Using behavioural economics to understand advertising impact

The ad industry is using behavioural economic thinking to help stop short-term, post-rationalism as demonstrated by the project Seen and Herd explains Kinetic’s Jennie Sallows.

Advertising influences behaviour. The scaremongers may point to subliminal messaging and mind control but the reality of how advertising can influence behaviour is far less controversial. A new research project, Seen and Herd, has proved how understanding behavioural economics can transform the influence of advertising.

Kinetic, the world’s biggest out-of-home (OOH) media specialist, has been exploring the relationship between behavioural economics and OOH advertising for more than two years. More recently, it joined forces with #ogilvychange, a behavioural science practice and part of Ogilvy & Mather, to create The Alfresco Labs, which aims to identify new ways to apply the theory to OOH media and guide marketers looking to deliver more effective campaigns and achieve better results.

The Alfresco Labs launched earlier this year with project Seen and Herd, a series of experiments conducted at Lakeside Shopping Centre, Essex. Using simple poster advertising, the experiments successfully influenced the movement of shoppers without their realising – and in one case increased footfall to a specific area of the centre by 75%.

It’s time to break the (social) rules

Social proofing describes the psychological phenomenon by which people simulate the actions of those around them in order to behave ‘correctly’ in a given situation. In project Seen and Herd, our mission was to encourage more people to visit the mall’s food court before noon.

Two slightly differing posters were developed: one of a woman eating a burger and another of a group of people sharing a pizza. Each poster had the same copy: ‘Who says lunch has to be after 12? Food court open at 11.’

During the test, the first poster increased footfall to the food court by 25%. The second, however, saw a staggering uplift to 75% – all by just applying a bit of behavioural economics theory.

The first poster used ‘injunctive norms’, the thought that humans are influenced by what others approve or disapprove of. In this case, the ‘norm’ was that a socially accepted lunchtime is after 12pm. The second poster overlaid ‘descriptive norms’, or the idea that we (and our actions) are influenced by what other people are doing.

The experiment proved both theories, that humans like to follow the crowd and seek approval from their peers – but in drawing attention to the social rule of lunch after 12pm, the poster drove shoppers to challenge it and boycott it.

Hindsight: what were they thinking?

Humans are prone to post-rationalising their actions. When people who had been exposed to the Seen and Herd posters were asked why they had visited the food court, they often post-rationalised and identified hunger as the driving force. Of course, we know that the posters subconsciously influenced the movement of these shoppers, but they didn’t make them feel hungrier. They just signalled that it was socially acceptable to hit the food court before noon.

When it comes to study design into the effect of advertising, post-rationalism can tend to overstate rational short-term factors like pricing, which isn’t good for a brand’s long-term profits. But what is interesting is that brand-led advertising campaigns can be tricky to pick up in terms of traditional research and econometric modelling techniques.

If you ask someone why they bought a product, they will often give a rational, product-based answer, and brands can therefore improve sales accordingly by making small variations like reducing the price, serving up a limited edition or an attractive one-off offer. This can lead to price-led and short-term decisions – which are not helpful to brands that want a longer-term branding strategy to understand the potential advertising impact.

Becoming one of the herd

The reason why the advertising industry is delving deeper into behavioural economic thinking is that it stops short-term post-rationalism and encourages the instinctive elements that branding and broadcast advertising lend themselves to. How many people really admit they bought a can of Coke because they love the TV campaign, for instance?

The Alfresco Labs is just one case of finding a way to turn ethnographic research and behavioural economics into a language that works for media and creative agencies, as well as proving that research is becoming core to the planning and decision-making process, not just a post-measure of success.

Seen and Herd proved why behavioural economics are desirable in a tangible way and that with a bit of planning, any marketer will be able to apply theory-led thinking to outdoor advertising to achieve impressive results.

Jennie Sallows is head of insight at Kinetic UK