Why bad memory is costing you money

How good is your memory?

In 1992, Coca Cola spent $33 million to sponsor the summer Olympics. With a global audience and plentiful ad breaks, it probably seemed like a no-brainer to slap Coke ads in every available space. With that kind of exposure, their sales were bound to skyrocket.

Except, they didn't. There was no significant increase in purchases of Coca Cola during the Olympic Games. A study conducted shortly afterwards found that only 12% of people could correctly identify Coke as the sponsor of the Olympics. Amusingly, 5% thought that it was actually Pepsi. Despite spending $33 million to advertise at one of the most watched events on the planet, Coke just didn't make an impression. So, what happened??

What Coke failed to appreciate was that the 1990s was the beginning of the age of information overload. There were new television channels. VCRs had made home entertainment popular. Rolling 24 hour news cycles bombarded people with updates. In the 80s, the average person was subject to 25 ads a day, including newspapers and billboards. By the 90s, that number had risen to 700. Today, that number is now estimated to be 6,000 to 10,000 ads every day.

Leela: Didn't you have ads in the 20th century?

Fry: Well sure, but not in our dreams. Only on TV and radio. And in magazines. And movies. And at ball games and on buses and milk cartons and t-shirts and written on the sky. But not in dreams. No siree!

While our communication technology has evolved rapidly in a few decades, our brains have not. We are still only able to store and access a very limited amount of information, which is broadly done in three ways:

• Transactive memory - This is where we remember how to find information rather than retain the information itself. You probably don't remember all your friends' phone numbers, but you remember how to find them in your phone's contact list. We also remember who to ask about certain topics if we can't remember the information ourselves.
• Contextual memory - We associate certain events, people, and concepts, and link them mentally, so remembering one of them reminds us of others. Similarly, we struggle to recall things which are not logically connected to a place and time where we saw them.
• Novel experience memory - We tend to remember events which are new to us. This is partly why our memories get worse as we age, because the number of new experiences we have decreases. The brain is less likely to store information it feels it already has, and we tend to have trouble distinguishing similar events. This is why we frequently can't remember if we locked the front door or turned off the oven, because we do it all the time.

Now, looking at Coke's big sponsorship of the Olympics, we can start to see why that information didn't stick in people's heads. It's not transactive, because people wouldn't look up that information. It's not contextual, because why would you associate Coke with the Olympics? And it's not novel, because it was an ad appearing exactly where an ad would be expected to be. If you see an ad on the side of an alien spaceship, you will probably remember what it's for. If you see an ad while watching television, you probably won't.

Consider that Coke suffered this fate in 1992. This was before the internet was popular, and already information overload was making their ads ineffective. If that can happen when someone is exposed to 500 ads daily, what chance do you have in an age where people are seeing thousands of ads daily? (And if you're thinking, "I don't see thousands of ads every day" - that's exactly the point. You don't even notice them.)

There are a few lessons we can learn here. One is that you can have an infinite marketing budget and still fail to make an impression if you don't make your ad memorable. It's important to make it different, put it in a context that makes sense, and ensure that engagement is intuitive and easy for your audience.

But beyond that, we can see how too many marketing decisions are made from an inherently solipsistic point of view. Ads are made by talented design teams, who sit in their offices and ponder every little detail of their work, but haven't taken into account that this isn't a movie, and people won't be sitting down to pay attention. The opposite is in fact true - people are predisposed to ignoring and forgetting you. There is so much information out there that the odds of making an impression are stacked well against you. And, if you're not careful, you can undermine your own message.

It is likely that the biggest reason Coca Cola didn't stick in people's minds as the sponsor of the Olympics is precisely because it advertised so much. Coke is a massive brand, ubiquitous, and we are so used to seeing it that if you actually try to remember where you last saw an advert for it, you probably can't. It's the concept of novel memory again - the more we're subject to a certain message, the less we actually take it in. It ceases to be new information in our mind. It's unlikely that anyone watching the 1992 Olympics was unaware of the existence of Coca Cola, so it didn't make an impact. Nothing new was learned. If anything, Coke was a victim of its own marketing strategy. The more it bombarded people with its presence, the less they remembered it. It just faded into the background.

The real lesson to learn here is that you can't just show people something and expect them to remember it. You need to understand the psychology behind why people choose to focus on certain things while blocking out others, and why some (but not all) of those things then stick in the mind. If you understand this, you will have a much better chance of reaching your audience.

Or, if you aren't going to do that, at least pick a more exciting way to waste $33 million.