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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 – 15:00

    The big interest for…

    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. CW

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

    3. RS

      Hi. Good to meet you, Chris.

    4. 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?

    5. 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.

    6. CW

      (laughs)

    7. 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."

    8. CW

      Mm-hmm.

    9. RS

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

    10. CW

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

    11. 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) -

    12. CW

      (laughs)

    13. RS

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

    14. CW

      Your company is a typo?

    15. 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)

    16. CW

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

    17. 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?

    18. CW

      Nope. Lay it on us.

    19. 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.

    20. CW

      That's-

    21. 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.

    22. CW

      What like?

    23. 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-

    24. CW

      (laughs)

    25. 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-

    26. CW

      Their frie- our, our fries suck.

    27. RS

      Yeah, yeah. Yeah (laughs) .

    28. CW

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

    29. 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.

    30. CW

      Mm-hmm.

  2. 15:00 – 30:00

    Yeah. …

    1. CW

      I know a person-

    2. RS

      Yeah.

    3. CW

      ... who knows a person, and this-

    4. RS

      Yeah.

    5. CW

      ... person is currently working in a city doing some financial stuff.

    6. RS

      Yeah.

    7. CW

      As a part of this thing, he provides spreadsheets, very advanced spreadsheets with VLookups and all sorts of other things to do, projections and forecasting-

    8. RS

      Yeah.

    9. CW

      ... that take into account a lot of very complicated variables. And what he's added into this spreadsheet is a macro that runs a loading bar. Now-

    10. RS

      Yeah.

    11. CW

      ... you'll never know because I've managed to keep-

    12. RS

      (laughs)

    13. CW

      ... him sufficiently anonymous.

    14. RS

      Yeah.

    15. CW

      But if you are the person that's being served this Excel sheet, let me tell you, that, that loading bar is always three and a half seconds long, no matter how much data goes through because-

    16. RS

      Yeah. Yeah.

    17. CW

      ... it's just-

    18. RS

      That's his, that's his-

    19. CW

      It's just an animation.

    20. RS

      Yeah.

    21. CW

      It's just an animation that-

    22. RS

      Yeah.

    23. CW

      ... he thought, "Well, if I add this in, it looks like I'm really fucking doing some, uh-"

    24. RS

      Yeah.

    25. CW

      "... like, crunching the numbers behind here." Meanwhile, his computer's like, having a tab. It's out the back.

    26. RS

      (laughs) Yeah.

    27. CW

      His processor's out the back just having a cigarette going, "Ah, we fucking finished three and a half minutes ago, three and a half seconds ago." Um, but yeah, that, you're totally right. I think, um, Rory Sutherland talks about, um, the difference between pick your own strawberries and cheap strawberries.

    28. RS

      Ooh, okay, go on. Yeah. I-

    29. CW

      So you can imagine the same thing-

    30. RS

      Yeah.

  3. 30:00 – 45:00

    Mm-hmm. …

    1. RS

      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-

    2. CW

      Mm-hmm.

    3. 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.

    4. CW

      Mm-hmm.

    5. 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."

    6. CW

      Mm-hmm.

    7. RS

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

    8. CW

      Mm-hmm.

    9. 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.

    10. CW

      Mm-hmm.

    11. 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.

    12. CW

      Mm-hmm.

    13. 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.

    14. CW

      Yeah.

    15. 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.

    16. CW

      Yeah. So...

    17. RS

      Mm-hmm.

    18. CW

      You're stranded on an island-

    19. RS

      Yep.

    20. 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.

    21. RS

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

    22. CW

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

    23. 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.

    24. CW

      Okay.

    25. RS

      It's... Yeah.

    26. CW

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

    27. RS

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

    28. CW

      Okay.

    29. 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-"

    30. CW

      Mm-hmm. Mm-hmm.

  4. 45:00 – 1:00:00

    Mm-hmm. …

    1. RS

      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-

    2. CW

      Mm-hmm.

    3. 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.

    4. CW

      I can't get over the name.

    5. RS

      Yeah. No, it just- (laughs)

    6. CW

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

    7. RS

      Yeah, well it was, it was discovered by academics, not marketers.

    8. CW

      Well, that's the thing. They, they just need to rebrand.

    9. RS

      Maybe, maybe they should have, uh... (laughs)

    10. CW

      Like, there are other markets.

    11. RS

      Sure.

    12. CW

      It's like, "Mate, we've come up with this thing. What do you think of-"

    13. RS

      Yeah.

    14. CW

      "What do you... Just, uh, hear me out. Hear me out. Just wait."

    15. RS

      (laughs)

    16. CW

      "What do we think of, uh, as a name, uh, s- 9 Enders?" He'd be like, "Right. Love the idea."

    17. RS

      (laughs)

    18. CW

      "Great. Just change the title out and we're, and we're sweet."

    19. RS

      Yeah, yeah. (laughs)

    20. CW

      "We're sweet." Um, yeah, I mean, uh-

    21. RS

      See, remember back to our very first chat, I've got no right to talk to anyone about naming.

    22. CW

      Yep, that's true.

    23. RS

      So... (laughs)

    24. CW

      That's very true. You got that wrong.

    25. RS

      It's 'cause obviously- (laughs)

    26. CW

      Yeah, exactly. It wasn't called, like, Astro Tenders though, was it?

    27. RS

      Yeah, yeah, yeah, yeah, yeah.

    28. CW

      (laughs)

    29. RS

      (laughs)

    30. CW

      Um, okay, so we've got those. We've got 9 Enders, we've got, uh, price, uh, cost relativity, and we've got, uh, the pratfall effect. What else is, what else is in, uh, on the, on the island?

  5. 1:00:00 – 1:10:27

    He's got fucking lemon…

    1. RS

      angled right. And so (...)

    2. CW

      He's got fucking lemon in his eyes-

    3. RS

      (laughs)

    4. CW

      ... that's why.

    5. RS

      Yeah, yeah.

    6. CW

      He's covered his face in lemon.

    7. RS

      So, they, uh, Dunning and Kruger read about this and they think, "Well, wait a minute. There is a massive vest interest in this person knowing their abilities accurately. So how can they be so deluded about their ability to rob a bank and get away with it?" And they began to wonder, "Is this..." Although, but that of course is a very, very extreme version, "Is that typical of other people?" So they begin by testing people. They give them grammar tests, I think logic tests, maths tests, get them to do these tests, note down where they've appeared from, you know, in, you know, let's say they get 100 people to do it, what, uh, percentage they've, uh, you know, they're ranked as. And then they get the people to estimate where they've appeared.... now, in general, people are overconfident. They think they're better than average. And now, everyone can't be better than average. But the key-

    8. CW

      (laughs)

    9. RS

      ... why it became known as the Dunning-Kruger effect, rather than just the bias of overconfidence, was, uh, they noted that people who were experts sometimes underestimate their abilities. When people were novices and pretty darn awful, they were ma- more like... Th- there was a bigger kind of, um, overestimate of their abilities. So it's a kind of idea that when you're really bad at something, you really do overestimate how good you are. So it became known as the Dunning-Kruger effect. Now, I think there's loads of fascinating implications for marketers about overconfidence, that too often great campaigns are jettisoned too early because people believe, "Well, I'm, I did a brilliant campaign, you know, 10 years ago, that's running out of juice, now I'm gonna do a-"

    10. CW

      Hmm.

    11. RS

      "... another great one." They overestimate their ability. But I think the main reason that one-

    12. CW

      (laughs)

    13. RS

      ... makes it the desert island is the, the MacArthur Wheelest- Wheeler story for me, I think is the-

    14. CW

      I know-

    15. RS

      ... the p- (laughs)

    16. CW

      ... I didn't know about the lemon juice thing.

    17. RS

      Yeah. Yeah.

    18. CW

      It's so good.

    19. RS

      (laughs)

    20. CW

      So we're going to-

    21. RS

      (laughs)

    22. CW

      We're gonna finish up shortly, Richard. Have you got any, any bits that you've seen recently, have you got one more little anecdote or one more little thing that you've got jotted down that you think would be a good way to finish, finish off the episode today?

    23. 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-

    24. CW

      Video video ID and all, all sort that out.

    25. RS

      Yeah, video, yeah. (laughs)

    26. CW

      Yeah.

    27. 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."

    28. CW

      Hmm.

    29. RS

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

    30. CW

      (laughs)

Episode duration: 1:10:27

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