughts and those of other readers: http://ryanhoover.me/post/43358144837/technology-addiction-the-motivation-bar-is-falling

  • http://platformed.info/ Sangeet Paul Choudary

    Great post, Nir! I’m just overlaying my Platform Thinking lens here and hopefully that proves useful.

    The Age of Contingency is the age of data. Real-time feedback that tailors a user’s experience of the product. The age of capacity was built around intra-firm processes. The age of contingency is built around user-product feedback loops. As intelligence gets added to physical products through sensors etc. , our experience of physical product usage too will change in a manner that creates habits.

    I differentiate these two ages more in terms of business models as being about Pipe Thinking and Platform Thinking.

    I love the parallel here.

    • http://www.nirandfar.com/ Nir Eyal

      Agreed Sangeet, thanks for commenting and drawing the linkages.

  • http://twitter.com/fabianszulanski Fabian Szulanski

    How to integrate co-creation with addictive user habits? May be this should also be the age of the prod-user? Would love to know your thoughts :-)

  • Megan ORorke

    Nir you might consider including the physical product angle in addition to software and services. The ability to produce objects of any shape, on the spot as needed enables greater flexibility in customizing the structure of the product. While each user’s Facebook feed may be unique content-wise and provide a personalized experience the underlying structure of data presented seems to have less potential variants.

  • http://www.facebook.com/asher.adelman Asher Adelman

    Interesting theory, though I’m not sure It’s accurately reflected in practice (at least with me personally).

    You state that: “Two parties, the product and the user, change together towards “perfect contingency,” a state of nearly instantaneous adaptation to one another. The more the user habituates to using the product, the more useful and pleasurable the product becomes.”

    But I’ve found that Twitter and Facebook, for example, have not become more useful and pleasurable. As I and my growing list of friends/followers post increasing amounts of content, my satisfaction with these products is decreasing. There is simply too much content for me to be able to consume, and Facebook seems to be doing an inadequate job filtering the content in my news feed (not to mention the fact that Twitter doesn’t even attempt to filter the ‘firehose’ amount of tweets gushing into my feed).

    • kiran bhanushali

      How does your youtube experience compare to facebook and twitter? For me the related videos/users on youtube is a much more consumable form of content than adding a friend/following on facebook and twitter. Subscribing on youtube feels like a much lighter commitment than the analogous actions on facebook and twitter.

  • nipulpatel

    Nir — I wonder how an ‘adaptation curve’ would look if you graphed it out. Where (if) adaptation occurs faster at different points in time, optimality exists or doesn’t, a “point of no return”, etc.

    Your premise is intriguing, but it feels like something needs to exist between “manufacturing desire” (sounds marketing focused) and “perfect contingency” (sounds product focused).

    • http://www.nirandfar.com/ Nir Eyal

      Interesting idea, why is it a curve?

  • http://www.facebook.com/revell.horsey R. Revell Horsey

    2 different streams of thought in response to your introduction to the concept of Perfect Contingency: the first thought is how does contingency relate to choice and the human brain’s limited capacity to handle too many choices? I am reminded of “The Paradox of Choice” which tells us that when faced with too many choices we find ourselves feeling overwhelmed and the supposed freedom that comes with choice instead becomes a form of torture. This outcome isn’t a pleasurable experience! The second thought relates to Daniel Kahneman’s “Thinking Fast and Slow:” to what extent are marketers through the adaptation feedback loop able to appeal to our needs, desires and pleasures by tapping into our instinctual rather than our rational minds? I guess one could say that this is what marketers have been doing ever since marketing began but now instead of using a hammer they have far more precise and potentially incidious tools.

  • http://www.facebook.com/cafulcura Pablo Ibarrolaza

    Understanding media: “we become what we behold… we shape our tools and afterwards our tools shape us” McLuhan

    • kiran bhanushali

      Wow, that is deep.

    • http://www.nirandfar.com/ Nir Eyal

      Truer than ever.

  • vinaeco

    I’m not sure I agree with Perfect Contingency being the driver of our more addictive world. I think that in a digital age we’re about to stimulate a whole bunch of core pathways associated with either pain (rejection) or pleasure (validation or reward) .. a lot more often and easily. Where as previously doing this required a larger physical action (barrier) or an actual physical product. The software guys are working out you can trigger this all with basic, small software interactions… and now those are available 24×7 in your pocket. The thing that makes twitter highly addictive isnt so much the curation but the validation. No one really does care what you ate for breakfast, but when you invest in writing about it in a funny way or taking an ultra cool picture of it … and some one else likes it … well..

  • MaleMailMan

    “During the golden age of branding, companies found they could create
    demand and increase consumption by giving their goods unique identities
    and for the first time, create associations in the consumer’s mind.”

    A good example here would be De Beers. Diamonds were not considered rare or something worth of value until Ogilvy & Mather spent decades branding the diamond as expensive, rare, a must have for weddings, a “girl’s best friend”, etc..

  • kiran bhanushali

    Good post. The last paragraph is maybe more suited to web sites/apps or smartphone apps which adapt their behavior based on the way the user uses the tool. I have noticed in my own behavior that I tend not to click/tap on videos or links on which I have an intuition that the other related content that comes on the next page will not be something I like. So almost like training the tool while the tool also trains me on how to best use it.

  • KirstenNelson

    I’ve given a fair bit of thought to the addictive nature of our world today–especially as a mom and watching my two little boys find their own addictions. The point of perfect contingency is simultaneously awesome and a bit scary. I love how it makes so many things possible and nearly effortless. But it also makes me wonder how this shift will affect the new generation and the world that they will live in. Basic skills such as handwriting and grammar and spelling are declining as texting and typing are replacing it. I’m sure that has implications for brain development. As well as the shift from working to get what you want to instant gratification. But because this is new territory, can we really say that these shifts are a bad thing? It may just be another evolutionary step. Enjoyed the post very much. Thanks!