Perceptual coding is a technique used in digital audio and video compression that takes advantage of the way humans perceive sound and images. By focusing on the most important elements that our senses can detect, it reduces the amount of data needed to represent the original content without significantly affecting quality. This is particularly useful in formats like MP3 for audio and JPEG for images. In perceptual coding, less noticeable details are discarded, allowing for smaller file sizes. For example, in audio, frequencies that are inaudible to the human ear can be removed, while in video, less critical visual information can be simplified. This process helps in efficient storage and transmission of media.