How findings from psychology can be applied to advertising

March 2017 | Richard Shotton

The theme this month will be how findings from psychology can be applied to advertising. It’s a crucial topic as psychology provides an understanding of why people make the decisions they do.

Pretty relevant to advertising you’d think.

As Rory Sutherland puts it “this subject provides a robust, intellectual link between understanding human nature and knowing how to make money.”

The theories are certainly robust. They’re based on peer reviewed evidence from leading scientists across the world. That makes a change from many of our industry beliefs, which often stem more from what we wish was true, than what actually is.

Fittingly, there’s no single, grand theory underpinning psychology. Instead, there’s a broad collection of biases. This has two benefits. First, it means that whatever brief you’re tackling there’s likely to be a relevant bias you can harness. Second, it avoids the danger of making our tasks fit the solutions we have to hand, rather than the other way round.

Over the next four weeks I’ll be covering a range of topics.

Week 1
12 Brilliant Behavioural Science Books
Week 2
3 underused biases that affect creative messaging, channel selection, media implementation
Week 3
The truth behind claim data
Week 4
Price relativity, costly signalling, pratfall effect, anchoring, social proof, left hand digit effect, selective attention
Show More

Click on the arrow to hear more from Richard and what he will be covering this month

 

12 Brilliant Behavioural Science Books

9 March 2017

 

This week I’ve shared what I think are some of the best books, blogs and events on the topic. In the following weeks I’ll discuss some broad themes such as why observed data trumps claimed data and why we should give as much weight to target moments as target audiences. I’ll also discuss some of the lesser known biases, as I think too much coverage is given to a small subset of biases, such as social proof and framing.

Finally, I’ll look at the ethics and effectiveness of nudging as there seems to be a backlash to the topic.

12 Brilliant Behavioural Science Books
Influence

This is one of the classics of social psychology. The first edition was written in 1984 by Robert Cialdini, Professor of Psychology at Arizona State University, it outlines six biases that shape human behaviour, namely: reciprocity, commitment, social proof, authority, liking and scarcity.

Tim Harford’s blog

Tim Harford is the economist behind the book and FT column, The Undercover Economist, and the Radio 4 statistics show More or Less. Tim’s earlier books and blogs tend to focus on economics but his more recent ones tend to blend economics and psychology. http://timharford.com/ 

Events

If you’re in London there is a huge range of speaking events that are either free or minimal cost.

(As an aside the danger is as these events are free we devalue them… Just as happens here with Joshua Bell, the world famous violinist.)

Although the topics at the first three places below cover a wide range of subjects, behavioural science or psychology speakers are regulars.

Upcoming Events at RSA

How to: Academy (courses)

Behavioural Boozenomics is a monthly meeting held on the second Monday of each month in the Comedy Pub near Leicester Square dedicated to behavioural science. Check out the speakers here

Finally, on the morning of March 24th, WARC will be hosting a free morning seminar on behavioural science and advertising. I’ll be speaking alongside Mark Earls, author of HERD, Seamus O'Farrell, Colin Strong and Crawford Hollingworth.

 

3 underused biases that affect creative messaging, channel selection, media implementation

16 March 2017

 

One of the appealing aspects of behavioural science is that rather than being a single, over-arching theory, it’s a broad collection of biases. That means it’s flexible enough to be applied to the variety of problems we’re trying to solve for brands.

Despite this, the commentary in advertising has been about the same handful of biases: social proof, loss aversion, framing and the like.

With that in mind I wanted to discuss briefly three underused biases. I’ve chosen a range that reflects the different facets of the APG. One affects creative messaging, another channel selection and the final one media implementation.

Pratfall Effect

A bias that should be considered more often is the pratfall effect. This is the idea that admitting a weakness makes a person, or a brand, more appealing. Elliot Aronson, from the University of California, was the first academic to investigate this.

 

He recorded an actor answering a series of quiz questions. In one strand of the experiment, the actor – armed with the right responses – competently answers 92% of the questions correctly. After the quiz, the actor then pretended to spill a cup of coffee over themselves (a small blunder, or pratfall).

 

The recording was played to a large sample of students, who were then asked how likeable the contestant was. However, Aronson split the students into cells and played them different versions: one with the spillage included and one without. The students found the clumsy contestant more likeable.

The implications for marketing

 

So why do imperfections make people and products more attractive?

 

Everyone assumes that brands are fallible, so if a brand is open about its failings, it can persuade consumers that its weaknesses lie in inconsequential areas. This theory partly explains the success of budget airlines. At launch they openly admitted that the trade-off for cheap prices was a compromised service: no reservations and a small luggage allowance. If they hadn’t admitted as much, consumers may have assumed the cost-cutting had come at the expense of safety.

 

Admitting a weakness is also a tangible demonstration of honesty and, therefore, makes other claims more believable. Three of the most successful ad campaigns ever: “Good things come to those who wait” (Guinness), “Reassuringly expensive” (Stella Artois) and “Naughty but nice” (Lyons cream cakes) all made their core claim more believable by admitting a weakness. Sure, these cream cakes are full of sugar and won’t be good for your figure, but they’re worth it because they taste so good.

 

The principal-agent problem

 

If admitting flaws is an impactful tactic, why do few brands apply it?

 

The rarity is explained by the principal-agent problem: what is in the interest of the brand – the principal – is not in the interest of the marketing manager, the agent. If the campaign flops it might be the end of the brand manager’s career. Imagine explaining to the CEO as sales dive that the key message of your campaign was that the brand was expensive. Even referencing Aronson might not save you.

 

For safe career progression then, this tactic is questionable. However, if you want the best chance of growing your brand, consider revelling in your flaws. It will always be a distinctive approach.

 

For a different take on the pratfall effect – here’s Rory Sutherland:

Overcoming confirmation bias

 

Confirmation bias is the idea that we interpret information through a lens of our feelings for the communicator. This makes it hard to change peoples’ minds. As the legendary stock market investor, Charlie Munger says:

 

"The human mind is a lot like the human egg, in that the human egg has a shut-off device. One sperm gets in, and it shuts down so that the next one can't get in. The human mind has a big tendency of the same sort."

 

That’s a problem for brands trying to convert rejecters. However, research by Leon Festinger, a social psychologist at Stanford University, shows that there are moments when it is easier to overcome confirmation bias.

 

He ran a study with Nathan Macoby, from Harvard University, in which members of a college fraternity were played a recorded argument about the evils of fraternities in an attempt to turn them against the tradition. The students were split into two groups and either listened to the recording with no distractions or whilst being played an entertaining silent film.

 

Interestingly, students were more likely to shift their views when they were partially distracted. Festinger's hypothesis was that the mind is normally adept at coming up with counter-arguments to any persuasive communications. However, distraction reduces the mind's ability to generate these counter-arguments.

 

These findings are interesting as they suggest a counter-intuitive approach for targeting rejecters. Rather than seeking out high-attention environments brands should prioritise moments when the audience is slightly distracted.

 

It seems that one of the most cherished beliefs of media planners, that attention is key, may not be right in all circumstances.

For another angle on this topic read Seducing the Subconscious. Robert Heath’s book outlines how advertisers can avoid activating the brain’s capacity for confirmation bias by not engaging it in logical arguments.

Alternatively, there’s an argument that if it’s so hard to win over rejecters then ignore them and focus elsewhere.

Social proof and TV programme selection

Most people assume that the funniness of an ad is determined solely by the content, but psychologists Yong Zhang and George Zinkan have shown that the social context is important too.

The two University of Houston psychologists recruited 216 people to watch soft drink commercials, either on their own or in groups. They found that ads watched in company were rated as 20% funnier than those viewed alone.

 

The impact of large groups might be due to social proof – this is the idea that people are consciously, or subconsciously, influenced by what others are doing around them. So one person in the group laughing encourages others to laugh.

 

So what can brands learn from the social nature of humour? The main point is that the funniness of an ad is not just a creative issue but also one of media placement. Picking the right moment can increase the impact. One implementational tactic is therefore to run copy in programs or genres which tend to be watched in groups. For example, films, documentaries and news are all around twice as likely to be watched in groups according to Infosys data.

These are just three underused biases. There are plenty of others such as signalling, the Von Restorff effect or moral licensing. Please let me know via twitter (@rshotton) what biases you think could be more used in advertising.

Last week I listed a few great events but, somehow, I forgot to mention the highlight of the year – Nudgestock. A day of Behavioural Science on the South Coast on June 9th organised by Rory Sutherland and Ogilvy Change. Get your ticket here

 

23 March 2017

David Ogilvy famously said, “The trouble with market research is that people don't think how they feel, they don't say what they think and they don't do what they say.” This scepticism towards claimed data is shared by most social psychologists.

The difference between claims and the truth is starkly revealed on dating sites. Look at the graph below from OK Cupid! which shows the distributions of heights of its users. The fact it mirrors the US population, but shifted two inches to the right, suggests that people stretch the truth.

Male Height Distribution on OKCupid

More categorical proof that consumers sometimes lie comes from The National Survey of Sexual Attitudes and Lifestyle (NATSAL), conducted by UCL and the London School of Hygiene and Tropical Medicine. In 2010 the 15,000 strong survey found that British heterosexual women admit to a mean of eight sexual partners, compared to twelve for men. The difference is logically impossible. 

NATSAL

Source: University College London and the London School of Hygiene and Tropical Medicine

All of this goes to show that advertisers trying to understand their customers have a problem: if they listen uncritically to consumers, they’ll be misled.

Contending with confabulation

It’s not just lying that makes claimed data problematic. Sometimes consumers try to be honest but they simply don’t know their motivations.

This can be seen in multiple studies – such as this one run by Adrian North, a psychologist at the University of Leicester. He ran an experiment in the wine aisle of a supermarket that found that background music was the main determinant of the nationality of wine bought by punters.  However, when questioned, hardly anyone attributed their behaviour to such an incidental detail. Have a read about it here…

In this experiment consumers tried to answer honestly, but they didn’t have full introspective insight into their motivations. As the New York University psychologist Jonathan Haidt says, the conscious brain thinks it is the oval office but in reality it is the press office.

The situation is particularly misleading as consumers don’t just pluck claims at random, instead they tend to present an overly logical post-rationalisation of events. Rory Sutherland elaborates here.

So if listening to consumers can be misleading what should you do?

First, don’t take responses at face value. Even though the NATSAL respondents are lying their answers are illuminating. They reveal gender expectations about sex: men tend to exaggerate their promiscuity, while women downplay it. The changing ratio between men and women tells a tale too. In 1990 men claimed to have two and a half times more sexual partners than women, by 2010 the gap had dropped to 50%. Gender expectations are levelling out.

Data are not transparent. They need to be teased, analysed and probed. Interpreting them naively will mislead you. But if you dig further, then insights can be uncovered.

Second, adapt your surveys so that you don’t always ask consumers directly. Instead have a cell approach, in which you randomly allocate participants into a cell. Each cell should ask the question in a slightly different way. By comparing the results you can isolate which incidental details are important.

Here’s a simple survey I ran with the brilliant researcher Jenny Riddell that used a cell approach to understand how our sense of value depends on the time-scale over which it is communicated.

Third, don’t just rely on surveys. Create simple field experiments that test the discrepancy between fact and claim as the basis of your experiment. Here’s an experiment I ran with the excellent Claire Linford that did just that.

This test revealed that consumers’ memories of the prices they paid for items are shaped by the means of payment. This gives brands a strong reason to roll out contactless technology.

Interestingly, if you ever want to question people on the street the best thing is to offer them a £1 scratch card in return. Far more effective than offering them a quid.

Fourth, look to sources other than claimed data. Search data is one such place. Have a look at this site.

All you do is drop a term into the search bar and it will return the most popular search strings that have that term and a question word (e.g. who, what, how, why). By including a question word it strips all the noise out and instead you get a great sense of what people really think about your category.

So to finish, two book recommendations.

 

First Dataclysm – by the founder of OK Cupid - one of the best books on how using observed data can give you an understanding of consumers.

And second, perhaps the best books on the topic of lies is Born Liars by Ian Leslie.

You can see him talking about this book at the RSA here.

I’d love to hear your thoughts on how planners can gain insights when claimed data is dangerous. Contact me on twitter- my handle is @rshotton

Dataclysm
Born Liars
 

Price relativity, costly signalling, pratfall effect, anchoring, social proof, left hand digit effect, selective attention

31 March 2017

Over the last three weeks I’ve written about how findings from psychology – or behavioural economics as planners refer to it these days - can help improve advertising. To finish I’ll address criticisms of the discipline. Rather than attack a straw man I’ll respond to this impassioned article by Lazar Dzamic, former head of brand planning at Google ZOO, which appeared recently.

Have a read…

The blog post makes two broad criticisms of behavioural economics. First, it’s so powerful that it’s unethical and, second, it’s ineffective. Surely, the initial response is to wonder how something can both be simultaneously effective and ineffective? This is advertising, not Schrödinger’s cat.

But putting aside that illogicality let’s take each point in turn.

First, that nudging is too powerful, or in Dzamic’s words:

If (behavioural economics) is as powerful as we claim – the thing that warrants all those departments, institutes and even whole agencies popping up all the time – then it should be regulated for commercial purposes… No gung-ho, free-market BE for selling financial services, cars or fast food, unless the deployers can prove they are beneficial, not detrimental, to consumers and the society at large.

Is ‘powerful’ even the right term? It suggests that nudges hypnotise a foolish public and beguile them into a particular course of action. While many advertisers crave such power, it’s unrealistic. Biases never sway everyone, all the time. They just increase the probability that communications have the desired effect.

If we accept that nudges don’t bamboozle consumers then what really is the complaint? That the communications are successful? Surely, if ads for a product are permitted, you can’t then object to them being effective?

“If we think it’s appropriate and acceptable for such communications to occur,” says David Halpern, CEO of the Nudge Unit, “it seems sensible to expect those designing or writing them to make them effective and easy to understand”.

And if it’s powerful communications that Dzamic objects to, why single out behavioural economics? Why not object to the great creative that has nothing to do with behavioural science: the John Lewis ads, the meerkat, or the 118 118 runners.

But to be fair to him, it’s not just the power he worries about; rather it’s the unregulated power. But this is a misnomer, behavioural ads are regulated. They’re regulated like every other piece of commercial communication. The Advertising Standards Authority insists all ads are: ‘legal, decent, honest and truthful’. They make no exceptions for behavioural ads.

Ah, but what about the lack of transparency?

Dzamic’s second objection is that behavioural economics lacks transparency:

The biases, collectively, contribute to the pervasive, default, irrational side of our nature so eloquently brought to light by Kahneman et all. It is exactly the side that we, the Mythocrats, try to exploit… If the cognitive biases are a sort of cognitive blindness, who wants to steal from the blind? 

If people are unaware that these biases are occurring, then is this malevolent manipulation?

Once again let’s unpick the exact argument. What does a lack of transparency mean? I think there are only two plausible complaints. First, consumers are fooled by only seeing a biased selection of information, rather than all of it. Second, consumers are being swayed by more than pure logic; that nudging appeals to our irrational side.

The first point, that many nudges show a limited selection of options, is true. But all communication is selective. Imagine if you were given every piece of information about a product; the complexity would have been bewildering. Once you start selecting information it can’t be neutral.

As Rory Sutherland says:

The process is inevitable. Criticising nudging is like criticising electromagnetism or gravity – the best we can do is be aware of the forces at work, to understand them and to make people widely aware of them.

The second element of the transparency critique is that persuasive techniques other than cold logic are being deployed. That’s true, but, again, so what?

More than two thousand years ago Aristotle wrote down advice for those seeking to persuade. The Art of Rhetoric outlines three broad requirements for effective persuasion: logos, ethos and pathos.

Logos, or the application of reason and logic, is important but ineffective alone. It needs to be complemented by ethos, an appeal based on the character of the speaker, and pathos, an appeal to emotions. Facts fall flat if delivered dryly.

That an audience is moved by emotional pleas doesn’t make them ‘blind’, it makes them human.

If nudging, like rhetoric, is merely a tool then what matters, is to what ends you harness it. Are you selling snake-oil? Or are you selling something of substance? If it’s the former then no defence of the techniques you’re using justifies it. But if it’s the latter the surely you want to sell the product as effectively as possible and that means harnessing behavioural science.

That’s all well and good. But is behavioural economics effective?

The final attack Dzamic makes is on the effectiveness of behavioural economics. In his words:

The problem is that whenever we try to deploy key BE principles in advertising – outside of an odd CRM/behaviour change programme, or some environmental framing in experiential marketing – we struggle to show that it actually works; or, at least, better than what great creative leaders knew intuitively already.

The main criticism here is that there are few examples of behavioural science working in practice. So in response here are ten amazing example of brands applying biases in practice:

1. Price relativity – Nespresso (HT @damianburns)

Nespresso is a fantastic example of a brand dramatically increasing the amount consumers are prepared to pay for a product by shifting the competitive set. The price they charge would have been completely unacceptable if consumers had compared them to Nescafe. However, by selling in single cup servings they changed the comparison set to coffee shops. This simple decision by Nestle has been worth billions.

This extract from Wiki Man by Rory Sutherland describes Nespresso’s approach.

2. Price relativity - Jacob’s Mallows

On a similar note to Nespresso, Dave Trott sent me this example of Jacob’s Mallows. Once again the desirability of a product depends on the competitive set it’s compared to.

Have a read about it here

3. Costly signalling – pretty much any large sponsorship

Costly signalling is the idea that extravagant displays of ad spend persuades consumers that advertisers have a genuine faith in their product.​

Read about it here.

4. Pratfall effect – Avis, Stella Artois, Guinness, Cream Cakes, Hans Brinker

Elliott Aronson, a Harvard psychologist, ran a number of experiments that proved an imperfection made a person seem more appealing. Many brands have taken this to heart.

Read about it here

5. Anchoring – Alka Seltzer, diamond rings, products on sale (HT @snillockcirtap)

Anchoring is a form of priming, where exposure to a number serves as a reference point for subsequent decisions. This occurs whether that number is relevant or not.

One of the most famous examples is the campaign by De Beers to set an anchor for spending a month’s salary on an engagement ring (or two months in the US).  

 

Read about it here

Another example is Alka-Seltzer in the 1960s. Their sales were stagnant so they decided to encourage people to take two pills, not one. Without a solid rationale they couldn’t make that claim directly so they created a new norm through a famous jingle that emphasised two tablets being used: “plop, plop, fizz, fizz”.

Have a watch of the classic ad:

6. Westpac – make it easy (HT @_clairemca_)

A wonderful example of how reducing friction can boost the volumes of sales. Westpac in NZ were inspired by a Rory Sutherland TED talk to encourage “impulse saving”.

7. Veblen goods – Nurofen and Chivas Regal

Classical economics suggests that increasing price suppresses demand. However, there are notable exceptions. Sometimes a high price can increase sales as it effectively signals quality.

Nurofen is an interesting example – it’s the same chemical as ibuprofen, yet can sell for x7 as much.

8. Social proof – Guinness, Amazon

When consumers know that a product, or even a behaviour, is popular its appeal tends to increase. There are many famous examples of social proof being used powerfully. Think of Amazon, which tells you what other, similar, customers have bought, or the famous government campaign that encouraged people to pay their tax on time by reminding them what their neighbours did.

However, brands need to be careful not to inadvertently misuse this bias and dampen sales. Read about that possibility here

9. Left hand digit effect – any product selling for 99p

My favourite line in Mad Men comes from Roger Sterling, who is distinctly unimpressed when shown Bernbach’s new VW ads. He has a different definition of effective advertising. He says: "I'll tell you what brilliance is in advertising: 99c. Somebody thought of that."

It seems Sterling was onto something (about the 99c, not the Bernbach bashing) as plenty of research shows that consumers put too much emphasis on the left-hand digit in a price. This means they consider £4.99 significantly cheaper than £5.

Read more here

10. Selective attention - TFL

So far the examples have been about psychological biases indirectly inspiring campaigns. In the final example, TFL were much more direct. They used the set-up of an experiment by Chabris as their creative.

Watch the video and do the test yourself

And here’s the TFL for comparison

If you think I’ve missed out a great example send it to me and we can extend the list.

I hope you’ve enjoyed the last four weeks of posts. If you did then please follow me on twitter (@rshotton) for more snippets and keep an eye out for my book on how findings from psychology can be applied to advertising, coming out in October.

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