the madmen. the wisemen.

 Richard Thaler, the American economist was awarded the Nobel Memorial Prize in Economic Sciences in 2017 for his contributions to behavioral economics, and in particular for his Nudge Theory. The Nudge theory (or nudge) is any aspect of the choice architecture that alters people’s behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. The a poster child example of a Nudge was a a fly painted on a men’s urinal, nudging them to aim correct. The idea understood human psychology (if you have something to aim at, people will aim) and created a small change in environment (the image of the fly painted on the urinal) to cause a behavioral change – that of aiming correct to reduce spills.

The world of advertising & communication has always been conscious of this truth, and has used it extremely well & with incredible creativity, often to build the brand with relevance & meaning in the lives of consumer ; and admittedly, at times to lure people into taking a certain decision.

An example of a brilliant brand building nudge is Alka Seltzer’s Plop, Plop, Fizz, Fizz campaign. While this nudge dates back before the formal rise of behavioral economics, Alka Seltzer’s slogan, “Plop, Plop, Fizz, Fizz” is a brilliant case of nudging consumers via advertising. The line “Plink Plink Fizz” was written at the bidding of a psychologist who suggested that, if you could create a social norm around using two Alka Seltzer tablets at a time, sales would double.

The Coca Cola Company distributed refrigerators to shops in remote areas of India & in areas that suffered the worst summers. Since Coca Cola products were the only cold / chilled drinks in these places – it nudged people to pick coca cola versus other brands that were also available but just not chilled. A brilliant nudge that drove Coca Cola’s consumption exponentially.

Other commonly used nudges include adding the label ‘most popular’ to the product marketers want to sell on their pricing page. Telling site visitors what other people have liked in the past, works in selling a product because as much as we believe that we are unique, we tend to like things that other people like. Amazon was one of the pioneers in the use of this nudge.  

Comparison is also a nudge that been used extensively in the world of advertising. In an ingenious exploitation of framing effects, one salesman sold Rolls-Royces at a yacht show. Seen alongside a $10 million yacht, a $500,000 car seems like a bargain. Restaurant owners often use the trick of having one very expensive item on the menu to increase the average value of dishes ordered, fully knowing that while the most expensive item of the list will never be chosen, the tendency to order the second most expensive item and order more increases when people feel that they have avoided buying the most expensive stuff on the list. 

Simplifying choices is another great nudge prompting action in an environment where people are burdened with just too much information.

Using numbers, using competitions, restricting options are some of the other ways that marketers try to game people’s choice architecture. As is the idea of using limited offers and timed discounts to nudge people to make a purchase. 

These are just few examples of nudges that the world of advertising uses most commonly.  While Behavioural Economics as a discipline has just walked into the spotlight, the Madmen (and women) of the advertising community have not just been aware of its potential all these years, but have also, actively used it to drive behavior change.

And now with programmatic, adv. serving has become almost a 100% addressable – making it one the biggest nudges ever to be felt by consumers. It, of course, needs a compelling idea for it to become an equally effective nudge. 

My prediction? The next big winner in the field of marketing & communications will not be the one with the latest technology – but one who can combine the new (technology) with the quintessential (human psychology) with creativity & ideas that move people. And the super engineers of today & tomorrow? Madmen (and women) powered by technology and rooted in Psychology.
  
References & Additional resources and examples
https://www.usimprints.com/blog/7-nudging-examples/
https://enginess.io/insights/5-examples-of-nudge
https://www.campaignlive.co.uk/article/why-advertising-needs-behavioural-economics/949585#ypWrWhSWwX1jbLLR.99
https://econsultancy.com/blog/67941-10-nudge-tastic-examples-of-persuasive-copywriting-from-charities/