Can behavioural science really make advertising more effective?

Last week I looked at claims that applying behavioural science is unethical. This week I wanted to investigate another criticism from the same article by Dzamic - that behavioural science isn't effective when used by advertisers...

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 (HT @davetrott)

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.

#agencyvoices

My book, The Choice Factory, on applying behavioural science to advertising is available here

For more posts on advertising follow me on twitter on @rshotton

A version of this article first appeared on the APG