Researchers at the University of Texas-Austin and the Copenhagen Business School published a new paper in the Marketing Journal which offers actionable advice to managers on the deployment of algorithms in marketing contexts.
The study, to appear in the Marketing Journal, is titled “When Algorithms Fail: Consumer Responses to Brand Damage Crises Caused by Algorithm Errors” and is written by Raji Srinivasan and Gulen Sarial-Abi.
Marketers increasingly rely on algorithms to make important decisions. A perfect example is the Facebook news feed. You don’t know why some of your posts are showing up on some people’s News Feeds or not, but Facebook does. Or how about Amazon recommending books and products to you? All these elements are driven by algorithms. Algorithms are software and are far from perfect. Like any software, they can fail, and some fail dramatically. Add to that the glare of social media and a small glitch can quickly turn into a crisis of brand damage and a huge PR nightmare. Yet we know little about consumer responses to brands following such brand damage crises.
First, the research team finds that consumers penalize brands less when an algorithm (versus humans) causes an error that causes a brand damage crisis. In addition, consumers’ perceptions as to which agency the algorithm has for the error and the resulting liability for the harm caused mediate their less negative responses to a brand following such a crisis.
Second, when the algorithm is more humanized – when it is anthropomorphized (e.g. Alexa, Siri) (vs no) or machine learning (vs no), it is used in a subjective task (vs objective), or an interactive (vs. non-interactive) task – consumer responses to the brand are more negative following a brand damage crisis caused by an algorithm error. Srinivasan says that “marketers should be aware that in contexts where the algorithm appears to be more humane, it would be wise to have increased vigilance in deploying and monitoring algorithms and providing resources to manage the consequences of brand damage crises caused by algorithm errors. “
This study also generates information on how to deal with the consequences of brand damage crises caused by algorithm errors. Managers can highlight the role of the algorithm and the algorithm’s lack of agency for error, which can reduce consumers’ negative responses to the brand. However, highlighting the role of the algorithm will result in negative consumer responses to the mark for an anthropomorphized algorithm, a machine learning algorithm, or if the algorithm error occurs in a subjective or interactive task, this which tends to humanize the algorithm.
Finally, the information indicates that marketers should not make public the human oversight of algorithms (which may in fact be effective in correcting the algorithm) in communications with customers following brand damage crises caused. by algorithm errors. However, they should make known the technological oversight of the algorithm when using it. The reason? Consumers are less negative when there is technological oversight of the algorithm following a brand damage crisis.
“Overall, our results suggest that people are more forgiving of the algorithms used in algorithmic marketing when they fail than humans. We see this as a silver lining in the face of the increasing use of algorithms in marketing and their inevitable failures in practice, ”says Sarial-Abi.
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Material provided by American Marketing Association. Original written by Matt Weingarden. Note: Content can be changed for style and length.