[Research Round-Up] New Study Shows the Continuing Value of B2B Thought Leadership

Source:  Edelman and LinkedIn

(This month's Research Round-Up discusses the sixth edition of the B2B thought leadership impact study by Edelman and LinkedIn. This research has consistently provided valuable insights about the impact of thought leadership content on the perceptions and behaviors of business decision-makers.)

Edelman and LinkedIn recently published the findings of their 2024 B2B thought leadership impact study. The study involved a survey of 3,484 business leaders (all LinkedIn members) from a wide range of industries and company sizes. The survey was conducted November 30 - December 14, 2023, and included respondents from the United States, Canada, the United Kingdom, Germany, Singapore, Australia, and India.

The study defined "thought leadership" as "content that offers expertise, guidance or a unique point of view on a topic or in a field."

Some of the study results were reported by type of survey respondent. The three categories used in the study were: 

• B2B Decision-Makers - "Company executives who consume thought leadership and are involved in making final decisions on their company's choice of professional service providers or products."

• C-Suite Executives - "Company owners, partners and founders who consume thought leadership and who have complete or partial ownership of a company, or C-Suite-level executives with responsibility for a business function."

• Producers of Thought Leadership - "Managers (and higher) who both consume thought leadership and work for an organization that produces free thought leadership."

Here's a recap of some of the study's major findings.

As with previous editions of the study, the researchers asked survey participants about their consumption and overall view of thought leadership content.

• 52% of B2B Decision-Makers and 54% of C-Suite Executives said they spend (on average) an hour or more per week reading thought leadership content.

• 73% of B2B Decision-Makers said an organization's thought leadership content is more trustworthy than its other marketing materials for assessing the organization's capabilities and competencies.

• 48% of B2B Decision-Makers said the overall quality of the thought leadership content they read is good, but only 15% said it is very good or excellent.

Thought Leadership and Out-of-Market Buyers

A major theme of this study is the value of using thought leadership to engage potential buyers who aren't ready to buy. Findings in the 2024 study indicate that good thought leadership content can stimulate demand among out-of-market buyers by prompting them to rethink their status quo.

For example, more than 75% of B2B Decision-Makers and C-Suite Executives said thought leadership content had led them to research a product or service they hadn't previously considered, and of these respondents, 60% said thought leadership content had made them realize their organization could be missing out on a significant business opportunity.

The study also addressed the importance of providing thought leadership content to existing customers. The survey found that good thought leadership content (from a competitor) can lead many B2B buyers to question whether they should continue working with an existing supplier and realize that other suppliers had a better understanding of their challenges.

What Drives the Quality of Thought Leadership

The Edelman/LinkedIn study also asked participants about the attributes of effective thought leadership content.

Sixty-two percent of B2B Decision-Makers said that average or above average thought leadership content is produced or written by prominent or well-respected experts, and 66% said it has a unique format or style that makes it stand apart from other thought leadership content.

B2B Decision-Makers also identified three other attributes that characterize the highest quality thought leadership.

• 55% said it is supported by strong research and data

• 44% said it helps them better understand the challenges and opportunities their business is facing

• 43% said it includes concrete guidance and case studies

The Takeaway

Like its predecessors, the 2024 Edelman/LinkedIn B2B thought leadership impact study provides marketers important insights into the impact of thought leadership on the perceptions and behaviors of B2B buyers. It also confirms the continuing power and value of authoritative and well-crafted thought leadership content.

[Book Review] Jonah Berger Unveils the Hidden Power of Words

 " Saying you 'recommend' rather than 'like' something makes people 32 percent more likely to take your suggestion."

"Adding more prepositions to a cover letter makes you 24 percent more likely to get the job."

"And saying 'is not' rather than 'isn't' when describing a product makes people pay three dollars more to get it."

Source:  HarperCollins Publishers

These are just a few examples of the power of language cited by Jonah Berger in his latest book, Magic Words:  What to Say to Get Your Way (HarperCollins Publishers, 2023).

Jonah Berger is a professor of marketing at the University of Pennsylvania's Wharton School and the best-selling author of Contagious, Invisible Influence, and The Catalyst. 

He has published over 80 articles in top-tier academic journals, and his work is frequently covered in popular media outlets like The New York Times and Harvard Business Review.

Berger is a recognized authority in the field of consumer language research, which can be generally defined as research concerned with the language used and consumed by marketplace participants such as consumers and marketers.

Recent advances in natural language processing and machine learning, together with affordable access to massive computing power, have raised interest in the field of consumer language research and made larger, more meaningful studies technologically feasible and economically practical.

Most marketers recognize that effective content is essential for marketing success. However, marketers don't always realize that minor changes in the specific words they use can have a major impact on content effectiveness. Magic Words is a worthwhile read because it raises marketer awareness of this important topic. 

What's In the Book

Jonah Berger spells out his rationale for writing Magic Words in the Introduction.

". . . while we spend a lot of time using language, we rarely think about the specific language we use. Sure, we might think about the ideas we want to communicate, but we think a lot less about the particular words we use to communicate them . . .

The right words, used at the right time, can change minds, engage audiences, and drive action . . .

This book uncovers the hidden science behind how language works and more important, how we can use it more effectively."

(Emphasis in original)

Berger devotes most of the book to a discussion of six categories of magic words. Specifically, he focuses on words that:

• Activate identity and agency (Chapter 1)
• Convey confidence (Chapter 2)
• Ask the right questions (Chapter 3)
• Leverage concreteness (Chapter 4)
• Employ emotion (Chapter 5)
• Harness similarity (and difference) (Chapter 6)

In Chapter 7 of Magic Words, Berger argues that words ". . . not only influence and affect the people who listen to or read them, they also reflect and reveal things about the person (or people) who created them." (Emphasis in original) Therefore, he contends, language science techniques can be used to detect and reveal societal beliefs and biases.

Chapter 5 of Magic Words exemplifies the kinds of insights found throughout the book. In this chapter, Berger explores why emotional language enhances engagement in most circumstances. He discusses the value of tapping into both positive and negative emotions and why it's important to move frequently between positive and negative emotions whenever possible. He also explains why creating some uncertainty can enable your content to hold attention.

My Take

Magic Words is a thought-provoking book that would be useful for anyone who needs to communicate more effectively and persuasively. The fact that just about everyone has this need at least occasionally explains the widespread appeal and popularity of the book.

Magic Words is a particularly valuable resource for people like marketers and salespeople whose professional success is largely dependent on their ability to be effective and persuasive communicators.

The book is also an easy read because Jonah Berger's writing style is engaging. He is an academic with the rare ability to make a complex topic accessible to a non-academic audience. He uses real-world examples and anecdotes throughout the book that any reader can relate to.

One of the book's most important lessons for marketers is that the "magic words" discussed in the book aren't equally magical in all circumstances. Which words will work best depends on the context in which the words are used.

In Chapter 4, for example, Berger writes that concrete words are usually more effective than generic words. Concrete language signals that you understand the specific needs of a prospect or customer, and it makes your message easier to understand and more memorable. However, Berger also writes that abstract language often works better when the goal is to convey the potential of an idea, a new product, or a new business.

In every category of the magic words he discusses, Berger points out that there are "exceptions to the rule," or more accurately, that some circumstances will call for a different, and perhaps contradictory, approach.

So, in the end, Magic Words does two things that make it a valuable read for marketers. First, it demonstrates the power of specific language choices. And second, it reinforces the over-arching principle that context should ultimately dictate the choices you make. If you're involved in creating content, Magic Words should be on your reading list.

Halos, Horns, and Content Marketing

Source:  Shutterstock

If you've ever bought or sold a house, you're probably familiar with the concept of curb appeal. Curb appeal is the visual attractiveness of a house as seen from the street, and it's what creates a potential buyer's first impression of the house. Real estate professionals know curb appeal plays a big role in determining how quickly a house will sell and what the selling price will be.

Good first impressions are also important for successful B2B marketing. Today, most potential buyers will form their first impression of your company based on the content you produce. If your content doesn't create a good first impression, potential buyers will quickly turn elsewhere, and you may not get another chance to connect with those buyers. 

In the words attributed to Will Rogers, "You never get a second chance to make a first impression."

When your content creates a good first impression, potential buyers are more likely to come back for more, and they will be more inclined to view the rest of your content - and your company - favorably.

Enter the Halo Effect

This inclination results from a cognitive phenomenon known as the halo effect. The American Psychological Association defines a halo effect as, "a rating bias in which a general evaluation (usually positive) of a person, or an evaluation of a person on a specific dimension, influences judgments of that person on other specific dimensions."

Put more plainly, a halo effect exists when we transfer our perceptions about one attribute of a person or an organization to other attributes of that person or organization without having a rational basis for the transfer. In other words, if we perceive that a company is good at "A," we will tend to think the company is also good at "B," even though we actually know nothing about the company's capabilities at "B." 

The halo effect was first identified by psychologist Edward Thorndike in 1920, and it's been widely studied since that time. Although the halo effect was first applied to the evaluation of people, we now know that halo effects influence how we evaluate inanimate objects including products, services, brands, and companies.

The most important thing to remember about the halo effect is that it magnifies the influence of first impressions beyond what would be justified on a purely rational basis.

Halos Are Everywhere

The halo effect can be found in a wide range of human judgments. For example:

• If I meet a likable person, I will be inclined to believe he or she is also generous and ethical, even though I know nothing about the person's generosity or ethics.

• If I have a good experience with a Honda automobile, I'll be inclined to believe I will also be happy with a Honda lawnmower, even though I know nothing about the quality of Honda lawnmowers.

• If I find one of your company's white papers to be valuable, I'll be inclined to believe other content produced by your company is likely to be valuable. I'll also be inclined to believe your company is probably good at what it does even if I know little about your company.

Halo Effect's Evil Twin

The halo effect is most frequently discussed in the context of irrational positive evaluations, but the same cognitive mechanism can also produce irrational negative judgments.

If I attend a webinar hosted by your company and find the content to be poor, I'll be inclined to think the other content produced by your company probably isn't very good. In addition, my webinar experience may lead me to form a negative overall impression of your company.

This negative manifestation of the halo effect is called, appropriately, the horn effect. 

Implications for Marketing

As a B2B marketer, it's important to recognize that almost every content resource you publish has the potential to trigger (or contribute to) a halo effect or a horn effect. Therefore, one obvious lesson is that you can benefit from halo effects (and avoid horn effects) if you consistently produce content that will create a good first impression with potential buyers.

I would also argue that the potential benefits of halo effects should influence how you think about content distribution. Marketers have been debating the use of gated vs. ungated content for the past several years. While opinions vary, the conventional view is that it's appropriate to gate very-high-value content resources, while keeping other resources ungated.

I contend this is the wrong approach. Suppose you have created a content resource that is truly outstanding, one that is likely to make a good impression on potential buyers. In that case, you should want that resource to reach (and be consumed by) as many potential buyers as possible. The last thing you want is to put any hurdles between your content resource and your target audience.

If a potential buyer is impressed with your content, he or she is likely to seek out other content you've produced. And when the potential buyer is ready to begin an active buying process, your company will likely be included in his or her initial consideration set of potential vendors.

The benefits of halo effects aren't always immediate, but they can be powerful.

Remembering the Life and Work of Daniel Kahneman

Daniel Kahneman, the renowned psychologist best known for his groundbreaking work on the psychology of human judgment and decision-making, died this past Wednesday at the age of 90.

Dr. Kahneman is widely regarded as one of the intellectual founders of the behavioral science discipline now called behavioral economics. He was awarded the Nobel Prize in Economic Sciences in 2002 even though he never took a course in economics.

Dr. Kahneman earned his PhD in psychology at the University of California, Berkeley. He began his academic career as a lecturer in psychology at The Hebrew University of Jerusalem in 1961. He later taught at the University of British Columbia, the University of California, Berkeley, and Princeton University.

At the time of his death, Dr. Kahneman was Professor of Psychology and Public Affairs Emeritus at the Princeton School of Public and International Affairs, and the Eugene Higgins Professor of Psychology Emeritus at Princeton.

Dr. Kahneman gained prominence in the 1970s when he and fellow psychologist Amos Tversky published several scientific papers describing their research on human decision-making under uncertainty. 

Kahneman and Tversky challenged the long-standing notion that people make economic decisions on a purely rational basis. They argued that people regularly rely on mental shortcuts known as heuristics that make us subject to several cognitive biases.

In his 2011 best-selling book, Thinking, Fast and Slow, Dr. Kahneman described his views regarding human judgment in non-academic terms and introduced his now-famous "System 1-System 2" model of human decision-making. Thinking, Fast and Slow has achieved seminal status, and in my opinion, it should be required reading for all business, marketing, and sales leaders.

Like thousands of others, I have been greatly influenced by the views advanced by Daniel Kahneman. When I learned of his death, I looked back at the posts I've published here and found that I've discussed or referred to his work in no fewer than 20 posts.

One of my earliest discussions of Dr. Kahneman's work was published in March 2015, and to commemorate his life and work, I've reproduced that post below. Even after nine years, the material in the post is still remarkably relevant.

Fair winds and following seas, Professor Kahneman.

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Why You Need Marketing Content for Two Ways of Thinking

This is the second of several posts about the role of behavioral economics in marketing, particularly in content marketing. In my first post, I introduced the topic of behavioral economics and argued that it's critical for marketers to understand the psychological aspects of human decision-making and to incorporate those factors into marketing strategy and marketing communications.

Behavioral economics challenges a fundamental assumption of mainstream economics. For decades, economists have assumed that people make economic decisions rationally. The traditional view says that people weigh the economic costs and benefits of proposed actions, have relatively stable preferences, and usually act to maximize their economic self-interest. Behavioral economics holds that people don't always make rational economic choices because they unconsciously use heuristics (mental shortcuts) that produce several cognitive biases.

In his landmark book Thinking, Fast and Slow, psychologist Daniel Kahneman - whose research with fellow psychologist Amos Tversky laid the foundation for behavioral economics - argues that heuristics and biases originate in the ways we think and learn. Kahneman says that the cognitive processes used by humans can be thought of as two "systems."

• System 1 (fast thinking) operates automatically, quickly, with little or no effort, and with no sense of voluntary control.
• System 2 (slow thinking) consists of thinking processes that are reflective, controlled, deliberative, and analytical. 

According to Kahneman, when we think of ourselves, we identify with System 2, our rational self, but System 1 actually originates many of the impressions and feelings that are the sources of the explicit beliefs and deliberative choices of System 2. 

Kahneman puts it this way:  "System 1 continuously generates suggestions for System 2:  impressions, intuitions, and feelings. If endorsed by System 2, impressions and intuitions turn into beliefs, and impulses turn into voluntary actions. When all goes smoothly, which is most of the time, System 2 adopts the suggestions of System 1 with little or no modification."

Therefore, System 1 exerts a powerful influence on the economic decisions we make, including decisions about the purchase of products or services.

System 1 thinking is valuable and, in fact, essential to our well-being. We live in a world that is both complex and rapidly changing, and we don't have the time, energy, or information-processing capacity to consciously and deliberately analyze every event or circumstance that we encounter. If we didn't have a mechanism for thinking fast, automatically, and effortlessly, we simply couldn't function effectively. The good news is, System 1 is generally good at what it does - the "suggestions" that it makes to System 2 are usually accurate and appropriate.

However, System 1 also has biases. It tends to make systematic and predictable logical errors in certain circumstances. In Thinking, Fast and Slow, Kahneman identified 22 characteristics of System 1 thinking that can contribute to biased decision-making. All of these characteristics are important for marketers, but some of them are particularly relevant for creating engaging and persuasive content. For example, System 1:

• Links a sense of cognitive ease to illusions of truth - if something is familiar and easy to understand, we are more likely to believe it is true
• Responds more strongly to losses than to gains, which makes framing content messages the right way particularly important
• Infers and exaggerates consistency (the halo effect)
• Sometimes substitutes an easier question for a difficult one

In upcoming posts, I'll discuss how marketers can use these characteristics of human thinking to make marketing content more compelling.

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Image courtesy of nrkbeta via Flickr (CC). 

The Powerful Head Start B2B Marketers Shouldn't Ignore

Imagine you're a world-class athlete about to run a 100-meter dash. Your competitors are also world-class athletes, so the outcome of the race would normally be far from certain.

But in this race, you'll have a major advantage. You'll be allowed to leave the starting line two seconds before the other runners. World-class track athletes usually run a 100-meter dash in about ten seconds. So, with a two-second head start, you're almost certain to win.

In the race to win business and grow revenue, some companies have a significant head start over their competitors. I'm referring to the head start that results when a company, product, or service (which I'll call collectively a brand) is included in the initial consideration set for a prospective purchase.

The importance of the initial consideration set is hard to overstate. In most cases, a B2B buying process begins when a trigger event causes a business person (the potential buyer) to feel a need or desire to solve a problem or seize an opportunity that may require a purchase.

When such a need or desire arises, a potential buyer will quickly create a mental list of the brands he or she feels are worth considering, i.e. an initial consideration set.

This initial consideration set is based on the mental impressions of brands the potential buyer has formed through personal experiences with the brand, marketing messages, news reports, and conversations with colleagues and friends.

Several studies have shown that potential buyers are very likely to select vendors that were in their initial consideration set. Here are two recent examples.

The Bain & Co./Google Survey

Bain & Co. and Google recently surveyed 1,208 people at US companies who were involved in buying several types of business products and services. The researchers also conducted extensive interviews with ten buyers to explore their habits at each stage of the buying journey.

In this survey, 80% - 90% of the respondents (depending on what they were buying) said they had a set of vendors in mind before they did any research. And, 90% of those respondents said they ultimately chose a vendor that was in their initial consideration set.

The WSJ Intelligence/B2B International Survey

In a 2021 survey of business decision-makers by WSJ Intelligence and B2B International, the researchers divided the B2B customer journey into three stages.

The study defined the Pre-Decision stage as ". . . the time between when they had selected a supplier [for a given product/service category] and when the 'trigger' occurred that prompted them to actively begin searching for and deciding on a new supplier."

The survey contained several questions about a recent purchase and asked the participants to reflect on the vendor that was ultimately selected (the winning vendor) and on a vendor that was considered but not selected (the losing vendor).

The survey findings revealed that mental impressions existing during the Pre-Decision stage have a significant impact on purchase decisions.

• Survey respondents were more than twice as likely (79% vs. 37%) to say they were very familiar with the winning vendor versus the losing vendor before their active buying process began.

• At the Pre-Decision stage, respondents had a higher level of pre-existing trust (57% vs. 37%) and confidence (52% vs. 37%) in the winning vendor than in the losing vendor.

The Importance of Mental Availability

So, the research clearly shows that the initial consideration set has a major impact on final purchase decisions. Therefore, marketers should be focused on having their brand(s) included in the initial consideration sets of as many potential buyers as possible. To achieve this objective, marketers need to run marketing programs that will increase the mental availability of their brand(s).

The concept of mental availability was popularized by Byron Sharp and his colleagues at the Ehrenberg-Bass Institute for Marketing Science. According to Sharp, mental availability is the likelihood that a potential buyer will think of a brand in the context of a specific buying situation.

To design marketing programs that will increase mental availability, marketers must keep two important points in mind.

First, increasing general brand awareness isn't enough. Potential buyers create their initial consideration set based on the specific context of each buying situation. Therefore, marketers need to run programs that will build and refresh the memory structures that connect their brand(s) to the specific needs and desires their potential buyers are most likely to experience.

Second, because potential buyers create their initial consideration set quickly after a trigger event occurs, marketing programs designed to increase mental availability need to reach potential buyers before they have started an active buying process. This explains why reaching "out-of-market" buyers is vital for effective marketing.

Increasing mental availability and being included in the initial consideration set of a larger number of potential buyers won't, in itself, guarantee success. The rest of the B2B buying process still matters. But being included in more initial consideration sets provides a head start that B2B marketers can't afford to ignore.

Top image courtesy of tableatny via Flickr (CC).

[Research Round-Up] The Effectiveness of AI-Generated Images for Marketing

Source:  Shutterstock

(This year, I'm devoting some of my Research Round-Up posts to academic research papers relating to the use of artificial intelligence for marketing purposes. This post features an unpublished paper that compares the performance of AI-generated vs. human-made images across three marketing use cases.)

"The power of generative marketing:  Can generative AI reach human-level visual marketing content?"

• Authors - Jochen Hartmann and Yannick Exner, Technical University of Munich; Samuel Domdey, Technical University of Hamburg-Harburg

• Date Written - July 12. 2023

This paper describes the results of three studies designed to evaluate the performance of AI-generated vs. human-made images used for marketing purposes. Specifically, the studies evaluated image performance across three dimensions relevant to marketing.

• Human perception of image quality and realism
• Social media engagement
• Click-through rates of banner ads

The studies used AI-generated images created with 13 text-to-image diffusion models, including DALL-E2, Jasper, Midjourney v4, and several versions of Stable Diffusion. Altogether, these studies collected more than 17,000 human evaluations of over 1,500 AI-generated images.

All of the AI-generated images in these studies were created using a two-step process. In the first step, the researchers employed an image-to-text AI model to create a textual description of each human-made comparison image. These textual descriptions were then used (without modification) as the prompts to produce the AI-generated images.

Here are abbreviated descriptions of the three studies and the high-level results of each study.

Study 1 - Human Perception of Quality and Realism

The objective of this study was to compare the perceived quality and realism of AI-generated vs. human-made images across three marketing use cases - product design, social media, and print ads. 

Each image was rated by five human evaluators for quality and realism using a 7-point Likert scale (1 = low, 7 = high), resulting in a total of 7,830 ratings.

The ratings for quality and realism varied depending on the specific image being evaluated and on the model used to create the AI-generated image. Overall, however, the study revealed that the AI-generated images outperformed or were on par with the human-made images in the product design and social media use cases.

In the print ad use case, the AI-generated images were significantly less likely to perform on par with the human-made images in terms of perceived quality and realism.

Again, the ratings varied significantly depending on the model used to create the AI-generated image. So, the choice of model matters.

Study 2 - Social Media Engagement

This study's objective was to compare the ability of AI-generated images vs. a human-made image to produce engagement in a social media setting. In this study, engagement referred to the "likelihood to like" an image and the "likelihood to comment" on an image.

This study included one human-made image and 13 AI-generated images. The researchers recruited 701 participants who were randomly assigned to one of the 14 images. Each participant was asked to rate how likely they were to like or comment on an image using a 7-point Likert scale (1=low, 7=high).

The results of this study showed that the AI-generated images generally performed on par with the human-made image in terms of social media engagement.

Study 3 - Click-Through Rates On Banner Ads

The objective of this study was to compare the effectiveness of AI-generated images vs. a human-made image when used in an online banner ad. The measure of effectiveness used was click-through rates (CTR).

This study was a randomized field experiment that consisted of a real-world online banner ad campaign run on a leading display advertising platform. The human-made image was a professional photo purchased from Adobe Stock. The campaign ran December 28-29, 2022, and generated 702 clicks on 86,809 impressions.

Of the 14 images tested, the human-made image ranked 10th in terms of CTR. The best-performing AI-generated image achieved a 21.5% higher CTR compared to the human-made image.

This study also demonstrated that model choice matters. The best-performing AI model (Stable Diffusion v1-3) outperformed the worst model (Disco Diffusion) by 65.5%.

My Take

The three studies described in the Hartmann et al. paper demonstrate that generative AI models can create visual content that is on par with - and often better than - human-made images for a variety of marketing use cases.

If anything, these studies probably underestimate the ability of generative AI models to produce human-level visual content. The prompts used to create the AI images for these studies were produced by an image-to-text AI model, and the researchers didn't modify those prompts. Prompts engineered by experienced marketers would likely have resulted in more effective AI images.

These studies also probably underestimate the quality of images generative AI models can currently produce because new, more capable versions of some of the models used in the studies have been released since the studies were conducted. For example, these studies used DALL-E2 and Midjourney v4, but DALL-E3 and Midjourney v6 are now available.

At minimum, the results of these studies suggest that AI-generated images are likely to play an increasingly important role in marketing.

[Book Review] Why Marketers Should Think Like World-Class Poker Players

Source:  Penguin Random House

The idea that marketers need to think like world-class poker players may seem a little odd, but that's the primary lesson I take from Annie Duke's book, Thinking in Bets:  Making Smarter Decisions When You Don't Have All the Facts (Portfolio/Penguin, 2018).

Thinking in Bets isn't specifically about marketing, but it describes an approach to thinking about decisions that would serve marketers well. So, if you haven't read Thinking in Bets, I recommend you add it to your 2024 reading list.

Annie Duke is a recognized authority in the field of decision-making, but her professional journey has been a little unusual. She graduated from Columbia University with degrees in English and psychology, and she has a master's degree in cognitive psychology from the University of Pennsylvania. She had finished her PhD coursework at UPenn when she became ill and was forced to take a leave of absence.

During her leave of absence, Duke moved to Montana and began to play poker. She became a professional poker player and, over a twenty-year career, she won numerous high-level poker tournaments, including the prestigious World Series of Poker. During her career, Duke won over $4 million in poker tournaments.

Duke retired from professional poker in 2012 and just last year completed her doctoral work and earned a PhD in cognitive psychology from UPenn. She's now a sought-after corporate speaker and a consultant on decision strategy.

What's In the Book

Annie Duke describes the primary purpose of Thinking in Bets in these terms:

"The promise of this book is that if we follow the example of poker players by making explicit that our decisions are bets, we can make better decisions and anticipate (and take protective measures) when irrationality is likely to keep us from acting in our best interest."

Duke's core argument is that the significant decisions we make in life are essentially bets on the future, and she elaborates on this argument in the first three chapters of the book. She writes:

". . . our decisions are always bets. We routinely decide among alternatives, put resources at risk, assess the likelihood of different outcomes, and consider what it is that we value. Every decision commits us to some course of action that, by definition, eliminates acting on other alternatives."

According to Duke, uncertainty is the factor that makes our decisions like bets in a poker game. When you place a bet in poker, you can't know for sure that you will win the hand. And, when we make any significant decision, we can't know with certainty that our decision will produce the desired results.

One key to becoming a better decision-maker is developing the ability to effectively cope with the uncertainty that's inherent in all significant decisions. She writes:

"What good poker players and good decision-makers have in common is their comfort with the world being an uncertain and unpredictable place. They understand that they can almost never know exactly how something will turn out . . . instead of focusing on being sure, they try to figure out how unsure they are, making their best guess at the chances that different outcomes will occur."

Duke acknowledges that becoming comfortable with uncertainty is easier said than done. She observes that the human brain evolved to create coherence and certainty, and this makes us prone to illogical thinking and several cognitive biases. Duke describes the hazards of such illogical thinking and cognitive biases throughout Thinking in Bets.

Lastly, Duke devotes more than half of her book to a discussion of several tactics that will help us develop our ability to "think in bets" and make better decisions.

In Chapters 4 and 5, Duke describes how we can use a "decision group" or a "decision pod" to help us maintain our decision-making discipline and thus improve our decision-making skills. In Chapter 6, she discusses scenario planning, backcasting, premortems, and several other valuable tactics that she calls forms of "mental time travel."

My Take

Thinking in Bets is a valuable resource for any marketer. Annie Duke's writing style is informal and engaging, and she makes liberal use of stories that are always on point and often amusing.

As I mentioned earlier, Thinking in Bets isn't specifically about marketing. However, the decision-making principles described in the book are universal. I would argue that Thinking in Bets is especially relevant for marketers because the outcomes of most significant marketing decisions depend on the reactions and responses of other human beings. This means that marketing decisions often involve greater uncertainty than other kinds of business decisions.

Thinking in Bets is a self-help book in the sense that it focuses primarily on how we can improve our individual decision-making. However, Duke offers several suggestions for how business leaders can improve decision-making in their organization.

Duke argues that it's particularly important for business leaders to encourage skepticism and the expression of dissenting views in their decision-making processes. One way to operationalize skepticism and dissent is by using "red teams."

Duke describes the role and value of red teams in these terms:

"Just as the CIA has red teams and the State Department has its Dissent Channel, we can incorporate dissent into our business and personal lives. We can create a pod whose job (literally, in business, and figuratively, in our personal life) is to present the other side, to argue why a strategy might be ill-advised, why a prediction might be off, or why an idea might be ill informed. In so doing, the red team naturally raises alternative hypotheses."

Thinking in Bets won't teach you how to make specific marketing decisions, but it will help you make better marketing decisions.