In the digital age, data has evolved into an invaluable asset for various business sectors, with marketing being one of the primary beneficiaries. The post-pandemic surge in digital device usage has facilitated a remarkable influx of accessible consumer data, with every transaction on Amazon or view on TikTok or YouTube contributing to billions of data points generated per second. While this data deluge facilitates unprecedented insights into consumer behaviour, it presents a challenging dilemma: how can marketers filter this information overload to derive valuable insights? More crucially, how can marketers utilise this data to comprehensively understand consumer motivations and needs and, what’s more, to predict them?

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Could Personality-Based Targeting be the Next Frontier in Consumer Engagement?

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Behavioural Psychology applied to targeting is a rather innovative approach that allows for the identification of behavioural patterns based on the analysis of personality types and digital footprints but without processing any personal data. This approach empowers marketers to engage in meaningful interactions with tailored messages, offer products and services that resonate with consumers’ needs and even predict their desires. This is a transformative leap from traditional psychographic targeting, which relies on marketers’ intuition to categorise customer segments based on their opinions, attitudes, and lifestyle choices.

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By employing personality theories, marketers can delve deeper than mere generic shared characteristics, understanding the underlying emotions and triggers that make us human. The result is a more targeted, and hence more effective marketing strategy.

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The use of such behavioural data in various sectors has gained traction. McKinsey experts, as early as five years ago, concluded that lending institutions could significantly enhance collection success by applying innovative treatments grounded in behavioural segmentation. Several startups are now offering behavioural data for brands to tailor the most effective advertising in gaming. This usage is exemplified by the behavioural marketing platform Wunderkind, which raised $76 million in a Series C round in March this year.

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Time for Rehabilitation: The OCEAN Model in the Post-Trump Scandal Era

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Among the various personality models, the most popular is the Big Five – also called the OCEAN model – which measures five dimensions: openness to experience, conscientiousness, extroversion, agreeableness, and neuroticism. Although other dimensions, such as personal values, motivational orientation, or moral foundations, could be beneficial for psychological targeting, the Big Five model continues to dominate research and practice.

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OCEAN came to light in 2018 following Cambridge Analytica’s involvement in the 2016 U.S. presidential election. Allegedly, the company created psychological profiles of millions of Facebook users without their knowledge and targeted them with fear mongering political ads tailored to their psychological vulnerabilities.

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Opinions about the potential of psychological targeting range from viewing it as a formidable tool of psychological warfare to dismissing it as marketing gimmickry. Although the Cambridge Analytica case is not the best testament to the best use of the OCEAN model, it nonetheless drew attention to the effectiveness of personality-based targeting. Cambridge Analytica gathered psychological survey data, built algorithms to predict psychological traits, and thereby modeled consumer personalities, micro-targeting voters based on their profiles.

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The Cambridge Analytica scandal eventually led to the company’s dissolution, but not the method. As associate professor at the Columbia Business School, Sandra Matz explained for how psychological targeting is not the manipulative tool that Cambridge Analytica purported it to be. Instead, she argued, it is a potent marketing tool that can shift opinions and attitudes, create previously nonexistent demand, and engage consumers on an unprecedented personal level.

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Harnessing Behavioural Insights: What Can Marketers Achieve?

Marketers aim to create value for businesses and stakeholders by tapping into people’s psychological needs and motivations. Personality types predict preferences for marketing messages and communication styles. For instance, conscientious individuals appreciate numbers and details, while less conscientious people might be more easily swayed by compelling narratives. Open-minded people may be impressed by eye-catching visuals and eloquent language, while more conventional individuals may prefer conservative graphics and basic, respectful language.

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Personality-based targeting allows companies to translate behavioural data into personas for individual customers. Matz’s explains how Hilton Hotels created personalised travel recommendations based on Facebook users’ detected personality traits. This campaign reached 60,000 users in three months, garnered an award for the most innovative travel marketing campaign, and bolstered Hilton’s return on investment and brand visibility.

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Another example provided by Matz and her colleagues is a study where they tailored the persuasive advertising messages for a UK-based beauty retailer to recipients’ extraversion, a personality trait reflecting the extent to which people seek and enjoy company, excitement, and stimulation. People scoring high on extraversion are described as energetic, active, talkative, sociable, outgoing, and enthusiastic; people scoring low on extraversion are characterised as shy, reserved, quiet, or withdrawn.

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One set of ads spoke to extroverts’ craving for stimulation, excitement, and attention, and another set played into introverts’ desire for quiet, high-quality “me time.” The extroverted ads were colourful, featuring women in highly social settings (say, in the middle of the dance floor) and alluding to their need to be seen (“Dance like no one’s watching, but they totally are”). The introverted ads were subtle, showing a solitary woman in a peaceful context and hinting at her reserved nature in the copy (“Beauty doesn’t have to shout”). From this experiment, the researchers concluded that the ads that were customised by personality were 50% more effective at attracting purchases and generating revenue than those that were not.

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The main question is how to identify the psychological traits of potential customers, segment them as effectively as possible, and do it all without using personal data and with strict adherence to all privacy requirements. The proliferation of smartphones and new technologies are opening those doors.