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Some Very Important Effects In Advertising | Richard Shotton

Richard Shotton is a behavioural scientist, the Founder of Astroten and an author. What is the reason that restaurants don't put £ signs in front of their prices? Why do marketing campaigns with huge flaws end up winning the market over? How does increasing wait times on comparison sites improve customer buy-in? And why do budget airlines reduce quality of experience to improve trust? We're talking all things behavioural science today. One of my favourite topic areas with a fascinating guest, this episode is absolute gold and packed with great concepts and hilarious real world examples. Do not sleep on this one. Extra Stuff: Follow Richard on Twitter - https://twitter.com/rshotton Buy Richard's Book - https://amzn.to/2YCQfdt Buy Richard's Online Course - https://www.42courses.com/courses/behavioural-science-for-brands Listen to Rory Sutherland on Modern Wisdom - https://podcasts.apple.com/gb/podcast/049-rory-sutherland-psychology-in-the-world-of-advertising/id1347973549?i=1000428600578 Check out everything I recommend from books to products and help support the podcast at no extra cost to you by shopping through this link - https://www.amazon.co.uk/shop/modernwisdom - Listen to all episodes online. Search "Modern Wisdom" on any Podcast App or click here: iTunes: https://apple.co/2MNqIgw Spotify: https://spoti.fi/2LSimPn Stitcher: https://www.stitcher.com/podcast/modern-wisdom - I want to hear from you!! Get in touch in the comments below or head to... Twitter: https://www.twitter.com/chriswillx Instagram: https://www.instagram.com/chriswillx Email: modernwisdompodcast@gmail.com

Richard ShottonguestChris Williamsonhost
Aug 5, 20191h 10mWatch on YouTube ↗

EVERY SPOKEN WORD

  1. 0:00 – 1:03

    Why advertising is swinging back from “data & targeting” to psychology

    1. RS

      The big interest for me is I think that advertising's undergoing a bit of a change at the moment. And this might be wishful thinking, but there was such euphoria a few years ago about how the rise of data and the opportunities of targeting was gonna change advertising that I think there was so much overclaim. I think brands got very excited, and then a lot of those benefits didn't materialize. What I think we're now seeing is an, is a, is the k- kind of pendulum swinging back from a fascination with technology, and it's not gonna disappear completely, of course not, but swinging more towards some of those eternal truths of, uh, that psychology identifies. So, I, I, I think that's, that to me is a, uh, an, an exciting area at the moment, that more and more advertisers are thinking, "Well, how can we unearth, uh, insights into our audience by harnessing this field of psychology and behavioral science?"

  2. 1:03 – 3:30

    Astro10: the company name that came from a (literal) typo

    1. CW

      I am joined by Richard Shotton, founder of Astro10 and author of The Choice Factory. Richard, welcome to the show.

    2. RS

      Hi. Good to meet you, Chris.

    3. CW

      Fantastic to have you on. Um, just before we started, you told me that Astro10, your company, is actually the wrong name for itself. Can you, can you explain what's happened there?

    4. RS

      (laughs) It is, it is the wrong name. Uh, so l- I set it up last August, and I was on a holiday, and it was getting to the stage where I just needed a name and I thought, you know, Richard Shotton Consultant would just be a bit naff.

    5. CW

      (laughs)

    6. RS

      So I was, uh, flicking through a, pretty much a textbook on psychology experiments, and I came across this experiment, uh, back in the '60s which was all about, um, the, the pernicious effects of authority. And in the, in the experiment, what the, the psychologists did was ring up hospitals, uh, said to nurses, "Quick, quick, you've gotta go and find Patient Jones and give them 100 milligrams of Astro 10." And they shouldn't have accepted the order over the phone, and when they got to the medicine cabinet, and that- there was the fake medicine, Astro 10, and it said in big letters, "Don't give anyone more than 10 milligrams."

    7. CW

      Mm-hmm.

    8. RS

      Yet despite these two facts, 95% of the nurses tried to administer the fake drug.

    9. CW

      Did someone step in and go, "What are you doing? No, no, no, no."

    10. RS

      Y- yeah, I'm guessing there was a, there was someone, uh, you know, uh, uh, hiding in a cupboard or something. I do- I don't know what... yeah, th- that, that part (laughs) . Uh, but the... so I thought, "Yeah, this is brilliant." Um, relevant name for the company, it's part of an, uh, psychology experiment, and I also kind of liked the anti auth- anti-authoritarian vibe that, you know, was one of the reasons for setting them up on my own. So I registered the name, got the website, uh, registered at Companies House, did all that stuff, and then (laughs) about a month or two later, I thought, "Well, if I'm gonna call myself Astro10, I should probably read the original paper." Uh, and I went and found this paper, and as I was halfway through, I suddenly realized to my horror that the textbook had had a typo. So the, the, the drug in the real experiment back in the '60s was not Astro 10, it was Astro-Gen. So my company is (laughs) -

    11. CW

      (laughs)

    12. RS

      ... it's a, it's n- it is a mistake, I mean, how can you make this up?

    13. CW

      Your company is a typo?

    14. RS

      (laughs) Yeah, my company's a typo. But I thought after that time, one, I couldn't be bothered to re- uh, get another website, and yeah, I kind of l- I kind of like the fact that there's a... very kind of a... (laughs)

    15. CW

      You've got a typo behind it, yeah, which is like, again, it's human behavior, right?

  3. 3:30 – 5:15

    The Pratfall Effect: why admitting a flaw can make brands more persuasive

    1. RS

      Yeah. Well, the, the... yes, one of the, I mean, my favorite, one of my favorite biases, uh, is this idea. Have you heard of a thing called the pratfall effect?

    2. CW

      Nope. Lay it on us.

    3. RS

      So the... ah, so the pratfall effect, um, it's an experiment back in the... done by Ell- Elliot Aronson who was this professor at Harvard, uh, in the 1960s. And in 1966, he runs his classic experiment where he gets a f- colleague of his to take part in a quiz. He has given his colleague all the answers. So the guy does amazingly well, gets 92% of the questions right, wins the quiz by miles, looks like a genius. But then as the quiz is finishing, the guy makes what an American would call a pratfall, a small blunder. As he's standing up, he spills a cup of coffee down himself. So Aronson's recorded this entire incident, great quiz performance, and then the blunder. He plays it to people, but he edits the, uh, th- the clip so there are two versions. One has everything, and the other version edits out the mistake. And when he asks listeners, uh, how appealing they find the contestant, the contestant is seen as significantly more appealing if people have heard the mistake as well as the amazing performance. And Aronson calls this the, the pratfall effect, this idea that we prefer people, or relevantly for advertisers, products who exhibit a flaw.

    4. CW

      That's-

    5. RS

      And I, and I love it 'cause I think, one, it runs very counter to what people, uh, assume, and then secondly, if you look at the greatest addict- ads through history, it's interesting quite how many of them have had this insight at their very heart.

  4. 5:15 – 10:41

    Classic ads that weaponize flaws (VW, Avis, Guinness, Stella, KFC)

    1. CW

      What like?

    2. RS

      So, um, you go all the way back to probably the, the, the earliest was 1959 VW. They had a classic campaign, ad age said, ad age said was the greatest campaign of the 20th century, ug- where they had flaws at their very heart, "Ugly is only skin deep." Um, you've got more, uh, moving more recent, well, a little bit more recent it was Avis, "We're number two so we try harder," essentially admitting-

    3. CW

      (laughs)

    4. RS

      ... uh, Guinness admitting they're slow, "Good things come to those who wait." Stella, "Reassuring and expensive." Uh, and more recently, K- you know, KFC tweeting that their fries are damn awful. Uh-

    5. CW

      Their frie- our, our fries suck.

    6. RS

      Yeah, yeah. Yeah (laughs) .

    7. CW

      They've told us they suck, so give us, give us six months, we'll come back with a better recipe.

    8. RS

      Yeah, yeah. Uh, so it's a... and I think what those advertisers have realized is that-... probably the biggest hurdle you have as an advertiser... Well, probably the biggest hurdle is being noticed. Um, and actually, the pratfall effect's good for that because if everyone else is bragging, if you are distinctive, you're much more likely to be noticed. And there's lots of evidence about that. There's a wonderful experiment, uh, called the Von Restorff effect, which, which proves that. Uh, so it g- it gets you noticed. The next biggest hurdle as an advertiser is their believability. You know, most people assume advertisers... Well, they... You know, the cynics assume they lie, which is not true, but i- most people assume that advertisers are at least putting a, a positive spin on the truth.

    9. CW

      Mm-hmm.

    10. RS

      So the amazing thing with the pratfall effect is if you, uh, admit a flaw, you've tangibly demonstrated your honesty, and then all your other claims become that much more believable.

    11. CW

      Mm.

    12. RS

      And then I think the final thing it does, which is excellent, is those brilliant advertisers don't admit a flaw randomly. They, they go to great lengths t- to think, "Well, what's our core strength?" And then they think about a flaw, the, uh, it's the mirror image of that strength. 'Cause in many cultures, flaws and strengths are two sides of the w- the same coin, you know? So Stella say they're expensive, but that's 'cause they know people assume that expensive things are better quality. Or VW go out and say, "Yes, we're ugly," but then they follow up by saying, "Well, that's 'cause we don't care about aesthetic fripperies. We care about engineering excellence." So it's this fascinating approach, yet I find it f- so interesting because even though it's got all this evidence, and there's so much more than just the Aronson experiment, advertisers very, very rarely use it. You know, if you pick up... If you watch a, um, few hours of TV tonight, you'll see... You probably won't see a single advertiser admitting a weakness.

    13. CW

      Mm.

    14. RS

      And it's all very well and good saying the best ones use it, but they are in the, they are in the minority.

    15. CW

      Is it a way to humanize brands? Is that-

    16. RS

      I think-

    17. CW

      ... one of the things that's happening?

    18. RS

      Yeah. I think that's, yeah, that's one of the oth- other things that it does. As you say, if, if you admit a weakness, then you, I think, are changing that kind of power dynamic.

    19. CW

      Mm. Yeah, definitely.

    20. RS

      (clears throat)

    21. CW

      Well, I mean, looking at, um, some of the biggest memes and things that come out of TV, apart from the fact that it's funny moments, but if you look at the stuff that comes off Love Island or, um-

    22. RS

      Mm.

    23. CW

      ... s- like, Dancing on Ice, Celebrity Dancing on Ice and stuff like that, it's always someone pulling an awkward face, or tripping up a step, or doing-

    24. RS

      Yeah, yeah, yeah.

    25. CW

      ... something like that. Like, no one ever loves the person who's flawless, because I don't think that they're able to relate, and I think that that's the same with the businesses as well. And obviously, you don't want Boeing... Well, this is probably quite timely, like, given how many issues they've had recently with that 357 MAX or whatever it's called, um-

    26. RS

      Uh, yeah, yeah, yeah.

    27. CW

      You don't want Boeing to be admitting, like, "Our planes aren't that safe, but they'll get you there fast." Like-

    28. RS

      Yes. (laughs)

    29. CW

      "No, no, no, no, no. No, don't, don't talk about that weakness, Mr. Boeing. Like, let's not bring that one up." Talk about the fact that, that Harley Davidson one that you posted on your Twitter the other day.

    30. RS

      Oh, yeah, yeah, yeah, yeah, yeah.

  5. 10:41 – 22:17

    When friction is useful: the IKEA effect and making effort feel meaningful

    1. CW

      Yeah, how can we play off the back of it? And definitely using some of those things as an indicator of quality. That's what's happening, isn't it? It's... Price is an indicator of quality. The wait time is an indicator of quality. It's what is a characteristic people want, and how can we make our weakness be some sort of a signal that that is an important part of it? I was r- talking about Guinness. I was recently in America, and I was at the, uh, United States National Whitewater Rafting Center, which is like-

    2. RS

      Yeah.

    3. CW

      Anyone who's ever worn Patagonia, like, that's where they will... That's, that's their heaven.

    4. RS

      Yeah.

    5. CW

      That's where they die and go to. It's like mountain biking, and hill climbing, and whitewater rafting, all this stuff. And at the s- the... They don't have a bar that serves alcohol, but they have a bar which has numerous cold brew coffees on tap, and I was like, "Oh, God." (laughs)

    6. RS

      (laughs)

    7. CW

      "I'm gonna take this." And sure enough, they have one which, um, takes the same time as Guinness to pour, and that's its advertising strategy.

    8. RS

      Oh, okay.

    9. CW

      It comes out.

    10. RS

      Yeah, yeah.

    11. CW

      It's like a pint of... just under a pint of cold brew coffee, but it settles the same way. It gets poured the same way. They have to tilt the cup, the cup in the same way. They serve it-

    12. RS

      Yeah.

    13. CW

      ... with the logo turned towards you-

    14. RS

      Ah, okay.

    15. CW

      ... and push it across. I was like-

    16. RS

      See-

    17. CW

      ... "This is cool."

    18. RS

      That is, that is fascinating 'cause, um... I've not quite linked the two, but there is another bias called the IKEA effect by Dan Ariely and Norton. Um, um, what they talk about is generally-... removing friction, making things easier is a massively underrated, um, approach for marketers and people who want behavior change. So th- however, they, they argue there a- are rare occasions when you should try and make things harder.

    19. CW

      Mm-hmm.

    20. RS

      And at the beginning of the paper, they talk about a famous story from General Mills and Betty Crocker. I don't know if you've heard about this one. It, so, it was back in the, the 1950s, you've got more m- um, uh, households where both men and women are working, so there's less time to cook cakes for the, for kids. So, the General Mills think, "Well, you know, how do we tap into this, uh, changing behavior? Well, let's make a super simple cake mix." A cake mix, all you have to do, tear the top of the packet open, pour it in a tin, add some water, chuck it in the oven-

    21. CW

      Mm-hmm.

    22. RS

      ... and you've got your lovely cake half an hour later. They launched this, and despite it seemingly being absolutely spot on for the era, cake sales are awful. They then ponder why this is for a while, and they begin to think, "Well, we've made this too easy." You know? Because a cake isn't just about providing calories for your family. It's about showing your love.

    23. CW

      Yeah.

    24. RS

      And if you've made something really, really easy, it doesn't show love because, you know, part of that is, you know, going through a bit of rigmarole.

    25. CW

      Mm-hmm.

    26. RS

      So, they then follow up with a new cake mix in which they artificially make the cake mix more complicated. They make it harder to bake. So now, you have, you've got, still got your cake mix in your packet, still tear it open, you still pour it in the tin. This time you have to crack an egg into it.

    27. CW

      (laughs)

    28. RS

      And now, by making it harder, once they've done that, that's when the cake sta- uh, mix sales start to take off. And-

    29. CW

      Costly signaling.

    30. RS

      Yeah, I think, well, may- maybe the cost is time there. I mean-

  6. 22:17 – 29:13

    Pain of payment: why contactless, menus, and Uber can change spending behavior

    1. RS

      insights at their heart as well. So, Uber, for example. Of course, you know, the functionality behind that, uh, you know, i- i- is amazing. But there are some really clever psychological points there as well, that there is research, and I can't remember the, the name of the psychologist, but there's quite a lot of research that shows that, um, specific waits, as in, I know I've got to wait five minutes, is much less painful than an unspecified wait that ends up being five minutes.

    2. CW

      Okay.

    3. RS

      It's one of the great things that Disney do. They... When you get to that ridiculously long-

    4. CW

      20 minutes from this point.

    5. RS

      Yes, exactly. So people can quit worrying about whether they're gonna get to the front or not, and they can do something else for 20 minutes and have a chat, and then...

    6. CW

      (laughs)

    7. RS

      So it removes the pain. So th- they were brilliant on that. But the other bit that I think they're amazing at, and I think this is (laughs) key to their success, is the means of payment. You know, there is lots of evidence that the, the more s- distance you put between someone getting your product and them handing over cash, the cheaper it feels. So, you know, when you go to a casino, they don't expect you to be putting down £10 notes on the table. They get you to turn that cash into chips.

    8. CW

      Hmm.

    9. RS

      So people become less price sensitive. When people have credit cards, they become less price sensitive than cash. After th-

    10. CW

      I'm gonna guess that when, when you're abroad as well, and you're using just-

    11. RS

      Ooh.

    12. CW

      ... plastic ... This is-

    13. RS

      Yeah.

    14. CW

      Everyone makes the same joke, "It looks like plastic, mate."

    15. RS

      (laughs) Yeah.

    16. CW

      You're like, "It's fucking not, mate. It's worth just as"-

    17. RS

      (laughs)

    18. CW

      "... much as your money."

    19. RS

      Yeah, yeah, yeah (laughs) , but you're not quite sure on the, uh, conversion rate, and you... Yeah.

    20. CW

      Yeah.

    21. RS

      Yeah, I think... I've, I've never seen any studies on that, but I bet you, I bet you're right. Uh, the one I've done, which was, I think, it might have been the first ever experiment I ran with, uh, a lovely researcher called Claire Linford.... and it was about contactless payment. So we waited until people came out from, uh, coffee shops, mini marts, little delis, and then we stopped them and said, "Can you answer three questions?" And we said, "How much have you paid? Can we see your receipt?" And... No, sorry, sorry. "How much have you paid, what was your means of payment, and then can we see your receipt?"

    22. CW

      Mm-hmm.

    23. RS

      And so we compared what they thought they'd paid with their receipt, was what they'd actually paid-

    24. CW

      Uh-huh.

    25. RS

      ... and then we cut the data by means of payment. So people who pay with cash, three-quarters-ish, I think, uh, knew exactly what they'd paid.

    26. CW

      Hmm.

    27. RS

      Those who don't overestimated their spend by about, I think it was about 10%.

    28. CW

      Hmm.

    29. RS

      Credit cards, two-thirds knew exactly what they'd spent and when they didn't, they were as likely to underestimate as overestimate. Contactless, less than half did remember and they variably underestimated their spend. So you had this swing of about 15% in memory of spend between cash-

    30. CW

      Hmm.

  7. 29:13 – 32:39

    Social proof done creatively: queues, nightclub tactics, and Apple’s white earbuds

    1. RS

      Yes. Um, for nightlife, because I didn't know that was your, uh, your, your area. Um-

    2. CW

      It is.

    3. RS

      ... maybe the bias that's most regularly applied, uh, by night clubs is the famous kind of attempts at building social proof.

    4. CW

      Mm-hmm.

    5. RS

      You know, build up... So social proof, this idea of we don't make our decisions fully individually. We look around to what others are doing, and things that are popular become more popular still. So the classic nightclub trick of that was always, you know, don't let people in straightaway. Build up the queue outside so it feels like it's, uh, appealing.

    6. CW

      You're giving away all of our secrets here.

    7. RS

      Yeah, well, and I think-

    8. CW

      (laughs)

    9. RS

      ... that's one of the things people are onto.

    10. CW

      Yeah.

    11. RS

      Uh, but that, that's... I think that is a fascinating idea because it's one of the most proven, uh, biases in social psychology. Um, Cialdini showed it with towel reuse, Christakis with smoking, uh, HMRC with tax repayment rates, Fang with, um, restaurant menus. Again and again-... the, if you tell people what the popular course of behavior is, it becomes more popular still. But why I think it's really interesting is that a lot of advertisers are very literal in their interpretation of that insight. You know, so you go out and you see, uh, beer brands saying they're Britain's most popular, or, you know, Tunnock's chocolate bar is selling five million a week-

    12. CW

      Mm-hmm.

    13. RS

      ... or Oracle that 97% of CEOs use them. And I think that's all very well and good, but what marketers should aspire to is not seeing the behavioral science experiments as the end point. I think what they should aspire to is, um, thinking of them just as stimulus for good ideas. And then if they apply their strengths of creative thinking, that's when the best ideas happen. So seeing that you've got your white earbuds on, that's probably my... The white earbuds are probably my favorite example of a brand taking social proof and using it laterally.

    14. CW

      Mm-hmm.

    15. RS

      Think back to when iPod launched, what, pro- 2001-ish. When they launched they were not the market leader, you know, lots of other brands had got out there first. There's no way they could honestly go out and say, uh, you know, "We're the most popular brand bias."

    16. CW

      Mm-hmm.

    17. RS

      But the other brands made a error of, uh, not being very visible.

    18. CW

      Mm-hmm.

    19. RS

      So if you were s- when people had Sony MP3 players no one knew, you know, if you saw someone with a tube or on the train, all you would see is their indistinguishable black earphones. You know, the MP3 player itself was in the person's pocket. You had no idea if it was Sony or Motorola. What Apple did so brilliantly was making a massive play of all their advertising focused on the bright white earphones.

    20. CW

      Mm-hmm.

    21. RS

      All the chart advertising focused on that. Very, very distinctive, only person who did it. So as soon as you saw white earphones you knew someone was listening to Apple.

    22. CW

      Mm-hmm.

    23. RS

      They looked like they were the market leader long before they were, and that set in this virtuous circ- set in train this virtuous circle of social proof.

    24. CW

      Yeah.

    25. RS

      So those lateral harnessings, the lateral harnessing of these biases I think becomes really exciting. When it's through the design or through the insinuation.

    26. CW

      Yeah. So...

    27. RS

      Mm-hmm.

  8. 32:39 – 41:30

    Desert-island bias #1–#2: Pratfall effect and Price Relativity

    1. CW

      You're stranded on an island-

    2. RS

      Yep.

    3. CW

      ... and you're allowed to take five biases with you, or you're allowed to be aware of five biases. So I'm gonna ask you to choose your five favorite children.

    4. RS

      Oh, okay. Okay. Well, we've had the pratfall effect.

    5. CW

      Is that one of your top five? Is that, is that-

    6. RS

      That, that would be, that, yeah, I'd, I'd be lying if it wasn't. It's the pratfall, I think, yeah, I, I love it.

    7. CW

      Okay.

    8. RS

      It's... Yeah.

    9. CW

      Who's gonna be, who's gonna be number two and why? And let's go through it.

    10. RS

      Okay. So the second one I probably have something like price relativity.

    11. CW

      Okay.

    12. RS

      So this is the idea that consumers don't have a fixed conception of value. What's good value, you know, so I think in Roy Sutherland's words, "There's no one walking around the shops thinking they're prepared to pay £1 per unit of happiness-"

    13. CW

      Mm-hmm. Mm-hmm.

    14. RS

      "... whether it's a Coke or a pair of trainers." It'd just be too complex.

    15. CW

      Yeah.

    16. RS

      So what Daniel Kahneman talks about often, he says, look, when people have a complex problem, like is this thing good value? Rather than try and weigh that up in a very complex way, they r- they replace the complex calculation with a much simpler, uh, calculation. A calculation that's almost as good but much simpler. And the simpler calculation is what did I pay for something similar in the past? If I'm now being asked to pay more this new thing is bad value. If I'm th- now being asked to pay less this new thing is gr- uh, great value. Now, that should interest marketers because it means that people's conception of value is not an absolute thing. It's a relative thing. It depends what your comparison set is. So if you can change the comparison set for your product then, um, you can change people's willingness to pay by orders of magnitude.

    17. CW

      Mm-hmm.

    18. RS

      The-

    19. CW

      Have you got an example? Have you, could you give me an example of that?

    20. RS

      So the... A recent one, probably not the biggest one, but a recent one would be have you seen this, like Seedlip non-alcoholic gin?

    21. CW

      No. No. (laughs)

    22. RS

      It tastes 10 times... And when it's not on offer it's 25 quid.

    23. CW

      Okay.

    24. RS

      Uh, and everything they do about it is, you know, the brand, the imagery, the bottle it comes in, the fact they call it a non-alcoholic spirit, it's, uh, compares it to other, um, alcoholic drinks. So when you're comparing it with a gin, you know, 25 quids expensive but it's in line with an artisan gin. And, you know, it sells reasonably well. But if you think about what that product is, it's essentially an adult cordial.

    25. CW

      Mm-hmm.

    26. RS

      You know, if you stuck it next to Ribena, if that sold not on the gin aisle but in the Ribena aisle-

    27. CW

      Yeah.

    28. RS

      ... there is no way on earth any right-minded consumer would pay more than a fiver.

    29. CW

      Mm-hmm.

    30. RS

      You know, but, because people would suddenly be saying, "Well, okay, it's a bit fancier than Ribena," but th- you know, the £2 would be their-

  9. 41:30 – 46:39

    Desert-island bias #3: “9-Enders” and targeting life-change moments cheaply

    1. RS

      Yeah. Uh, for different reasons, I'm probably have, uh, nine-enders.

    2. CW

      (laughs) I don't understand that word.

    3. RS

      Sorry (laughs) .

    4. CW

      Just... Okay. I mean...

    5. RS

      Yeah, okay. So, so, uh, how old are you by any chance?

    6. CW

      31.

    7. RS

      Ah, damn. Uh, we should have done this podcast, we should have done it in eight years' time.

    8. CW

      Cool.

    9. RS

      Uh, so nine-enders is the idea that, from Adam Alter and Hal Herschfield, that people whose age ends in nine are particularly likely to make big, major lifestyle decisions.

    10. CW

      (laughs) Oh, my god.

    11. RS

      So it sound... I mean, when I first, exactly, my reaction when I first read this was, "This sounds hokum." Uh, and at first I wasn't persuaded by their initial... Well, what, what he initially talks about, he says, "Well, we proved this by running a huge global survey," I think it's 40-odd thousand people, and people, uh, were much more likely to agree with the statement...... uh, "I've made a big lifestyle change in the last 12 months," if their age ends in a nine.

    12. CW

      Okay.

    13. RS

      But there's all sorts of problems with claim data, so that, that's a little bit weak. But what they then did was brilliant. They looked at loads of observed datasets to try and test their hypothesis. So they look at, um, first time marathon runners, and they're 48% more likely to do a marathon the first time when their age ends in nine.

    14. CW

      (laughs)

    15. RS

      They look at, uh, guess what-

    16. CW

      (laughs)

    17. RS

      ... they look at, uh, affairs websites, they look at Ashley Madison. (laughs) I mean, this, this, uh, it's not a great affairs website, but they (laughs) gave their eight million database of men to these researchers, and they found that men were 18% more likely to join this website when their age ends in nine. They even looked... And this gets a bit more depressing.

    18. CW

      (laughs) .

    19. RS

      They looked at, um, American suicide data, and there is a small, but statistically significant uplift in suicides when people's age ends in nine. Now, what they then argue, so th- so robust study 'cause they're, they're prioritizing observed data over claim data. They argue that this happens because people put... Um, they don't treat all time as equal. Some moments are given disproportionate importance, so when people are approaching the turn of a decade, that has big cultural significance, so in that 12 months before, people are at least thinking, "Well, how is my life going?" And a lo- lots of people think, "Well, it's absolutely fine," don't make any changes. But there's a large enough proportion who think things are going poorly, they make these big, radical changes.

    20. CW

      Mm-hmm.

    21. RS

      Now, part of the reason I take this to the desert island is I like this 'cause it's practical. You know, 10 years ago, knowing that as an advertiser, well, what the hell would you do with it? Now, it is very, very simple, you know, loads of digital media owners capture people's birthday, it's very, very easy to target people by age.

    22. CW

      Mm-hmm.

    23. RS

      But the other reason, and this is probably why it makes it on the top five, I love it, is there's a really strong economic reason for using this bias. Like if you're a, if you're the government trying to get people to stop smoking, if you're a diet brand, if you're a gym brand, if you're probably a seller of luxury, um, convertibles, you know, targeting people whose age ends in nine, when they are, uh, you know, mulling over the direction of their life, it's probably a very, very personal time. But the reason I love it from the economics of it is media. When advertisers buy media space, it's increasingly bought through an auction. So in the milliseconds-

    24. CW

      Mm-hmm.

    25. RS

      ... before you see an ad, an auction's gone on and th- the winner gets to serve their ad. There... If you are in an au-... If you are using the same data signals as every other brand, and most brands all default to income, you know, 1834s, ABC1s, if you're just buying on the same metrics as everyone else, well, when you're in a busy auction, you tend to overpay. What you need to do is isolate a factor that no one else is using-

    26. CW

      Mm-hmm.

    27. RS

      ... like 9 Enders, bid on that, and you're much more likely to get a bargain. So I think 9 Enders makes it because at first, I was very doubtful. I love the creativity that Alter and Hershfield showed to test this point, and then I love the fact that it's both practical and there's some economics behind it.

    28. CW

      I can't get over the name.

    29. RS

      Yeah. No, it just- (laughs)

    30. CW

      (laughs) I can't get over the fact that it's called 9 Enders.

  10. 46:39 – 1:02:15

    Desert-island bias #4–#5: why claimed data misleads & the Dunning–Kruger story

    1. RS

      S- The island... Well, I would have, and this is... It's related to, uh, the danger of claimed data, I think, you know, and touching on that with, um, uh, 9 Enders.

    2. CW

      (laughs)

    3. RS

      There is a lovely experiment by Adrian North, who was at the University of Leicester, and, um, and his experiment was around playing different music in the wine aisle of a supermarket. So some occasions, he plays, you know, stereotypically French music, accordion stuff.

    4. CW

      Mm-hmm.

    5. RS

      Some, he plays stereotypically German music, brass bands and things.

    6. CW

      Mm-hmm.

    7. RS

      And then he monitors the proportion of wine sales, so he ignores all the other nations, just looks at French and German wine sales.

    8. CW

      Mm-hmm.

    9. RS

      When the French music plays, 77% of the wine from those c- two countries is French, 27% German. When the German music plays, 73% is German, 27%, uh, 27% French. So the, the, the, the nationality being bought sways massively 'cause of this small environmental cue. So part of it, you know, he's, he, he's experienced mainly about the music and the importance of these environmental cues. But what's interesting, from another perspective, is what he does next. As people are leaving the supermarket, he stops them and he says, uh, "Did you buy any wine? Did you buy any French or German wine?" And then if they've said yes to both those questions, he says, "Well, why did you buy that wine?" And only 2% of people say they bought the wine because of the music. And even when he asks them directly, even when he says, "Look, d- did the music influence you?" 86% of people deny flat out the music had any effect at all.

    10. CW

      (laughs)

    11. RS

      ... now that, I think if you're a marketer, if you ta- actually, if you change one thing from this podcast, it should be based on that experiment, which is be very, very careful about taking customers' claims at face value. You know, 'cause if you run that test and then a- or, you know, or, or you were thinking about th- running that test and did what most marketers do, which is survey people and then, you know, listen to the survey results, if you went and said, "Would the music, changing the music influence you?" Everyone says no, you don't bother doing it. So, if you're a marketer, be very skeptical about survey results, focus groups, directly asking people, and certainly be skeptical about taking those claims at face value, and instead, I would say, the thing to learn from psychology is this methodology of not listening to claims, but setting up these test and control experiments.

    12. CW

      Mm-hmm.

    13. RS

      It's a naturalistic, um, uh, experiment, you know, in the wine aisle, for example, if you're a wine brand, keep everything the same except for one variable, the music-

    14. CW

      Yeah.

    15. RS

      ... and then any difference in sales or whatever behavior you want, you attribute back to that, uh, changed variable. That's a far better way to unearthing genuine motivations.

    16. CW

      Daniel Kahneman talks about this a lot, that we don't, we don't know our own biases, right?

    17. RS

      Yeah.

    18. CW

      We d- we haven't got a clue about our own motivations for doing particular things. Um, w- you mentioned about alcohol in supermarkets. I haven't seen this in the UK, but I was recently in America, and in America, they have bars from, like, a pub not that far behind the fruit and veg aisle. So you hit fruit and veg, then you hit a bar-

    19. RS

      (laughs) Yeah.

    20. CW

      ... and then you hit, like, bread.

    21. RS

      Yeah.

    22. CW

      And the number of dads that I'd seen that were there who'd obviously said to their partners, "Right, don't worry, don't worry, darling, I'll, uh, I'll, I'll take the kids for-

    23. RS

      (laughs)

    24. CW

      ... I'll take the kids for this one." "Are you sure?"

    25. RS

      Yeah.

    26. CW

      "Are you sure? You've worked all week." "No, no, no, no, no, don't worry, don't worry."

    27. RS

      Yeah.

    28. CW

      And then one of the, one of the trolleys (laughs) , oh my God-

    29. RS

      (laughs) It's-

    30. CW

      There's this trolley, right, and it's double child seat thing-

  11. 1:02:15 – 1:10:27

    Closing rapid-fire examples: extreme price framing, pickpockets, and Caesar’s ‘Veblen’ ransom

    1. RS

      Um, the... I think, I think (laughs) the best example I've seen recently, uh... And maybe we'll have to stick an image up here, 'cause my description's not gonna be-

    2. CW

      Video video ID and all, all sort that out.

    3. RS

      Yeah, video, yeah. (laughs)

    4. CW

      Yeah.

    5. RS

      Uh, I saw, I can't remember who did it, unfortunately, and I do like to try and credit people, 'cause it's not fair to, uh, not mention, but there was a wonderful tweet recently where someone had ch- taken a photo, um, of a sign in a, in a, in a little corner shop. And it essentially said, "Durex condoms, $5."

    6. CW

      Hmm.

    7. RS

      Oh, sorry, "Trojan condoms, $5. Uh, Huggies, $22." Now, I think that's the-

    8. CW

      (laughs)

    9. RS

      ... most usage of price relativity I've ever seen. Uh, don't compare yourself to Durex, compare yourself to Huggies, and suddenly, uh, you look, look much cheaper.

    10. CW

      You got the downstream implications.

    11. RS

      Let's see how... I'll, I'll take, I'll take that one out and-

    12. CW

      That's good.

    13. RS

      ... and instead

    14. NA

      (laughs)

    15. CW

      ... there's a, there's a... I saw recently on your Twitter, the one about, um, "Beware, pickpockets operate in this area."

    16. RS

      It was Paul Craven. Um, does this wonderful talk at Nudge Stock where he said, "Look, people assume communications work rationally." So you put up a sign saying, "Beware, pickpockets operate in this area." Surely we've now communicated the information this is a danger, has area, um, pickpocketing rates should drop. What he says is that that actually tends to backfire, because when people see that sign, their automatic response is without thinking to straightaway, you know, tap their pockets to make sure ... (laughs)

    17. CW

      All of the valuable areas of their body.

    18. RS

      If you're a pickpocket, what are you gonna do?

    19. CW

      (laughs)

    20. RS

      You gonna stand by that sign-

    21. CW

      Yeah.

    22. RS

      ... look at that sign, "Oh, thank you very much. You've just identified where your wallet is, I'll be having that." Yeah.

    23. CW

      Wow. Well-

    24. RS

      Yeah.

    25. CW

      ... m- I recently went to Barcelona and one of the guys that I was with fell asleep in Barcelona train station after a bit of a heavy night. Now, Barcelona is the pickpocket capital of Europe, apparently. I didn't know. But he found that out when he woke up to notice his phone, wallet and shoes had been taken.

    26. RS

      (laughs)

    27. CW

      Shoes taken-

    28. RS

      That's ... (laughs)

    29. CW

      ... from his feet.

    30. RS

      That's just a master pickpocket.

Episode duration: 1:10:27

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