Advertising Creating Positive Social Change

Advertising often gets a bad rap. It promotes over consumption, It promotes negative stereotypes. It makes us dumber. And while there’s some truth in all of this, there’s an argument to be made that advertising, in all its many forms, has also worked for the betterment of humanity. Advertising over the last two decades has created an environment where inclusive portrayals of society have actually benefited our culture, not only a company’s bottom line. 

Early in the history of advertising, the message was almost exclusively on the product. Features, benefits, and promises defined the messaging – get whiter teeth, have a greener lawn in half the time, etc. Those messages are still there, but there’s been a shift. As the battle for consumer dollars and attention have intensified, advertising has become more focused on brand. Michael Phelps pushes us to be not just a better athlete but a better human being.  Google shows us how inspirational we are through our communal search. Features and benefits don’t even factor in, as the message hones in on what it means to be caught up in this mortal coil.

Companies have shifted from delivering monologues to engaging in conversations and this dynamic has made brands more human in the process. Take Always’ #LikeAGirl campaign. Never referencing feminine hygiene, Always focuses purely on the issue of female empowerment, using the ad to begin “an epic battle” for young girls everywhere by “showing them that doing it #LikeAGirl is an awesome thing.” But Always goes beyond what a brand says about you; it’s about identifying shared goals and contributing to a higher purpose – for everyone. You care about empowering girls? Great! You can tweet the “amazing things you do” with #LikeAGirl, and “stand up for girls” confidence at Always.com. Now it’s a conversation, and that’s exactly what Always, and the other companies joining in this form of values-based advertising, are looking for. Very few people care about tampons, but equality and female empowerment? Now that’s topic people get excited about. And this isn’t just about the target audience. It’s about grandmothers, dads, everyone. It help drive a conversation that has resulted in helping break down gender-biases and shifting cultural perceptions.

Cheerios is another great example. The brand didn’t realize what it was getting itself into when it  first featured an interracial family to promote the heart-healthy cereal during the summer of 2013. A topic we take largely for granted now sparked a great deal of discussion then. The racist backlash to the ad was so intense that Cheerios disabled the comments section on their YouTube channel. And this offered the public a glimpse into the prejudice mixed race families have to contend with, sparking a national conversation. Cheerios also saw an outpouring of support from consumers applauding the commercial, and a passionate defense against the backlash with people standing up for interracial families everywhere. What began as a simple cereal commercial ended up leading to a national discussion on race relations.

When advertising focuses on empowering people and accepting groups that are less accepted, it doesn’t just reflect culture, it shapes it. When brands paint a different picture of society, they play a role in redefining what is considered mainstream. They play a role is redefining our collective worldview and thus reshape culture. This isn’t to over-inflate the role of advertising in cultural evolution. Advertising will never act as the central agent of change. But that doesn’t mean it isn’t an important part of the process. We consume massive amounts of advertising every day. When this content promotes an inclusive picture of society and positive cultural change, it can work as an accelerator for social progress. It’s value is not in starting the fire, but in fanning the flames.

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Retail Behavioral Economics

Agencies have been applying behavioral economics, sometimes knowingly, sometimes not, for years. But as a formalized discipline, behavioral economics is a relatively new school of thought at the intersection of economics and psychology (when compared against economics as a whole).  At its core is a simple principle: human beings are predictably irrational. The discipline has been used to shed light on all sorts of entrenched patterns of behavior, such as why gamblers are willing to keep betting even while expecting to lose, or why people who want to save for retirement, or to eat better, or start exercising and quit smoking, end up doing no such things. Long before behavioral economics had a name, agencies and marketers have been using it using it. “Three for the price of two” offers and extended-payment layaway plans became widespread because they worked, not because agencies had run scientific studies showing that people prefer a supposedly free incentive to an equivalent price discount. In essence, it’s about targeting behavior humans are hardwired for.

There’s nothing new in finding the psycho-social hook that triggers a reaction. What is new is an interest in systematizing behavioral thinking and using the discipline more conspicuously to shed insight on the challenges advertisers face. Advertising is a business that tries to shape how people think about their choices – it taps into the underlying triggers that drive our beliefs, actions, and passions. Neoclassical economics can explain ads only as providing information. But if the seller can invest in advertising that frames the choice, that frame will skew the buyer’s decision. In other words, a more systematic approach can unlock significant value and increase share of culture by targeting actions to match practices, beliefs, and the reptilian brain.

A shot before bedtime: Take a product’s cost less painful. In almost every purchasing decision, consumers have the option to do nothing: they can always save their money for another day. That’s why the marketer’s task is not just to beat competitors but also to persuade shoppers to part with their money in the first place. According to economic principle, the pain of payment should be identical for every dollar we spend. In marketing practice, however, many factors influence the way consumers value a dollar and how much pain they feel upon spending it.

Retailers know that allowing consumers to delay payment can dramatically increase their willingness to buy. One reason delayed payments work is perfectly logical: the time value of money makes future payments less costly than immediate ones. But there is a second, less rational basis for this phenomenon. Payments, like all losses, are viscerally unpleasant. But emotions experienced in the present—now—are especially important. Even small delays in payment can soften the immediate sting of parting with your money and remove an important barrier to purchase.

Another way to minimize the pain of payment is to understand the ways “mental accounting” affects decision making. Consumers use different mental accounts for money they obtain from different sources rather than treating every dollar they own equally, as economists believe they do, or should. Commonly observed mental accounts include windfall gains, pocket money, income, and savings. Windfall gains and pocket money are usually the easiest for consumers to spend. Income is less easy to relinquish, and savings the most difficult of all.

Technology creates new frontiers for harnessing mental accounting to benefit both consumers and marketers. A credit card marketer, for instance, could offer a Web-based or mobile-device application that gives consumers real-time feedback on spending against predefined budget and revenue categories—green, say, for below budget, red for above budget, and so on. The budget-conscious consumer is likely to find value in such accounts (although they are not strictly rational) and to concentrate spending on a card that makes use of them. This would not only increase the issuer’s interchange fees and financing income but also improve the issuer’s view of its customers’ overall financial situation. Finally, of course, such an application would make a genuine contribution to these consumers’ desire to live within their means.

Become the icon: Harness the power of a default option. The evidence is overwhelming that presenting one option as a default increases the chance it will be chosen. Defaults (what you get if you don’t actively make a choice) work by instilling a perception of ownership before any purchase takes place, because the pleasure we derive from gains is less intense than the pain from equivalent losses. When we’re “given” something by default, it becomes more valued than it would have been otherwise. And we are more loath to part with it.

Savvy marketers can harness these principles. An Italian telecom company, for example, increased the acceptance rate of an offer made to customers when they called to cancel their service. Originally, a script informed them that they would receive 100 free calls if they kept their plan. The script was reworded to say, “We have already credited your account with 100 calls, how could you use those?” Many customers did not want to give up free talk time they felt they already owned.

Defaults work best when decision makers are too indifferent, confused, or conflicted to consider their options. That principle is particularly relevant in a world that’s increasingly awash with choice. A default eliminates the need to make a decision. The default, however, must also be a good choice for most people. Attempting to mislead customers will ultimately backfire by breeding distrust.

Limit the options: Don’t overwhelm consumers with choice. When a default option isn’t possible, marketers must be wary of generating “choice overload,” which makes consumers less likely to purchase. In a classic field experiment, some grocery store shoppers were offered the chance to taste a selection of 24 jams, while others were offered only 6. The greater variety drew more shoppers to sample the jams, but few made a purchase. By contrast, although fewer consumers stopped to taste the 6 jams on offer, sales from this group were more than five times higher. Large in-store assortments work against marketers in at least two ways. First, these choices make consumers work harder to find their preferred option, a potential barrier to purchase. Second, large assortments increase the likelihood that each choice will become imbued with a “negative halo”—a heightened awareness that every option requires you to forgo desirable features available in some other product. Reducing the number of options makes people likelier not only to reach a decision but also to feel more satisfied with their choice.

Brand matters: Position your preferred option carefully. Economists assume that everything has a price: your willingness to pay may be higher than mine, but each of us has a maximum price we’d be willing to pay. How marketers position a product, though, can change the equation. Consider the experience of the jewelry store owner whose consignment of turquoise jewelry wasn’t selling. Displaying it more prominently didn’t achieve anything, nor did increased efforts by her sales staff. Exasperated, she gave her sales manager instructions to mark the lot down “x½” and departed on a buying trip. On her return, she found that the manager misread the note and had mistakenly doubled the price of the items.  In this case, shoppers almost certainly didn’t base their purchases on an absolute maximum price. Instead, they made inferences from the price about the jewelry’s quality, which generated a context-specific willingness to pay.

The power of this kind of relative positioning explains why marketers sometimes benefit from offering a few clearly inferior options. Even if they don’t sell, they may increase sales of slightly better products the store really wants to move. Similarly, many restaurants find that the second-most-expensive bottle of wine is very popular. So is the second-cheapest. Customers who buy the former feel they are getting something special but not going over the top. Those who buy the latter feel they are getting a bargain but not being cheap. Sony found the same thing with headphones: consumers buy them at a given price if there is a more expensive option, but not if they are the most expensive option on offer.

Another way to position choices relates not to the products a company offers but to the way it displays them. For instance, that ice cream shoppers in grocery stores look at the brand first, flavor second, and price last. Organizing supermarket aisles according to way consumers prefer to buy specific products makes customers both happier and less likely to base their purchase decisions on price, allowing retailers to sell higher-priced, higher-margin products. For thermostats, by contrast, people generally start with price, then function, and finally brand. The merchandise layout should therefore be quite different.

Marketers have been aware that irrationality helps shape consumer behavior for a long time. Behavioral economics can make that irrationality a bit more predictable. Understanding exactly how small changes to the details of an offer can influence the way people react to it is crucial to unlocking significant value.

Rebranding in a Recession: It begins within

When the economy turns sketchy, the inclination of most company  heads is to cut back on marketing, branding, and advertising. After the last few years of elevated unemployment and decreased consumer spending it still holds true.  With a drop in expenditures on awareness campaigns, maintaining or revitalizing a brand often falls to the responsibility of a company’s greatest potential marketing tool, the employee, though this is rarely a conscious decision on the part of management.  When it is a conscious effort, it is typically a huge success or a dramatic failure, with little room for anything in between.

Re-branding during an economic downturn is nothing  new.  As concerns over an unstable economy grow, companies often feel compelled to reinvent themselves and build new interest in the hopes of generating revenue.  They also turn to employees to get out  the message.  This is particularly true of internal projects meant to garner greater productivity, commitment and support from employees  as a company deals with the ramifications of declining profits, lay offs, and employee ambivalence that matches or exceeds that of the  general public. It is frequently something of a catch 22 scenario, where employees are losing or have lost faith in a company and its leaders, even as the need for them to embrace a brand, to truly live it, is at a high point.  But, there are strategies to mitigate dismissal by the employees of an internal branding or a re-branding project during  economic uncertainty and looming lay offs.  Without embracing these  strategies, these projects will ultimately lead to failure, no matter how  creative it may be.

1. Deal with financial realities

As uncomfortable as transparent, open communication may be, leaders, particularly those at the upper-most levels, must relay information about the company’s financial position and forecast to the survivors, establishing priorities and expectations for future decision  making.  Employees must be made to feel that they are part of a  team, not expendable parties.  They must feel that the success of the  company rests partly in their hands, that they have a stake in the  game. Human beings have a remarkable capacity for embracing challenges.  We also have a remarkable capacity for getting involved when we believe we actually have something to lose beyond monetary gain.  Couching in terms that bring the financial realities to life draws employees in and helps develop intense loyalty even if things look gloomy.

If lay-offs have happened the remaining employees may feel that they will be next to lose their jobs.  Whether they believe it is a month away or two years away, the fear becomes ever-present.  The result is abandonment of commitment to the company and lowered productivity.  Additionally, some will feel guilty (sometimes angry) when colleagues have lost their jobs.  They will also view any attempt to get them excited about the company as being based on lies and deception.

2. Reposition the effort as the beginning of better days to come

Understand that people have lost friends and will no doubt have their own anxieties about the future. Get people refocused quickly on any brand message, internal restructuring, job/function changes and any other changes underway, or looming on the horizon.  Focus on the positives by acknowledging what has just happened – that it was necessary evil, but the new branding effort is an extension of brighter days ahead.  The key is that the problems that have existed, and in the eyes of those being hit they are problems to say the least, cannot be overlooked.  Acknowledging these means acknowledging the humanity, involvement, and importance of the employees.  It also makes the idea of better days ahead significantly more realistic and believable.

3. Make sure it is a bottom-up approach

No matter how good a job management does in making employees feel heard and included, they’re still suspect because it is management who pulled the trigger if cuts occurred (especially if those cuts were due to downward sales).  No one cares if they support it. Furthermore, if a company already tends to be structured in highly defined silo, these tend to become more “tribal” as conditions worsen.  This means that only managers with direct, frequent contact with mid and lower level employees have rational and emotional credibility. While an individual VP or Director may be believable, management as an institution is suspect – you may have a good manager in your department, but all the rest are heartless, opportunistic, and looking out only for themselves.  What matters is that the people who have a stake in the company on a day to day, put-bread-on-my-table kind of way are supportive.

4. Get top-down support 

While the re-branding effort needs to get the bulk of its drive from the base of the company, it is helpful to have a CEO or Chairman that champions the cause, particularly it he or she can tie it directly back any major changes in management and policy.  This, however is a tricky business and is dependent on the top brass being seen as taking a populist, no nonsense approach to the business.  If the head of the company is seen as simply carrying on a tradition of undirected change and business as usual, little real change occurs.  If the head of the company is seen as a having a dynamic, uncompromising, innovative approach to dealing with company woes, employees believe that change for the better is an attainable possibility and they will embrace a new  internal branding effort.  

5. Remember that logic and reason may take a back seat

The bulk of employees understand and can articulate the ramifications of lost revenue and brand disintegration, but that hardly eases the tension.  There is a tipping point at which reason and logic take a back seat as worry, fear, and cynicism assert themselves.  This means that any brand initiative needs to account for this heightened sense of emotional distress and recognize that employees will not be thinking about the well-being of the corporation if they do not see it tied to  themselves on a very personal level.  Making a financial case is irrelevant when people are in survival mode.  Consequently, while being transparent about the economic realities of the business is essential to a successful campaign, it is equally important to acknowledge emotional distress and react to it openly and honestly.