Targeted Advertising

EconBuff Podcast #25 with Robert King

Dr. Robert King talks with me about targeted advertising. Dr. King walks us through the differences between traditional and digital advertising. We explore how businesses collect data used for advertising, and Dr. King explains that traditional marketing is still more prominent and takes up larger portions of marketing budgets than digital advertising. Dr. King argues that business is best conducted as a relationship between customer and producer and discusses the impacts of bad actors among marketers. Dr. King argues increases in data base sizes and availabilities have lead to advances in how companies can understand consumers, and explains that social networks are the key in targeted digital advertising. Finally, Dr. King discusses the acquisition of Fitbit by Google, and we explore how Dr. King views changes in advertising tailored to the individual.

Photo by Adam Birkett on Unsplash

Transcript

Stitzel: Hello to the EconBuff Podcast. I'm your host, Lee Stitzel. With me today is Dr. Robert King, The Assistant and Wilder Professor of Marketing at West Texas A&M University. Robert, welcome.

King: Thank you for having me.

Stitzel: So, our topic today is targeted advertising. And hopefully we'll get into more than just what the idea is itself, but what are some of the really recent developments in it. But so, just start us out with an idea of what targeted advertising is.

King: O.K. so we'll go macro, and then we'll pull it to micro.

Stitzel: Yeah.

King: And so we'll break apart advertising into two big overarching components of traditional and digital just for ease. And so traditional would be like your mailers [and] stuff like that. And digital's obviously anything in the digital space. And so, when we use the word targeted now it's probably more focused on the digital side. And what that is saying that we have enough information to actually reach you as a person. And so, I'm wanting to sell, you know, workout equipment or something like that. We both have workout equipment at our houses, but we do different things with those pieces of equipment. So, they would reach you in a different way than they would reach me by what they're showing you, because they're targeting us in different ways. And so, at the very large --- the very macro view is [that] it's just getting the right variables into the model, so we know exactly how to reach people.

Stitzel: So, the idea here is you're singling out individuals going, sort of, beyond a group; or say I'm trying to target this at people who want equipment in their house…

King: Hmm mmm.

Stitzel:…into something even further. So, what gives it that granularity if you will? Like, I like the example of home workout stuff.

King: Hmm mmm.

Stitzel: That's the thing that I'm into as listeners to the podcast will know. But, you know, I have a specific thing that I'm doing, right? I'm competitive power lifting, right? So there's no jazzercize…

King: [Laughs]

Stitzel:…in my…

King: Well, you actually touch on what I do is the jazzercize…

Stitzel: [Laughs]

King:…because that's my thing. Me --- I’m a, [well] as people who know me --- Pilates and jazzercize are…

Stitzel: [Laughs]

King: Exactly what my body type is. Well so, it's what we're looking for is: small bits of information that when we put it together, [then] we can find out a little bit more about you. And so, when you start thinking about the information that you're putting out there, and what people see of you. And so, if you have a sophisticated enough mechanism, [then] you can tell that you are a power lifter based on Instagram posts --- or based on what you're searching for in your Google searches, [or] based on credit card transactions, right? Because, you know, it's [that] you can kind of tell it's, like, workout equipment. You know, however much money they are you can go: oh, that's probably what that is. But what we're trying to do is so at another macro scale is what we call segmentation. And so, we don't want to waste our money by advertising power lifting equipment to me. It just doesn't make any sense. I'm not a power lifter. That's just not my thing. So that's a wasted dollar, however much that dollar is. And so, we do by segmenting is saying: all right, this piece of the population they like doing cardio. This subset of the population likes doing power lifting. This subset likes doing Yoga --- whatever it winds up being, and then we can accurately use our dollars. And so, with the collection of data that we have now, we can do that way more accurately. And so, if you ever get bored and you go to, like, (if you're logged into your) Google, and go to --- us if I remember correctly, it's like --- ads for me, or whatever it winds up being, [then] you can see what your profile is on Google. It's really quite useful. It's useful enough that while I'm saying this next sentence, I'm going to look at it because I have a bookmarked, because I actually care about it.

Stitzel: I'll have to pull mine up at some point.

King: Do it. It's quite worth it. So, this is where you're going to plug that back in. It's adssetting.google.com. So adssettings.google.com. And it'll tell you all the things. So it'll tell you my age (which is actually accurate), that I'm a male, [and] that I have like the nest and the stadia app. And it's got all kinds of things that I've searched for --- some stuff that's quite useful [and] some stuff that was like a one-off search [where] you're like: oh, I forgot I even looked at that. And so that's what we're trying to get is those profiles. And so, I just saw a Volkswagen. So they know that we have a Volkswagen, most likely, because I've searched for it. And I log into that at least once a month because that's where I pay for the Volkswagen.

Stitzel: Right.

King: So, it --- that type of information can be targeted because now people know O.K. he doesn't mind having a German car, let's just say, or whatever ends up being, and that's targeted.

Stitzel: But that would separate people, because some people want American-made…

King: Yeah.

Stitzel:…cars specifically. And some people think, you know, German-made cars are the most reliable or maybe Japanese because so that really does separate people.

King: Yep.

Stitzel: So this kind of an aside as an observation. I do want to circle back around to, sort of, where traditional and targeted diverge. But there's the, like, idea of a one-off search. You know, we we've all had that, because that just that's what we do now if we're in conversation.

King: Yeah.

Stitzel: I think I had one time actually in class, and I had mentioned an example of, like, bottled water and natural resources; [whereas] how that, you know, obvious things that would come up in an econ class. Some students started to tell me about all the different brands of bottled water. Well, that's not a, like, fine point for me that I differentiate between different types of bottled waters, right?

King: Hmm.

Stitzel: And so, I think I had gone back and searched, at some point, a particular brand. It's escaping --- yeah, the brand name is escaping me at this moment. But that, I would think, like, that's one of the things I would look back and have been like: wait, why did I search this brand of…

King: [Laughs]

Stitzel:…bottled water? I'm not a bottled water guy. But then from a data perspective, something --- you would peg me as a powerlifter immediately, even if you didn't have my credit card, because you'd be like: this guy's on the subreddit for powerlifting, like…

King: Yep.

Stitzel:…every other day.

King: Yep. What are his main posts about? What does he like?

Stitzel: Right.

King: What does he comment on? All those little data points are what the, you know --- the crawlers are good at right now, right? So, if you have a one-off, it's just like you. If I say a comment of, like, you know, [that] I really like soccer or whatever, you know, that's probably not my thing. But if I start wearing a jersey.

Stitzel: Yeah.

King: If I start talking to you more in depth about the game, or I buy the sports package and you're aware of that, then you can say: O.K., this probably, he probably cares about soccer now. And so, all those data points start adding up. And the cool thing is that we'll take another kind of bigger macro thing. So, like, with Instagram --- stuff that we've talked about --- those are called social media platforms, right? But there's actually a bigger thing with that called social networks. And the reason why that matters for us in marketing is because if we can get into these small subsets of groups --- and so not to give away who your people are, but you have a group of people --- that fit in with that power lifting set. And so, if I were to map those in someway accurately, if I were to reach you or person X or person Y, [then] I'm kind of like in the group now. And so, that's what social networks are for is that you, probably on your Facebook or whatever you have your high school friends, college friends, junior high friends, power lifting friends, archery friends, [or] whatever your things wind up being. Well, those little nodes are those pieces of the social network. And that's another way we kind of target you.

Stitzel: So, I want to get into that more because of I always it's striking to me how my Facebook, Instagram, and even like YouTube would be a really good example of this, because…

King: Oh yeah.

Stitzel: I've gotten to where I just I can't get enough YouTube content, because there's so many interesting people out there in the world. But it's like --- I feel like if I wanted --- if somebody wanted to know me, [then] you could almost just pull up my YouTube page, right? And you'd be like --- it's chess, golf, poker, and, you know, economics, and then philosophy and theology. And it's just like --- it's an open book as to who I am.

King: Yeah.

Stitzel: And you could even, you can drill down even further into those things, right? Like, the golf videos are people playing and doing funny trick shots. They're not like very hyper-serious…

King: Yep.

Stitzel:…instruction, right? And you are going to look at the videos I'm watching of economists, and you'll be able to figure out which camp of economists I'm in.

King: Hmm mmm.

Stitzel: But it's very interesting that you mentioned that social, what do you call?

King: The social networks.

Stitzel: Yeah.

King: Just like the name of the movie.

Stitzel: Right, which could be interesting to talk about in a moment. But the social network idea, so that's related to individuals that --- and then something about the information that's --- in their circle? Or what's that --- giving to them that not just knowing what my interests are is --- giving to the advertisers?

King: So, right now, let's just say you're with that friend group of your lifting friends, you know, person XYZ and yourself. And then someone else enters the room that you, kind of, want to bring into that group. If they just walk up and start talking, that's going to be super weird, right? But if you go: hey, person W come over here [and] check this out, [then] that's what you're kind of doing with this is it. Let's just say there's a new type of shoe for power lifting, and you try it out, and it's just cash money. And you're like: oh, these are the best shoes I've ever had. Now you found a way to get into that social network group, without actually being in that social network. And so that's usually what we're looking for is a particular user to get in on that, just like you'd have a celebrity endorse some headsets, or like headphones, or whatever. That's what you're trying to do is get into those little groups.

Stitzel: So, you're analogizing the advertising to like relationships or conversations? Or…

King: Well.

Stitzel:…are you making a deeper point?

King: No. I mean, marketing should be about relationships. Marketing is about long-term relationships, and that's how it should be. Because if you have a good experience with those shoes, and then you have, you know, tell your friends about them; and [then] you buy more, but then you also contact the company [and] go: hey, you know, I really would like this I fit. [I would rather it] had a zipper rather than a shoelace or whatever. Then they make a zippered shoe now, [then] they've got you even more, right? And so, there's that symbiosis of I give you money, you give me exactly what I want. And then it goes back and forth, and we're both becoming better for it. Marketing should be relationship based.

Stitzel: One of the things that has come up on the podcast before, and probably hasn't come up enough, you know, is the value of brands as a reputational effect. You know, to, sort of, get away from that sterile idea of competition always being in a negative light; but we develop brand loyalties very quickly and very, very strongly in a lot of cases. You know, some people are completely utilitarian…

King: Yeah.

Stitzel:…and whatever the price or the function they'll just, you know. But I know if I've had a good experience with a particular product --- like, I'm an ambassador for that product now. And I'm not a particularly, like, brand conscious person. It's just like you said --- a relationship with being treated right. And if your customer service is really good and really fast, [then] you buy a lot of leeway. It's actually funny you mention powerlifting and bring this up, because I have had a new specialty bar that I wanted. I saved up my money, and purchased, and I ordered it. Of course, it's all backordered because all the weightlifting equipment in the world is…

King: Almost until February.

Stitzel: Almost until February.

King: Of last year.

Stitzel: Yeah, exactly. And so, it's, like, back ordered for --- I want to say for a month --- like a full month, right? But I had like some account. I didn't get an email from them. So, I'm like: O.K., you took my money but now I don't even have an order number.

King: [Chuckles]

Stitzel: Right? So, I gave it, like, I don't know --- two-three days or something, and I emailed them. And then when it -- the response I got back was very detailed, and, like, obviously not a bot.

King: Hmm mmm.

Stitzel: I was just dealing with me. They sent me an order, and it's like. So immediately they, like, brought down that concern level that I had. Wait! It might be a scam. Now there's a company I've done business with on smaller things in the past. And it's a legitimate company, so I'm not worried about being, like, screwed…

King: Yeah.

Stitzel:…which is another aspect to the brand, and the recognition, and why that kind of thing is important. But I think that idea of, like, marketing to relationship --- I/people feel like marketing and targeted advertising is somehow, like, to take advantage of them.

King: I don't know. That's the thing about marketing is that there is no doubt that marketing can have bad actors. That's just the way it is. I mean, if there's away to possibly manipulate, [then] there are some people [who] will do that. But in my humble opinion, as a pure marketer in the positive sense, it is a positive relationship. I want you to be the best power lifter you can. And the reason why I'm in business is to make those shoes that make you the best. Because as you get better, the more you're going to like my stuff, and then you're going to become a brand advocate. And so you should be thinking that way, right?

Stitzel: In a lot of markets the people that are doing that --- they got started because they fundamentally care about it.

King: Yeah, exactly.

Stitzel: Right. So again, not to harp on powerlifting --- maybe different examples later on. But, you know, there are people that are having these companies because they care about powerlifting, and they're like: oh, but I could. Well, the specialty bar I was telling you about --- it literally got made; because I think I was, like: hey, here's a company I can start to fix this defect in other people's equipment, and now people like me are buying there.

King: Yeah, well that's the thing is that why do markets exist? Well, because you and I were doing something. And all of a sudden we went: you know, it'd actually be better --- a bar with a double layer or whatever.

Stitzel: Yeah.

King: It has a, you know, lowered down or whatever it winds up being; because we're seeing a market need. The market need exists because I have a passion for that. It's very unlikely that someone's going to create something for powerlifting that probably doesn't even participate in it.

Stitzel: Right.

King: They're at least going to have some, sort of, a tie to it --- whether, you know, you see, I mean like, you see, like, your wife doing something. You're like: oh, this is actually/this is what we should be doing, right? This is how you fix this problem. And so, that's why markets exist, right? It's not like someone's just like: nah, I'm gonna get on this market by forcing this thing that nobody wants on it. It's not going to work.

Stitzel: Right. It's people from within the industry almost all the time, right?

King: Yeah. And so generally you have people who are passionate about it. I really want to, you know. I had an injury, so now I created this different type of bar that's safer for me to squat or whatever it winds up.

Stitzel: It's actually exactly the example.

King: That is.

Stitzel: Oh, it says the specialty bar, safety bar, right?

King: Yeah.

Stitzel: So first so for our non-powerlifting friends in the audience. You've got bars that are straight. So, think of whatever you would picture when you're picturing people lifting with a full-size bar. And that has, sort of, limitations on your shoulders in particular. And so, there's an innovation called a safety squat bar…

King: Yeah.

Stitzel:…which allows you to squat. But then it's got little almost like handles and a pad on, so your hands can be in front of you. And [this] creates kind of, a different pattern, and gives you these other kind of benefits. But it eases the strain on your shoulders while you're squatting, because that's not a muscle you want to be working out…

King: [Laughs]

Stitzel:…when you're squatting. So, O.K. Let me circle back really quickly to that macro idea that you were talking about. So, in some sense, you have this idea with --- maybe this is the wrong terminology with --- the traditional marketing. You can still, like, segment people. It's more likely that a guy would want to be into lifting stuff, right? And it's maybe more likely that people who are, if you know they're into lifting, that they'd be interested in these types of shoes, [then] you can have these, like, really broad correlations.

King: Oh yeah. And so, we always want to focus it down to however refined you need to be, right? So, jumping back to your water example. There are different types of water. I mean, I use this example in class. There's like a $60,000 per bottle of water [per] 750ml [called Acqua di Cristallo Tributo a Modigliani]. it's from this particular well, and this very specific thing. Blah blah blah. And it's like a gold bottle, and all kinds of stuff like that. Well, if you advertise that to the average water user, [then] it's not going to be good for you, right? But there's subsets of that group. We call them target markets. Target markets are what we're actually looking for. Those are people who buy your stuff, or people who you want to buy your stuff. And so Ozarka or whatever the water is (depending on what your area is) --- that's marketed in a completely different way. But you're also trying to reach a different style of person, right? You can probably do Ozarka based on --- you could probably do --- demographics (based on where they're at) and probably price. [Those] are going to be your two biggest things. But if you want to get down to that $60,000 artesian whatever water, [then] you're gonna have to get pretty refined to make sure you're getting all the right variables, because that's gonna be a lot of money to reach those people. And it's gonna be wasted if you don't reach for the right people. So, there's an example of --- oh what's the car? Is it Bugatti or Maserati? Which one of those is a car that's, like, really expensive?

Stitzel: Both of them I think.

King: Oh. Which one's like…

Stitzel: Bugatti’s higher than Maserati.

King: O.K. So, Bugatti. They're pretty well known for their packages they send to people. And so, let's just say [that] I know you're in the market for a Bugatti, because you're going to pay a lot of money for this. You know, you're paying like what $5-6 million dollars for it or whatever. They'll pay hundreds of thousands of dollars for these packages, because it'll have, like, your cigar brand, and your scotch brand, and some tickets to the Lakers or whatever winds up being. And they spend a lot of money. But they know they're getting the right person, because of all the factors that we've looked at. And so, they spend a ton of money, but then they make the money from the positive experience of buying a Bugatti.

Stitzel: And then of course, buying a Bugatti probably isn't you buy it and then you leave the lot and that's that. Like, there's a whole…

King: Yeah.

Stitzel:…that relationship idea comes back because I'm not just going to let the nearest mechanic work on my Bugatti, probably, right?

King: Well, I mean, that's who works on mine. I just have a local guy that works on my Bugatti. But I'm a different level of consumer.

Stitzel: You're just like: hey Joe, and he comes out and just tinkers. Yeah O.K., I love it. So, let's turn a little bit to the digital marketing. And so, by way of transition, I'd like to ask this question. When we're talking about targeted advertising --- in the pre-digital era? Or is that even possible? Like…

King: Oh yeah.

Stitzel:…to me it seems like if we're talking about targeting, we're talking about digital. Those two things overlap.

King: No, I mean traditional. So, the thing about it is another kind of misnomers. We always think that traditional is kind of like boring or not useful. But most people still spend a majority of their marketing budget on traditional, just because it's still useful. Traditional being like radio, television, newspapers, magazines, [and] all those type things. Most budgets are actually spent on that. Now again, if you get something hyper-specific like, you know, a set of headphones or something like that, most of the time --- those are like you see them advertised on Instagram all the time, and all those types of brands are [traditional]. [Even on] YouTube you see a lot of those, but for the most part major brands are still using traditional. And the good thing about it is that we are getting way better with targeting; because not only am I'm buying better data sets, and so I'm buying all the credit card information. I'm buying all of the data that's available, and then I use that for my database marketing of newspapers, television, [and] stuff like that.

Stitzel: So, what's the mindset there? I think maybe a listener is saying: why is a headset considered --- I forgot the words you use but very --- specific? And I don't know, [but] Budweiser or Lexus is not? They just advertise on all the football games.

King: So, just that particular market is. So, I'll change it up for another one too. I mean, like, mattresses or something like that --- those are such a hyper competitive narrow margin, that they can't afford to do some of the traditional, because traditional is usually more expensive. And so, I'm going to spend more of my money on those things that are slightly cheaper, right? So, like, think of it --- the comparison of an email blast to even a mailer, right? I mean, what's mail? Like 50 cents a stamp or whatever? Email's free for the most part, right? And so, I can send out a billion emails; and even if I have a .00001 response rate, that's still really good, right? Even if I get a perfect mailing list, it's still going to be really expensive for all those things. And so generally you're just trying to save money. And so, like you're --- I mean there's even documentaries on the mattress companies making bare minimum margins and all that kind of stuff. That's why. Because they have to compete in an almost free, you know, zero margin market. So that's why they have to live in that space. Budweiser just has a better margin.

Stitzel: So, what's happening there in the mattress market? The number of competitors and the product [differentiation] ---- the number of competitors is high, and the product differentiation is pretty low?

King: Yep. Almost zero differentiation. And so, you generally have brand advocates when there is some sort of a differentiating factor. And so, if you look at the macro level of strategy, there's kind of two you can fall into. Are you low cost, or are you differentiated? And low cost is obviously just that, because the second you get where there's something other than cost that's making my decision, [then] I become differentiated. But I don't know if they didn't have a label on it if you could tell mattress X versus mattress Y. They're all manufactured in the same building. They're all manufactured by the same people. They just, at the very end, they sell on a different label for the most part. I mean, there's obvious exceptions. But at that particular market, they're all hard to differentiate from one another.

Stitzel: And now some people, you know, there are some kind of different competitors ---Tempur-Pedic or the purple --- what's that purple mattress?

King: Hmm mmm.

Stitzel: That's real kind of fun.

King: I think it's actually called purple.

Stitzel: I thought so. So, there's a little bit of differentiation there, but you're thinking about, you know, 90% of the mattress?

King: Yeah. And so just like the headphones thing too. I mean, like, you have your high-end beats, and you have your high and audio technic, and you have all those. But I'm talking about those ones that are, like, that what we would call mass market. These are to meet the most amount of people's needs. They often times, again you have very low margins, and they're not differentiating. They're actually trying to be the low cost.

Stitzel: So, before we move forward, because you brought up the data point --- which I think we want to get into --- what is it that's making something like Budweiser go for the traditional and something like a mattress. Now before you do that, it seems to me that that beers could be pretty different; or they could be perceived, especially if you're talking about something like Budweiser --- as maybe not being that different than Coors is not that different from the Budweiser of course. You've got an entire like, the craft beer market. Craft beers that are just --- it's a totally different ballgame. Every one of them tastes different, you know.

King: Yeah. And so, it depends on what you're so again back to that target market thing. The target market for --- there's a great local brewery called Pondaseta. The Pondaseta target market is generally somewhat different than the Budweiser core market, just because it's a different style. It's a different. The outcome is different for what you're trying to look for. Pondaseta --- you're probably saying you want a different style of flavor. You want to have variety. You want to have, kind of, the experience of it. And a lot of times with Budweiser what I'm looking for is: I know when I crack open a Budweiser it's going to taste the same --- this one, or my ten thousandth one, or my hundred millionth one. They're all going to taste the same. And so, they're just looking for different stuff. And they reach a different style market. Plus, I think a Budweiser is like, you know, $1 or $2 or whatever. And you generally pay a little bit more for craft beer because you put different ingredients and things like that. Just like a, you know, I pay more at a nicer restaurant that I want to have a different flair. Like, if I want to have, you know, an elk steak, [then] I'm going to pay a little bit more for it.

Stitzel: Well, and there's economies of scale, right…

King: Yeah.

Stitzel:…with Budweiser compared to. So, it's very interesting you brought up Pondaseta. I happened on the way, the way in today drive by their little van.

King: Yeah.

Stitzel: It's just, I mean it's like rainbow colored, you know. It's perfect because you couldn't not look at it. It stands out so well. So, we're on the topic of advertising. And I don't even know what they used the little van for. Maybe they just drive it around town so people can see it. Like.

King: Deliveries.

Stitzel: Billboards. But yeah. O.K. deliveries. That makes a lot of sense. But any comments about that particular --- it's almost like that I think a non-marketer would think that's almost, like, just a convenience thing. We have a van. We need to use it for deliveries. Let's slap the logo on the side.

King: So when we're thinking about how marketing is done. So, let's just even take it back to even more macro brand. So, what a brand is, is something that whenever I mention a word or a concept you instantly have a tie to that. So, if I say WT, [then] you're remembering back to your undergraduate days. You're thinking of your time as faculty. You remember football, baseball, [and] whatever ends up being. All those things are instantly into your brain. Just like if I were to say Converse, or if I were to say Rogue, or whatever it winds up being --- that's what brand is to us. And let's just say I had a --- I was at a powerlifting meet and they were using Rogue plates, and I saw one of the plates break. Even if I don't really pay much attention to it, that's always in the back of my mind. So, you're looking at buying plates. You're like: oh Rogue, I'm not going to buy that. I remember seeing this one thing. And so, all these things are brand components that we have. And so, if we can increase touchpoints of even something like: that's a cool looking van or something like that. That's way better than just a white van doing deliveries to Toot’n Totum or whatever with their beers. And so, we like to increase our touchpoints. But that's that [it] can be a gift and a curse. An example I always use in class is --- I won't use the brand because it's got a negative effect towards it now --- but I was driving down the highway, [and] a person aggressively cut me off, and aggressively braked, and everything else. And the first thing I saw was a sticker for a company in the corner. And so, immediately I make that association. Well, if that person would buy that brand, [then] that brand is garbage. And so, it's unfortunate but that's always gonna be in the back of my mind. And I'm fairly rational about that. And so, you always have to remember that if you have to watch out who's using your brand.

Stitzel: My reflex was to bring up rationality. So, you definitely anticipated that.

King: [Laughs]

Stitzel: But there is a sort of weird way where that may not always be --- I think maybe your example, you know, we might recognize some irrationality there but that may not always be --- irrational, right? Like, there's a certain type of person that's associated with a certain style, or product, or something --- there is sort of information contained in those choices, right?

King: Oh yeah. I mean, if you're if your favorite powerlifter wears this shoe, and your least favorite powerlifter wears another shoe, [then] you're not going to wear the other shoe. That's just the way it is. My favorite basketball player doesn't do this, or they're on their favorite team, or all that will dictate what my choices are.

Stitzel: So, I want to circle now to that data that you brought up, right? So, you said we take the data, and then that helps us make these marketing choices. And I think you were saying that in the context of even traditional…

King: Hmm mmm.

Stitzel:…marketing.

King: Yep. Hmm mmm.

Stitzel: And so, I was, sort of, saying to me targeted advertising goes hand in hand with the digital era. And you're saying it actually would surprise you how not true that is, or how maybe lightly that holds.

King: Yeah. Have you ever seen [the film] Glengarry Glen Ross (1992)?

Stitzel: Actually, yeah.

King: These are the new leads --- either the Glengarry leads. Those leads are from some sort of a data source that where we targeted these people are looking to purchase. They have the funds to purchase. Oh, that's exactly what we're talking about. And that was what in the 70s or 80s.

Stitzel: Yeah.

King: Whenever that movie was.

Stitzel: This is the coffees for closers always…

King: Yeah.

Stitzel:…be closing thing.

King: Yeah.

Stitzel: O.K. yeah that's it I don't even know that I can remember what the story was told. I just remember a couple of those scenes…

King: Yeah.

Stitzel: Where she's shouting at people.

King: [Laughs]

Stitzel: And just causing everybody to run in terror. So, that's kind of an interesting --- both management and marketing classes can use that as an example.

King: But you'd probably want to edit the video a bit.

Stitzel: Yeah maybe don't play that in class, right?

King: If I taught a sales course though, that would be the probably the first seven minutes of that class.

Stitzel: Is that right?

King: Because they break down several very high arching or overarching marketing concepts in passing --- just kind of like this conversation here now. If you're listening and you're a marketer, or economist, or whatever you're like: hey, they're only touching on the surface of this. That's the same way with that Glengarry thing. You could easily break down a lot of what they said, and really take deep dives into all that kind of stuff.

Stitzel: That's really a very philosophical point as to, you know, how would one approach their podcast or whatever media that you're using. And the reason that I do this --- and, you know, if people have been to the website, or some of the stuff that I'm doing early on in the podcast --- you know, I say finding applications of economic thought which is why I try to cast a fairly wide net. You know, economics and marketing --- what I told you when I first asked if you'd come on is, you know, the space between us is, like, behavioral economics, right?

King: Yep.

Stitzel: And that's probably overselling it. And I think there's a lot of traditional economics and traditional marketing that share common space. A lot of things that you're saying are probably gonna sound familiar to listeners that are that are fairly well read in economics. But I was talking to a colleague, and he said: it's surprising how quickly even like a basics of a field --- in this case we're talking about economics --- can get difficult to parse, right? So, you say: well, let's get into the real deep part of any one of these particular points. That's going to get beyond most people pretty quickly. So, I think that's the nice thing about this kind of setting, as opposed to like a classroom where, you know, you've got 32 times that you're going to be able to lecture.

King: Yep.

Stitzel: Let me have an actual dedicated class period where I talk for an hour…

King:…about the specific depth.

Stitzel: Exactly. And, you know, so that's where I think podcasts and classes --- they can have kind of their different roles and different uses. So, talk to us a little bit about how companies are collecting data, particularly these days.

King: Oh. It depends on how you want to look at it. I mean, everything's data, right? I mean, the thing about it is --- this is an older example, but I'm sure it has to hold --- in 2019 more data was collected than every other point in time. So, December 31, 2018, all the way to the beginning of recorded history --- more data was captured in 2019.

Stitzel: Wow.

King: And so, that's the everything is data every point you touch on is data. You'd be surprised what is captured in. If you --- just so, I put up a video last night from my class, and I took text from that because, you know, ensemble do a transcript of it. And I was like: oh crap, I'm not going to go through and like check this whole thing because I'm just tired, and I didn't want to do it. And so, I was like well hopefully there's not like a swearword or something, right? Because I'm texting and I mumble a bit. And so, I put it in this profanity checker online. It's all --- it is just a box that just checks text to look for swear words, right? And so, I plug it in there. Think about this --- that's captured. That data is collected. That data is sold to somebody, right? I don't know what it's for, but just be aware that everything that you do is most likely tracked in one way or another. We both have our cell phones with us that collects a ridiculous amount of data. If you ever want to feel kind of freaked out, [then] go look at what the apps have access to. And you're like: look at calculator, why does it need access to my text messages and things like that? It's crazy the level of data that we hand out.

Stitzel: And we only come into contact with when they're forced to ask us permission for it. And I have that same instinct. I forget what app it was. It was like AA Chess Tactics app that I had downloaded. And it's like, it wants access to my photos?

King: Yeah.

Stitzel: Like what? I can't I literally can't fathom a reason that something where it shows me a chess puzzle, and I try to solve it in 30 seconds --- what does that need with my photos? I don't know.

King: Yeah.

Stitzel: So, you know, it is really wild sometimes how broad (I guess is the word) that that kind of data capturing gets.

King: Well, and that's why if you ever have, like, a you're like: oh, this app’s really useful. I wonder how it's free. That's how it's free, because they capture this, and go: hey, all our users that have this chess app also have this bodybuilding app. And so, turns out a lot of bodybuilders in the last six months have started playing chess or something like that. And that's extremely useful data, right, because that's how you find different new markets.

Stitzel: So, this goes back to that building the network idea that you were talking about earlier?

King: Yes you could. It depends on what you're trying to do with your thing. If you're trying to sell a product that is, like --- I don't know how I should have picked a better thing to tie together --- chess piece shaped weights. There you go. Something like that.

Stitzel: If you're trying to get that corner.

King: Yeah. It was poor planning.

Stitzel: If you could take a long time to workout they want to solve chess puzzles between sets.

King: Maybe, yeah. There you go.

Stitzel: Which is definitely not an example of what I do.

King: But I mean --- something like that. That's how we can figure it out. So, we have a, you know, this chess/bodybuilding theme thing. Now we know about you. O.K., what other users look like you? And so, I'll even take it more macro to another thing. So, something that, kind of, freaked a lot of people out was they were realizing that Facebook was creating ghost people. And so, what I mean by ghost people is: let's just say like my parents don't have a Facebook, but there's enough connections that where there's, like, a mention. Or they see a photo of a person that's consistent --- my sisters and my pictures [and] things like that. They were putting together these things that were, like, pseudo-parent A [and] pseudo-parent B. They were creating even maps off of that.

Stitzel: That's how somebody who doesn't have a Facebook account can now, sort of, be mapped…

King: Hmm mmm.

Stitzel:…using the same kind of Facebook algorithms that you use for a user.

King: Yep.

Stitzel: That's actually really brilliant.

King: Oh, it is. I mean, the level of intelligence of these people is just shocking to me, right?

Stitzel: And of course, this is done incrementally, right? So they started with something and they realized they could capture this data, and then they could capture this data. And then somebody was looking at it and go: wait a minute, if I've got Robert and his sisters…

King: Yeah.

Stitzel:…[then] I can figure out something about their parents, right?

King: And who's this person over here? They show up and, like: oh, that's probably like an aunt or something. And then it refines it slowly. And then you can makeup a whole network of literally a fake person.

Stitzel: And that --- and the thing about that is even just having a sense of where that person might be/would be pretty useful. My dad would hate this. He's one of those: I won't have a Facebook account because I don't want the privacy violations. But little does he know…

King:…he's already got one.

Stitzel: Yeah, his kids are ruined.

King: Getting off the grid is impossible. And the other thing is I want to give one more example just because I found this one. So, I was taking a picture with a co-worker of ours the other day. And what we're doing is [that] we're putting stuff on the website. And, you know, those plaques that give information about professorships and things like that? Well, I got a Facebook (excuse me a Google photos) notification that said this is person X. And I was like, there's not a picture of --- oh, it's the person's reflection in the plaque!

Stitzel: Oh.

King: It was good enough that I have enough photos of this person over time, that they correctly identified…

Stitzel: Right.

King:…this person in a reflection on a plaque.

Stitzel: So, I'll tell you what's spooky about that is as I like the Google photos app for backing up and storing.

King: Yeah.

Stitzel: Because once you get a smartphone and you're like me --- you got small children and stuff --- I mean, I'm taking a thousand photos a month or something.

King: Yeah.

Stitzel: That's just unsustainable, right? And then it can figure out which kid is which over time.

King: Hmm mmm.

Stitzel: And think about how quickly children are changing, you know.

King: Yep.

Stitzel: If I showed you a picture of my current four-month-old back when he was, you know, four weeks old --- the game you play is: O.K., is this Titus or is this Addy?

King: Hmm mmm.

Stitzel: Which kid is this, you know?

King: Well, Google knows.

Stitzel: Yeah. Google knows perfectly, which is insane to me, right? So it's like, if Google can figure out who you or I are --- who's whose facial characteristics have been stable for over a decade --- like, that's one thing, right? But somebody who, like, is literally changing by the day that Google can go: hmm O.K., this must be the third child, you know.

King: So, have some fun with this. If you don't have Google photos of yourself from when you're younger --- if you just have your, like, ones that you've taken --- [then] scan some pictures and upload them and see how good it does. I'll be curious because I've done that before. Because my --- I have a family member who sends over group text photos that she finds. And so, she'll take pictures of them, [and] well I'll just save those photos. And they automatically save to my Google, and it has been shockingly accurate, and picking out me at different ages.

Stitzel: Which that's just wild to me. Literally last night, a friend sent me a picture that they had stumbled across and said: hey, do you remember when this was from? And actually, did remember what. But, you know, I'm looking at it going: that wasn't/that was maybe 10 years ago tops. And I just don't look like the same person at all --- you know, facial structure, body weight, and hair. Everything's different, right?

King: Yeah.

Stitzel: And Google probably wouldn't have any problem with that.

King: Yeah. Because every time you get --- so, if you give it a couple photos it's good. If you get a couple trillion photos, it's almost unbeatable, right? And so, that's why you see those, like, Snapchat filters and things like that. And they're always put the reason why we're doing --- that's for data, right? That it's to better their algorithm to figure out like a face swap. Well, what is an actual face, right? Why is it not pick up, like, that light switch that has two dots and then a little weird scratch on it or whatever? Well because, it's had a trillion inputs or, you know, whatever it would be --- however many inputs they get. And it's getting better and better.

Stitzel: Do you remember this app from a while ago that was like how old are you going to look in 20 years?

King: Yeah.

Stitzel: Or something like that?

King: Yeah. And it was owned by some nefarious company.

Stitzel: I think it's Russia, right?

King: Yeah.

Stitzel: So they're trying to get data on people's faces. And everybody was, sort of, spooked and stopped using it after that. or maybe it's just a fad that was bound to die anyways.

King: Well, I mean but, it doesn't matter. I mean, because then you just have another company. You give a fun little moustache, or a Trump hair, or Bernie’s mittens, or whatever it winds up being. And people will self-select into giving you information.

Stitzel: Yeah, where's the Bernie mittens app? That's got to be coming because that meme is everywhere right now.

King: Yeah. I mean, but it'll last for like two or three days. Some company is going to collect all that. And they're going to go: all right, all the users that put on the Bernie filter were in these specific areas. Then you start putting that together with, like, these are the Trump hair people or whatever. You can start seeing how these patterns, all of a sudden, they seem silly until you realize where they overlay. And so, then you can see how powerful they get.

Stitzel: So, the reason the polls didn't do so well on the presidential race in 2016 is they're still refining the Snapchat filter.

King: the dankness of the memes [Laughs]. All polls in the future will be dank memes

Stitzel: They're gonna deduce who's winning just by Snapchat filters in the future. That's amazing.

King: I mean but, it seems silly and trivial. But think about how --- let's take one step back to whenever, I believe whenever, you and were kids. How many different channels were there? There's like four, right? I mean, five if you have a good antenna or something like that. And so, you could almost select, like, which 20% of this did you watch? Oh, we're a CBS family. We watch show X. Oh, we're an NBC show. We watched Y, or whatever winds up being. Now we have to get so refined, because you can have, like, I'm only into hockey and anime or something like that. You can have these very disparate things that may not matchup. But now we can actually track it better too, right? So, it's pretty wild. So, we can get a fine point on with people's preferences and what they do.

Stitzel: Did you pick hockey and anime out of thin air? Or is that a known?

King: I just made that one up.

Stitzel: O.K.

King: I was gonna try to pack myself into the chess/powerlifting corner.

Stitzel: The reason I ask is --- I/this could be totally random noise, but --- I teach sports economics.

King: Hmm mmm.

Stitzel: And so, one of the things I do is figure out O.K., what kind of examples are going to be interesting to people? More than one person, in more than one class, has volunteered that their favorite sport is hockey. Even the other thing they're interested in anime, so.

King: So that's information that was beamed directly in my brain.

Stitzel: Yeah, apparently.

King: [Laughs]

Stitzel: So, something about my class got recorded and sent to the dark net there and you picked it up. So, what kind of companies are doing this, right? Because we've covered a lot of ground now. So, when I say something like that, we think of the, like, G-Mafia, right?

King: Hmm mmm.

Stitzel: The Google, Microsoft…

King: Facebook, Amazon…

Stitzel: Apple. Yeah, Facebook, Amazon, and IBM, right? So, that's what we're thinking when we're thinking data collectors. But now you've, sort of, made --- I honestly don't know who owned Snapchat, so that would be probably one of those. But now we've, sort of, talked about some groups that would be outside of that little [group].

King: Everybody's collecting data. I mean, we/if this is on anything that has a website is tracking data. Everything. Whenever you sign up for a class here, we're collecting data. Now it could be useful or non-useful. But even the smallest mom and pop shop that happens to have a square --- that's data collection. A lot of them are easier with finances, you know, --- terminals and things like that ---- just because that's the easiest place to connect stuff together, right? So even if I have just, like, a first letter and a last name, [then] I can usually go: all right, so there's R. King that purchases from this coffeeshop. And then we have a Robert K. who purchases from this mitten shop. And they're both in Canyon --- probably can be the same person based on the behavior or whatever it winds up being. And so, all these things are collecting information constantly.

Stitzel: So is it better or worse for my personal privacy to be named Joe Smith versus Brandli Stitzel --- the most, like,

King: Hmm mmm.

Stitzel:…ridiculous name of all time?

King: The thing is --- it's getting so good, it doesn't really matter, right?

Stitzel: O.K.

King: I mean, you can be named a bunch of random characters, and it's still going to have an even a ghost avatar of you. It'll figure it out.

Stitzel: They'll back it all out then. So, one of the things in preparation for this podcast that I came across was some research where they, sort of, randomly assigned people search engine experience to, sort of, have (more or less) targeted advertising.

King: Hmm mmm.

Stitzel: And what they found was people seem to like the targeted advertising. So, one of the things I think in the background of this conversation --- and we've talked about privacy a little bit --- is this idea that: like hey, this is like information about me.

King: Hmm mmm.

Stitzel: Why does Google get to have it? Or apparently anybody gets to have it?

King: [Sighs]

Stitzel: Because everything that I'm buying.

King: You've opted into it already.

Stitzel: I've opted into it. Yeah. I mean, in some way you've done it volitionally, right? I mean, but like you said --- there's also no avoiding it so…

King: Yeah.

Stitzel:…maybe not. But talk to us a little bit about this idea that consumers actually seem to like this. Like, wouldn't I rather have an advertisement for, you know, a hobby that I just picked up --- my bodybuilding/chess career?

King: Hmm mmm.

Stitzel: That's what I would like to be in the sidebar on Facebook advertising to me, rather than hockey/anime which isn't my thing.

King: Oh. Definitely. I mean, that's the thing about it is ---- it's always back to nefarious actors, right? Imagine a world in which you actually fully trusted this entity ---- whatever this entity winds up being. We'll just call it a world government for ease. We're all connected. We're all under this one world government. If we trusted that they had our best interest at heart, there'd be no end to the amount of data you'd want to give them. Because we could start being predictive of like: oh, this person in this particular region had a cough. They visited this one random store, and that's where this person, and blah blah. And they could piece it together, and you could have this incredible network of predictive capabilities. Comma. But who's going to go ahead and trust a single entity to have all that information? And it’s just --- it seems far-fetched because it really is, right? But if we had something that we could trust, and we could give it all our data, [then] that'd be awesome. And so, I think that we would want something like that, because how great is it when you find a podcast that you like? Or a show that you just stumble [on] your YouTube channel like: oh, this is exactly what I want. That's brilliant! At what cost though?

Stitzel: So, this is one of the topics that has been at the heart of economics for along time, you know, is: how is society ordered? And economists have argued --- and, you know, back when this is happening, this is [at] the height of communism, and Marxism, and the evils that come out of that. And so, economics, sort of, has this long tradition. And even now we still like to talk about it and saying [that] society is emergent --- which is to say it's made of human actions, but it's not made of human design --- because nobody can pull all those strings.

King: Hmm mmm.

Stitzel: Right? But it's still very much made up of all the individual decisions that I'm making, that you make, [and] that everyone makes, right? So, I'd be remiss if I didn't take an opportunity on Econ Podcast to mention, sort of, briefly this idea that data needed to actually run an economy --- and I would argue actually also society --- can't actually be conveyed into these kinds of things. But it is very interesting to see where that kind of stuff is going. And you mentioned some very practical applications, you know, [that] containing a pandemic might be really nice…

King: Oh yeah.

Stitzel:…in certain scenarios.

King: But like you said people can fault China all they would like to on some things. But as far as tracking and everything with WeChat and things like that --- that is one way to prevent the further spread of the thing. You know, begin at what cost though.

Stitzel: Yeah.

King: Do I want to give up my interpersonal freedoms for that? It starts getting into a weird world.

Stitzel: And that's really important. I don't want to get derailed too much here…

King: [Laughs].

Stitzel:…into these kinds of things, because we have a couple of interesting things I want to touch on here with the time that we have left. You know, but one of the things I teach my students in a principles micro class in particular (and I'm starting to teach it in all my classes and) [that] when it comes to policy, there's no solutions there's just trade-offs.

King: Yeah.

Stitzel: Right? And so, on one hand, there's some, I think, some very some serious truth to what you're saying, right? Like, you can track people and find, and then we can forcibly quarantine people. And then the trade-off is you have some, maybe…

King: Human rights abuses.

Stitzel: Yeah, some human rights abuses thrown in there --- which we don't want to make light of.

King: Just sprinkled in.

Stitzel: Yeah. So, let's --- I think that's actually a really nice jumping point into what I want to talk about next. And kind of the impetus that that you brought up, when we were kicking around what we might talk about in the podcast, is this idea of Google and Apple getting into health monitoring.

King: Yeah.

Stitzel: So set us up a little bit with what's been fairly recent news, right, in terms of…

King:…with the Fitbit.

Stitzel: Yes.

King: So, Apple's been trying to do this for a while ---- trying to create some sort of a health tracker, or something that you can monitor more than just heart rates and things like that. And so, we'll put them in two different buckets just for ease. You have Apple who's wanting to, kind of, create this, you know, utopia. We'll just go with that for ease. And then you have the Google side, and they just bought Fitbit. And so, Fitbit also is a tracker for this, but there's going to be a lot of money to be made in something like this. And so, I'll give you the nefarious side, [and] then I'll give you the good side, because I think that the good side's actually better. So, I'm an insurance company. And one of the things that we have to deal with is asymmetric information, right? And so, how do I price your insurance versus my insurance? Well, I monitor. Let's just say I have full data. I monitor your heart rate. I monitor your food intake because it has these other benefits. I monitor that you work out more than I do. Blah blah blah. Now all of a sudden, we can get a pretty good dollar amount for what you should be paying [and] what I should be paying. And so, is that fair? Probably. But at the same time, it's pretty eerie to think about something in that way. But now we'll jump over to the opposite side of: let's just do it as this is a really good thing. Now they're monitoring our health, and they all the sudden see they both see us going through similar stressors or something like that. And they realize that our heart rates are increasing, but they find out: oh no wait. There's actually like a gas leak in the school or something like that. That would be extremely useful, because now we are both benefiting from the knowledge of larger aggregated data. There's a --- it's going to fall in between those two but having that level of biometric data is going to be insane. I'll take it one more step just for fun. One of the articles that we sent over to you as mentioning, like, you can almost watch in real time how much I enjoy a show on Netflix or something like that. So, imagine both of us have our trackers on. Both of us are watching a Netflix show, and at one part my heart rate goes up and yours doesn't. It knows that I probably have a different affect than you do for the hockey playing anime characters, right? And so, that's again more levels of data.

Stitzel: So I'm trying to think of, like, a video [or] a movie that I've had like a really visceral reaction to. What's this? There's a movie with Gerard Butler, and it's?

King: Law Abiding Citizen (2009).

Stitzel: Law Abiding Citizen. Right. And like, that first sequence where they kill his family is just heart-wrenching as can be. And it sets you up for later watching the rest of that movie, like, knowing that this guy's doing terrible things that you don't agree with. And yet, you're completely 100% on his side. And if we told that story in real life --- it's just a story that I recounted to you --- you'd be like: that guy is, kind of, a psycho. Like, that's not good. But because they set it up with that first sequence that is just so heart-wrenching, it sets you up for that. And I'm trying to think.

Stitzel: I tried to get into --- is it called Blacklist?

King: Black Mirror (2011-2019)?

Stitzel: Well, it's an earlier show. But the opening sequence --- there's like a female FBI agent or something like this, and her husband gets killed, right? And whatever happened, like, shortly after that --- I never, like, got into that.

King: Didn't land?

Stitzel: Didn’t land for me. So, I never watched that show. So, I'm imagining that the, like, Fitbit --- of course I'm an Apple guy, so I have the Apple watch. So, I'll go with…

King:…the other side there?

Stitzel:…the other side there. Yeah, for the utopian side that you're saying.

King: [Laughs]

Stitzel: You know, they're gonna now produce shows that are gonna, like, fit those spikes better...

King: Yeah.

Stitzel:…and probably market them because somebody's out there watching The Blacklist (2013-present). I swear that's the name of it, but I'm sure I'll look it up after this and be wrong.

King: [Laughs]

Stitzel: And that's for somebody else.

King: Hmm mmm.

Stitzel: I don't --- I'm not saying that's a bad show. It just didn't grab me.

King: So, I'll tell you another fun little one that's made news a couple times. It was a Vox article and some other stuff like that. Our Netflix login pages or whatever --- even if we have similar tastes --- yours is going to look differently than mine. And so, what they do is they do --- it's called a AB testing. So, they show A versus B, and which gets clicked on more. And so, if you go look at like Law Abiding Citizen (2009) --- my cover art is going to be a different thumbnail than your cover art, most likely. So, let's just say that I watch a lot of rom-coms, and I watch a lot of, like, Christmas movies and stuff like that, and it'll have a different clip. Then it'll be something like what you have. And so, my clip maybe or my thumbnail maybe, like, you know, (I'm trying) --- if there's a strong female character in that movie, but something like that would be my thumbnail. But you watch a lot of, like, burly shows --- guys fighting one another. Whatever. Then you see Gerard Butler with, like, a hammer or whatever it winds up being. Our thumbnails are going to be different, because they're trying to get us to click on this. And so, for the most part if you got 10 people in a room and looked at their Netflix's --- all those thumbnails are going to be completely different than one another.

Stitzel: Is that right?

King: Yeah.

Stitzel: And that never occurred to me, but it rings true for this reason. When I go to pick Netflix shows, O.K. I do it so much by title. And I mean, I'm flipping through the Netflix recommendations…

King: Hmm mmm.

Stitzel:…as fast as the little controller will go, right? And then if it catches my interest, then I'll stop and I'll see what little clip plays. And I'll see what the little description is, and that is, you know, maybe that's a endogenous thing, right? They've trained me to do that. Like I, in the past --- I wouldn't have done that. I would’ve been more methodical or something. But now I've just implicitly discovered that that's how I can shop for movies on Netflix. And it is very interesting. And, you know, they have the different accounts. So [I would] be very curious [to], sort of, to see what my wife's account [looks like], whose favorite Netflix show is, like, The Great British Baking Show (2010-present), right?

King: Hmm mmm.

Stitzel: And then, you know, all my Netflix consumption is, like, documentaries about chess and then Kung Fu, right? So…

King: So, pick a show that you both like --- whatever that winds up being. And just at your leisure, [then] go look and see what the thumbnails are.

Stitzel: I'm gonna do that. That's gonna be exciting. So, how do you view that, right? You've brought up this idea of a nefarious actor. How do you view that manipulation of the targeted advertising, based on the heart rate? Like, to me --- because I think I still have agency --- that strikes me as, like, a good thing. Like, they're going to take this information. They're going to be, you know, when there's this sequence, and here's the story that these kind of people like, and then we're going to like combine things up. What? Let's take this as an example, because this would be something that's really interesting to me [is] that there's two things that flow out. I've noticed with your, like, Netflix special movies, right, [that] early on in the sequence, there's always a sex scene and there's always explicit nudity, right? And some of them have a little thing where you can, like, skip it.

King: Hmm mmm.

Stitzel: Right, which to me --- just, like, the idea that we can now customize movies into two different groups [is great]. So, if I'm sitting there with my kids --- I'm, like, skip, right?

King: Now imagine if they have it to where if your heart rate escalates in a different way for something else, [then] they know that your kids are or are not present.

Stitzel: Right.

King: You can extend or reduce the sex scene.

Stitzel: Yeah. So, you see what I'm saying.

King: So you can change up the whole entire show.

Stitzel: It's, like, a choose your own adventure based on just --- I’m gonna be like: all right babe, we're gonna watch this movie. Put your Apple watches on.

King: Yeah.

Stitzel: You know?

King: Well, it could be. I mean, we're getting to a level where we can customize things. Think of --- so this is called mass customization and what we do. And so, like, this is why you have shoes. You can pick, you know. I want blue tops and purple lowers or whatever. You can make it customizable. We're going to be able to do it. And that's super easy in a digital space because I can almost make an avatar instantly to the thing that you like. And so, I really do see a world where if we want to have a, you know, different characters or different makeups or whatever, [then] you can very easily do that. All it is, is just a different type of render. And so, we know that because you like hockey anime. We can almost generate that movie for you. This is where AI gets to be really cool, and how it can correctly predict what I want to see, right? And so, if I'm listening to music and my heart rate stands smooth, [then] it may just keep the music going. It may just keep playing. You know, instead of having three bridges --- that makes it four or five or whatever --- if I'm, kind of, getting out of it [to] end the song early or something like that. It's giving me exactly what I want. So, back to your word manipulation. I don't know if it's necessarily manipulating, but it is doing, kind of, what I'm looking for. That's kind of what I want. It's giving me the right flavor, at the right time, for what I'm looking for. Now is that good? I don't have an answer for that.

Stitzel: O.K. so I'm glad that you framed it that way because it brings me to a point that, like, I didn't intend to make; but just some of the reading that I've been doing. So, there's economist named James Buchanan --- a very famous economist [whose] done a lot of great work, and a lot of cost and choice theory. But he has a book that you, I think, is called Natural and Artifactual Man. It's not artificial but artifactual.

King: Hmm mmm.

Stitzel: And his idea there is that the thing about humans is: it's not just that we are something, it's also that we can aspire to be something.

King: Hmm mmm.

Stitzel: Right? So, to since we're sneaking up on an hour here --- and I appreciate the time that you've taken --- talk to me a little bit [and] to the listeners a little bit who are struggling with: O.K., I can kind of see the benefit of, like, maybe tailor-made movies that remove or add things I do or don't like. With this also idea that sometimes I'm sucked into my phone in a way that I don't want to be. And the fact that I can scroll Instagram forever, like, may not be a good thing for who I aspire to be.

King: So, a lot just as a really quick thing to add the manipulation bit. So, there's a really good book about how phones are designed and things like that, and the choice of the red notification and the infinite scroll and things like that. A lot of that's based on gambling, because that's how you take away people's perception of time. Is like a slot machine --- is the literal perfect machine for human manipulation. Everything about it's great. But that's a completely other topic for another time. But when you're talking about --- let me take it a step back to, like, a bite of food. That way it's a simple cross-sectional point in time. Have you ever been eating, and they're like: oh, if it just had a little more spice, or oh there's just too much salt or whatever? Let's just say that every time you took a bite, I was able to tap directly into your parts your brain. And every single bite was the literal epitome of the greatest bite you could ever have. Is that a good or bad thing? [Mind tapping is forbidden per Deuteronomy 18. It is eating of the fruit of The Tree of Knowledge of Good and Evil]. I mean, there's an argument that's that sounds like the greatest thing I've ever heard. But at the same time, at what point is that just brain hacking me too much to where I might as well not even have, you know, autonomy, right? The reason we have such high highs, is because we have such low lows. If the prior bite would have been so gross, [then] that second bite would have been so good. So, if we're always at a hundred is that good?

Stitzel: My guest today has been Robert King. Robert, thanks for joining us on the EconBuff.

King: Yeah. Thank you for having me.

Stitzel: Thank you for listening to this episode of the EconBuff. You can find all previous episodes on YouTube at EconBuff Podcast. You can check out our website at www.econbuffpodcast.wixsite.com you can contact us at econbuffpodcast@yahoo.com.