Exploring the science of persuasion

Rory Sutherland on how behavioural economics, the main thrust of his IPA presidential agenda, has now met his ambition.

I had an uncanny feeling the other day. It was before a new-business meeting of some kind. It might have been a chemistry meeting.

Or a tissue session. Or a meeting to determine whether we moved from the longlist to the mid-list. Or that meeting to hear that "you're down to the last two, so we've brought along Fraulein Klebb from Regional Procurement".

Suddenly I realised what the unfamiliar feeling was. It was the pleasant sensation of being absolutely sure about something - that, along with our opinions, we had some incontestable knowledge to impart. I imagine doctors get that feeling all the time, the smug buggers. Lawyers, too. But in this business, you don't much. Aside from past precedent and case studies, most of what we do relies on assertion and intuition, hunches and hypotheses.

It's fun sometimes, but it gets bloody tiring - because you can never actually be right about anything. It's feels a bit like being married to a New Yorker.

So what behavioural economics provides is a welcome bit of hard-wearing, scientific underlay on which to roll out the creative carpet.

Now just a few caveats. Don't think that, in saying this, I am challenging the supremacy of the imagination. Absolutely not - remember, behavioural economics can only generate insights, not ideas. And don't assume I am discounting the value of taste or subjective judgment, either. This isn't a case of physics envy - it's more a case of architecture envy.

As Byron Sharp observes, even though much of what we do is necessarily creative and subjective, that is no less true of architecture as well.

Great architects are predominantly creative, but their ideas also have to be grounded in structural engineering. It's no use for a building to be handsome if it doesn't stand up.

We, too, could do with a bit more hard science. Leaving aside the splendid exception of the IPA's Effectiveness Awards, and the work of the late Andrew Ehrenberg, we are light on hard findings. Most other businesses are allied to an academic discipline of some kind. Marketing isn't. To be honest, fate hasn't been kind to us here. The two sciences that are closest to what we do - psychology and economics - have until recently been of little use. Economics was so preoccupied with demonstrating the purity of a rational, individualistic model of human behaviour that it viewed marketing as akin to a pollutant. If too mechanistic a model plagued economics, psychology suffered from the opposite affliction: until recently, the discipline was largely preoccupied with the question of whether or not you fancied your mum. Interesting in its way, but not much help in selling toothpaste.

Worse still, the one area of marketing science that has generally been viewed as impartial - the market research industry - has foisted on us a model of human behaviour that is sometimes useful but often fundamentally wrong. Traditional market research (there are very notable exceptions) has been wedded to an idea of human action where attitudinal change is a necessary and sufficient precursor to behavioural change. This needs to be challenged. For one thing, attitudinal change seems to follow behavioural change more often than it precedes it; moreover, it is not always necessary and it is rarely sufficient. Many research techniques are also based on memory tests and (as Damasio, Heath and others have shown) this neglects the role of low attention processing beneath the conscious radar. The opportunity costs that these wrong-headed approaches may have imposed on business are hard to assess. But it is scary to contemplate how many new products and ideas have been strangled at birth because of this imperfect model of human action at the heart of "marketing science".

It is only now, with the happy collision of these two very different disciplines, that we can say we have a proper science to call our own. With it, I truly believe, comes an opportunity for the industry to regain some of the influence it has lost, and to raise our game - from being interior designers to being architects, from fiddling with the soft furnishings to specifying the girders.

The only thing we have to beware of is a false dichotomy between what behavioural economics does and what great advertising can do. This, I think, is the mistake the Government has made in assuming that it no longer needs to spend money on advertising in the belief that behavioural economics can supplant it. This thinking is dangerously wrong-headed. In truth, behavioural economics no more competes with advertising than the Heathrow Express competes with British Airways. Yes, they both offer a form of transportation, but they do wildly different jobs - jobs that are complementary, not competitive.

For instance, it is true that choice architecture and the framing of choices has a huge effect on the choices people make - but only if those choices are first seen as socially acceptable and trustworthy. The only reason you can nudge people to consent to organ donation is because decades of communication (including advertising) have convinced people that this is a worthwhile thing to do.

Behavioural economics regularly provides intellectual vindication for things which advertising people instinctively believe, but which they have struggled to support scientifically ...

For instance, it provides a lucid case to take to retailers explaining why they should not introduce too many own-label products - since a plethora of low-cost variants can drag a whole category downmarket through the effect of price anchoring.

Behavioural economics also provides scientific backing for those who believe commercials should be likeable (pace Claude Hopkins, it seems people do buy from clowns). And it provides a potent scientific case for the idea of positioning: an idea such as The Fourth Emergency Service is shown to be all the more ingenious when you have read William Poundstone's book Priceless: The Hidden Psychology Of Value.

In short, advertising emerges with a great deal of credit when viewed through the lens of behavioural economics. Indeed, it was gratifying to see Professor Richard Thaler lavishing great praise on agency work that successfully reframes our thinking towards particular behaviours: Volkswagen's "fun theory", for instance, or Sussex's "embrace life" seatbelt ad.

Where there is a failing, it is that our conventional marketing model treats human preference as though it were eternally consistent and translates reliably into behaviour. The reality is that your sober beliefs on Friday translate imperfectly into your drunken behaviour on Saturday night. Contextual and social cues make a huge difference. Happily, digital media (and new tools such as TouchPoints) now provide agencies with abundant new opportunities to design and deliver such cues.

But the best vindication of agencies and agency people that has emerged through our various workshops and investigations over the past year is this: that, when presented with the insights generated by behavioural economics, agency people seem to be spectacularly good at capitalising on them by generating remarkable and fresh ideas (the plural is important - a behavioural approach allows you to have more than one big idea).

This is why I hope part of my legacy as the IPA president will include an industry partnership with a leading UK university in this area. A symbiotic relationship where academic findings are married to the world-leading idea-generation of UK agencies. And where we can take our imagination beyond usual areas such as messaging into new areas such as pricing, distribution, interface design and NPD.

If this partnership finally puts to rest the idea that scientific rigour is the enemy of true creativity, it will be a great result in itself. David Ogilvy got it right here: "They're not rules, you fools: they're tools."

Finally, perhaps, there's something to ward off Fraulein Klebb. A publication will be coming out in March featuring further case studies including an evaluation of 50 effectiveness winners from a behavioural economics perspective.

Rory Sutherland is the IPA president and the vice-chairman of Ogilvy Group UK.


How to stand out from the crowd

The BE challenge

Get behavioural economics to help position the Nissan Juke in a crowded market. The car is so "out there" that the concern was that customers would not work out what kind of vehicle it is.

The BE solution

The BE approach taught us that people are far more comfortable making comparisons, rather than making absolute judgments. So the Qashqai was used as a point of reference to position the car in the consumer's mind. Compact and bursting with energy, the Nissan Juke was introduced as the Qashqai's younger brother.

What difference is BE making to content?

The approach has been a resounding success. Consumers are able to position Juke within the Nissan crossover family. Without a test drive and without so much as seeing one in a showroom, the orders have been rolling in. By launch date, sales had exceeded their target by 300 per cent.

What difference is BE making to client/agency relationships?

"Nissan GB constantly demands thought leadership from all of its agencies. BE is a clear example of how smart thinking at the marketing zeitgeist can make an immediate impact to the bottom line.

"BE taught us everything is relative. So we compared the new Nissan Juke to a success, the Nissan Qashqai. Like the Qashqai, Juke is designed for urban living. With more energy and positioned at a younger audience, the compact Juke connected with consumers immediately." - Andy Jackson, online marketing manager, Nissan GB

Is BE creating a new income stream for agencies?

"At Digitas London, we have three live projects (across different clients) that draw on BE. Would these projects have gone ahead irrespective of BE? Yes, they would, but BE has demonstrably increased their scope and is, therefore, offering us increased revenue potential." - Paul McCarroll, head of copy, Digitas London


How to get young professionals to save more for the future

The BE challenge

Young earners are interested in making plans for the future. The problem comes in getting them to actually do something about it. The objective was to get them to stop delaying, and start deciding.

The BE solution

The role facts play in decision-making was explored: how "intelligent defaults" and "choice architecture" can bring decisions down to a few variables, such as level of risk and potential for growth.

Product benefits like automatic indexation were highlighted with tools to show how contributions made now will add up to more than the same payments made in later years.

What difference is BE making to content?

Feedback from user tests have been positive. It's early days, and supporting data won't be provided until the site launches. But this behaviour-led approach is already informing product development in an organisation that's facing an increasing demand to sell direct to the public.

What difference is BE making to client/agency relationships?

"Standard Life engaged Dare at the end of 2009 largely for its strategic thinking in communications. And that was important last year in helping us to deliver an effective, on-brand user experience. The recommendations have challenged us, and we've followed through on many ideas. Others we've had to put on hold for the time being.

"As we start to see the business results from these recommendations, we'll be able to give more support to the discipline. I hope to see a time when behavioural economics will play a key role in our user experiences." - Amjid Rasool, head of user experience, Standard Life

Is BE creating a new income stream for agencies?

"BE is integral to our experience planning offer for Standard Life. For other clients, it is often a separate cost." - Mark Bell, head of information architecture, Dare


How to get more people to make a quit attempt - and stick with it

The BE challenge

Years of social pressure and some great communication campaigns mean that the majority of smokers want to stop.

What no-one wants is to go through the process of quitting, which is physically and emotionally very tough. Many have had experience of trying and failing.

The BE solution

We used a range of learning from behavioural theory to make the process of quitting feel easier. We launched a new product, the Quit Kit, and positioned it as a tool for getting a job done, rather than a crutch to overcome a weakness. It's packed with ideas, tips and tools to help a quitter's willpower.

What difference is BE making to content?

The Quit Kit launch led to a step-change in results for the NHS:

- Orders for NHS support increased by 500 per cent - from 80,000 in 2009 to 488,000 in 2010.

- Quit Kit users made 288,000 quit attempts, 40 per cent by people who had never previously considered NHS support.

- Market share for the NHS increased by 43 per cent, penetration by 6.3 percentage points.

- Cost efficiency increased by 370 per cent - with CPR decreasing from £53 in 2009 to £19 in Jan-March 2010 with the introduction of Quit Kit.

What difference is BE making to client/agency relationships?

"The application of behavioural theory was critical to the success of Quit Kit. We've been working with Engine Decisions and academics to develop ideas for other areas of public health." - Dan Metcalfe, deputy director of strategy, Department of Health

Is BE creating a new income stream for agencies?

"We built our knowledge of applying behavioural theory to real problems through our public sector work. With the launch of Engine Decisions, our behavioural theory unit, we are applying that to private sector clients." - Alison Wright, strategy director, Engine.