I would be surprised if you haven't heard the words 'behavioural economics' banded about over the last six months. Rory Sutherland has made it the cornerstone of his IPA presidency, and with Thaler and Sunstein the writers du jour, it is undeniably the hot topic.
I went to 44 Club talk back in June where Sutherland and Matthew Taylor from the RSA introduced behavioural theory and it's implications for advertising. I remember being massively impressed and incredibly excited by the possibility, and have kept an eye on the project as it evolves.
On Wednesday night, the 44 Club held another event, billed as examples of practical application of the theory. I have mixed feelings about the night. One one hand I came away feeling that behavioural economics is a fancy name for best practice advertising thinking (that is already going on), and on the other, armed with some interesting examples of human nature. For example, one of the practical examples of choice architecture is that choice and availability has more of an impact on preference than taste, a fact that is the driving force behind brands wanting to be the shelf of every supermarket in the land, but not a particularly new thought. Some of the advice was 'don't rip people off because they won't come back' and see people as smart, not stupid, i.e. respect the fact that they just bought something 'because I did...' - things that we as an industry should never be doing anyway.
Sutherland feels that behavioural economics is so timely because as an industry the time we spend marketing things with a relatively low behavioural element (FMCGs) is falling, and we are increasingly being asked to step up to challenges with a high behavioural element, for example, getting people to switch to Streetcar.
While I realise he wasn't being completely serious, in part of Sutherland's set up he enthused about how behavioural economics could provide our industry with a set of impressive jargon (this did spring to mind). Maybe I'm just young and naïve, but shouldn't we be looking for new ways to genuinely understand people and what influences decisions rather than a rationale to impress our clients with?
Anyway, the key take out was probably that context is more powerful than preference. And also that as a species we're bloody good at post-rationalising things. The likely consequence of a decision has little bearing on what decision we make, i.e. we don't act rationally, but we use rational reasons to justify our actions in hindsight. Isn't that part of the role of advertising, to provide the rational reason as to why we bought/did something?
As I said before there was some stuff that I liked/found useful:
- That it might be a better idea to study the market/competition in detail rather than knowing your brand inside out because that's how consumers see it
- Teens eat at Pizza Hut, etc, because they know what's going to happen and therefore avoid embarrassment
- That the power of massive brands such as Ford, M&S is actually a license to innovate. Gave the sad example that Britain has 9% of Europe's population but eats 50% (?) of its ready meals, which was down to M&S offering them and making it acceptable
- The idea that we should be challenging metrics (again, something that we should be doing anyway). I liked the idea that trains are being made more punctual because that's what customer research says, but things like wi-fi aren't considered because noone says it
A lot of the examples being given fall under the umbrella of product development and design, i.e. making forms easier to fill in, or making the last pills of a course of antibiotics blue so that patients finish it ("take the 4 white ones, followed by the 3 blue ones"). Weren't advertisers traditionally more involved with NPD back in the day? The ideas of branded utility/service marketing show that we are headed back that way.
It's beginning to feel that behavioural economics might just be a neat wrapper for the theory and practice that already makes good advertising, and that we will just be hearing the same speech in various guises over the coming year. This may be an unfair criticism at this early point in the IPA's exploration into the theory - the IPA's BETT (Beahvioural Economics Think Tank) is planning to work on some live briefs over the next two years - but I couldn't help but feel underwhelmed. I hope I'm proven wrong.
In the meantime, the IPA have made a PDF of their thinking up to date, which will bring you up to speed with where BETT are up to in their thinking: Download BE_short_FINAL_Animated