Can you trick people into improving their lives? A behavioral economics professor is banking on it

 

Whether personal or professional, change is hard. And the cumulative data is not on our side.

Take something obviously detrimental, like smoking. A mere 4% to 7% of people successfully quit without the aid of medication or outside help. Even experiencing a traumatic event like the death of a loved one or being diagnosed with cancer only leads to a 20% success rate.

Not to be a killjoy, but as the Washington Post found, roughly 25% of New Year resolutions fall apart within the first two weeks. And even when it comes to our work where moneys on the line 70% of [management-led] transformation efforts fail.

So why is change such a struggle?

Dan Ariely, best-selling author of Predictably Irrational and professor of psychology and behavioral economics at Duke University, explains it like this:

Usually when people approach solving problems, they think, Lets just give people some information and then theyll make the right decision, he said.

As natural as this educational approach feels, it doesnt work. For example, posting caloric facts on the side of a Snickers bar does little to deter us when its 10 pm and the craving hits. Equally fruitless are traditional applications of so-called willpower.

Change, in Arielys words, comes not from the inside, but the outside. If you want people to lose weight, give them a smaller plate. You have to change the environment.

Today, our dominant environment is digital, which is why Arielys foundation The Center for Advanced Hindsight teamed up with Chris Ferguson, CEO of the Ontario-based design firm Bridgeable, and convened a three-day workshop last October with thirty different financial institutions from all parts of North America.

Their goal was to explore how technology could play a role in transforming borrowers into savers (i.e., positive social and personal change). However, dont let the financial scope fool you.

People are people and changing your own habits as well as designing apps and workflows for the good demand understanding how humans make decisions. So before digging into Ariely and Fergusons answer the one theyre banking on lets take a look at six psychological triggers that give us a fighting chance in the war on change.

Human decision making: 6 triggers for change

In his modern-day classic Influence, Robert B. Cialdini describes two models of human decision making. The first he calls controlled responding, a thorough analysis of all of the information. The second is known as “judgmental heuristics,” essentially “mental shortcuts,” also known as cognitive biases or “triggers” that allow for “simplified thinking.”

As much as we like to envision ourselves as controlled responders, human beings are far more prone to the second mode. In fact, prone is probably too light a word. The reality is, mental shortcuts run our lives: From the routes we drive, to the foods we eat, right down to the jobs and mates we choose.

Cialdini wasnt the first to notice this. Moneyball author Michael Lewis recent book, The Undoing Project, chronicles the multi-decade shift in both economics and psychology away from the thesis that humans are essentially rational creatures in cognitive control of their decisions. In its place, a new understanding of decision making has emerged, one in which heuristics, hardwired mechanisms, and triggers stand out.

For Ariely and Ferguson, six of these triggers bear special attention.

Default bias

In 2003, Eric J. Johnson and Daniel G. Goldstein discovered that the organ donation rate in two European countries Hungary and Denmark differed wildly. The first boasted 99.997% and the second, 4.25%. What explained this night and day difference?

Turns out, a box. Or rather, the language surrounding one box in particular. In Hungary, organ donation was the DMVs default option; its citizens had to opt out if they didnt want to participate. In Denmark, it was the opposite.

In other words, the easiest option is the automatic option and therefore whatever is framed as default usually wins.

Friction costs

People are easily deterred from taking action. We prefer the path of least resistance. And, of course, inertia doing nothing is always the easiest thing to do.

Friction costs refer to any obstacles or perceived speed bumps that complicate an action. Reducing friction costs has become a cornerstone of ecommerce giants like Amazon whove built empires around saving your payment and shipping information so that purchasing is as easy as one click.

But this also holds true interpersonally. One of the driving reasons people stay in unfulfilling relationships is that the cost of extricating themselves appears to outweigh the cost of one-off disturbances, despite the fact those one-off disturbances add up over time.

Anchoring

At the risk of stating the obvious, first impressions matter and not just in our personal lives.

When making decisions, people automatically elevate whatever information they encounter first, and anchoring means that this first impression isnt just more powerful than subsequent evidence, it also becomes the organizing principle (or, frame) thereafter.

For instance, if the first test in a job interview reveals an applicants strengths, then evaluators unthinkingly rate the applicant’s subsequent tests higher, even when they have little or nothing to do with the first. Humans latch onto first impressions, and letting go of them is harder than you think.

Pre-commitment

Consistency acting in accordance with our previous decisions and actions is a potent mental force. This is due partly to the fact that change is difficult (see Friction Costs). But it also stems from our desire to protect our egos as well as to simplify decision making.

In the 1960s, when two psychologists asked California homeowners to erect a public-service billboard on their front lawns reading, Drive Carefully, they were met with an average rejection rate of 83%. One subset, however, turned the tables on that average and complied to the request at 76%. Why? Because unbenounced to the two psychologists, one week earlier a separate organization had asked residents to place an unobtrusive Be a Safe Driver sign in their window.

Securing small, voluntary commitments is a cornerstone of any large and lasting change.

Present bias

Humans are myopic creatures. We live in the moment. Its not that we dont worry about the future or dwell on the past; fear and loss are the two most powerful human emotions. Its more that were terrible at projecting our current reality into whats going to happen next, especially when that next is five, ten, or even twenty years in the future.

Hyperbolic discounting turning a future positive into a present negative is one way of dragging those inevitabilities into the here and now.

Social proof

No man is an island, wrote John Donne. He was right. When it comes to making decisions especially decisions surrounded by high levels of mystery or insecurity we look to see what other people are doing.

The principle of social proof is why Yale University discovered that if you want people to reduce the amount of bottled water they consume, presenting facts about negative environmental impacts works best only when preceded by social proof that others have already started to behave pro-environmentally.

Each the above triggers, often called cognitive biases, work their way from outside in. Theyre extensions of Arielys basic contention that our best shot at change comes from our environment.

But can an app truly change human behavior?

Rigging the mind with an app

Naturally, the answer is yes.

As proof we need look no further than the plethora of examples Nir Eyal presented in Hooked: How to Build Habit-Forming Products. From social media platforms to free games like Candy Crush and Farmville, apps have the power to shape (and even reshape) our lives. In Eyals words: To build a habit-forming product, makers need to understand which user emotions may be tied to internal triggers and know how to leverage external triggers to drive the user to action.

The real question is: Can an app change human behavior for the good? After all, its one thing to hook someone with an app that delivers endorphins the way gambling or junk food does (neither of which Eyal argues for). Its another thing altogether to hook someone with an app aimed at changes we wat but struggle desperately to implement.

To answer that question, heres a sneak peek at Ariely and Fergusons current prototype and how theyre using the principles mentioned above.

Just remember: Each of these triggers are hardwired into the human mind. That means your own changes personal, professional, and technological should lean on them too.

 

Making good change easier

Its true: as humans, were terrible at change. But that doesn’t mean the fight is in vain.

Instead, the implications of behavioral economics alongside the broader sciences of human decision making weve touched on should push us in two directions.

First, on the personal front, change works from the outside in. If you want to lose weight, buy a smaller plate. We set ourselves up for success or failure not because of internal factors like willpower, motivation, and drive, but because of external factors. Lasting change isnt as much about moral fortitude as it is about arranging our environment the world we interact with to either trigger or inhibit our behaviors.

Second, on the professional front, products and services, apps and tools must all likewise adhere to the very same lessons. This applies to design and UX as much as it applies to marketing and management.

Whatever change youre trying to create whatever product youre trying to hook your audience begin with how humans actually make decisions:

1. Default Bias:
How can you make the opt-in process automatic? What can you pre-populate during onboarding or roll out

2. Friction Costs:
What can you remove? In the words of Nir Eyal, innovation is nothing more than understanding a series of tasks from intention to outcome and then removing steps.

3. Anchoring:
What do users, whether customers or employees, see first? How can you leverage that first impression at a meeting, in an email, or within an app to frame the rest of the process

4. Pre-Commitment:
Are you building on small, voluntary commitments? Small yeses early on lead directly to big yeses later, especially as change gets tougher

5. Present Bias:
How can you drag future results into present reality? What hell will your change save people from? What heaven will it deliver them unto?

6. Social Proof:
Who do your users look to for making their decisions? How can you encourage those influencers, or even just fellow humans, to share their own commitment and actions?
Unlocking human change is hard, but its not mysterious. Just be sure youre using all that power for the good.

 
 

Aaron Orendorff is the founder of iconiContent and a regular contributor at Entrepreneur, Lifehacker, Fast Company, Business Insider and more. Connect with him about content marketing (and bunnies) on Facebook or Twitter.

Read more: http://mashable.com/2016/12/31/app-change-human-behavior-economics/

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5 Tips for your Online Marketing Strategy

Online marketing is an incredibly strong tool that nearly every company can benefit from. Online marketing will help you to reach consumers that you would be unable to reach through normal marketing means. It can help you to increase your image, increase the interest in your company, and increase the traffic to your company.

With that being said, online marketing is more than a web ad and an email to a database. Online marketing covers multiple venues and tactics, spanning across the web to provide you with a winning strategy. If you want to have successful online marketing you need to plan out this online marketing strategy.

These five tips will help you to plan out your own strategy. They will help to bring together a cohesive marketing strategy that will be as efficient and effective as possible.

Speak Clearly

You need to make sure that your online marketing tactics speak clearly and concisely. You need to effectively communicate your message to the masses; this means that they can easily understand the message that you are trying to get across. Think about what you are trying to say to your audience and say that in the clearest way possible.

Know your Target

You need to make sure that you understand everything that there is to know about your target market. You want to know how they operate to understand exactly how to market to them. If you do not know your target, you will not be able to effectively reach them with your marketing strategy.

Know your Options

Every good marketing strategy will completely exhaust available marketing options. You need to know your various options, and need to work to understand which of these various options will work for your company.

Work Cohesively

A marketing strategy needs to execute materials that are cohesive. Cohesive marketing tactics will help to create a campaign, making your Internet marketing as effective as possible. Keep the same tone in your writing style and the same design style to create a cohesive look.

Follow Up

In the end, you need to make sure that your online marketing efforts were successful. You need to follow up with your strategy, analyzing your tactics and methods after the marketing campaign is carried out. This will help you to understand whether or not you need to tweak, change, or completely end your online marketing campaign.

These tips make it easy for you to plan out all of the intricate details of your online marketing strategy. They will help you to understand how to speak to your audience, how to narrow in on your audience, and how to bring together an entire strategy. This cohesive campaign and strategy will help to keep your business on track as it reaps the benefits of online marketing.

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The Importance of Internet Marketing – Do It Right or Die

In today’s world it is easy to underestimate the importance of internet marketing. Advertising and communications are everywhere, and people can forget how delicate a process marketing can be. To get the full benefit of internet marketing, you need to make sure that you understand how to use it in the right ways.

Do Your Research

Researching your internet marketing strategy cannot be stressed enough. You need to know what it is and how you can use it to your advantage. Most importantly, you need to know how your competitors are using it to their advantage. Only then will you be able to grasp the importance of internet marketing and be able to use it to its fullest extent.

There are many places where you can learn about internet marketing. Lots of books are released on the subject every year and there are even periodicals devoted to it. Finally, you can look around online for information as long as you are careful about the websites you get your information from.

Doing it Right

By investing time in research, you can learn various very effective ways of implementing marketing strategies online. Some people really don’t think there is a right or wrong way to market online, but this simply isn’t true. There are the basics, such as having good grammar and a captivating ad campaign, but it goes beyond that.

One thing you need to think about is that you can’t just stick the online equivalent of a brochure up and think that is marketing. Maybe that is part of it, but it isn’t going to cut it overall. The importance of internet marketing lies in the ability to really communicate with your potential customers in ways that cannot be done with off-line advertising.

You need to know what internet marketing is capable of before you get too far into it. Only then will you be able to do it right and get the very best results possible.

Continue to Grow Your Marketing

As with other types of advertising, you need to constantly shift and change your online marketing. People easily become bored with seeing the same campaign over and over. They get inured to certain things over time. So you need to be ready to change up your marketing.

This is another aspect of the importance of internet marketing that many people overlook. Just like your business, if your marketing doesn’t change and keep up with the times, it will fail. To keep this from happening, keep your eye on popular shifts in advertising and communicating. Also make sure that you watch your client feedback carefully when you make changes in your marketing. If you don’t you could miss crucial fluctuations in your sales or visitors.

By understanding the importance of internet marketing, you will put yourself in a better position for success. Read up on internet marketing and the trends that it goes though so you can anticipate changes. Also make sure you are using the internet to its fullest advantage. By doing this, you will make it more likely that your business will end up on top.

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How Important are Autoresponders to Internet

Marketing?

Internet Marketing and autoresponders essentially

go hand-in-hand. In today’s online business world,

you simply cannot succeed at Internet marketing

without the use of autoresponders. Autoresponders

are used to achieve many of the marketing tasks

that are essential to a successful online business.

Internet marketing can be very time consuming.

Whether you do affiliate marketing or market your

own products, an autoresponder is a big part of your

marketing arsenal. Autoresponders are used to keep

in contact with your past customers, and to develop

a relationship with potential customers.

An autoresponder can be used to deliver sales

messages to your opt-in customer list. It can be

used to deliver email courses, to send reminders,

and even to help you build an opt-in list if you don’t

already have one. There are many creative ways you

can use your autoresponder to make more sales and

to build customer relations.

Any successful marketer will tell you that there are

two tools that are vital to any type of online

marketing ? an opt-in list and an autoresponder. In

fact, most marketers will agree that you could take

away all of their other marketing tools, but they

would fight to the death to keep the list and the

autoresponder!

(word count 204)

PPPPP

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How to Advance your Business: Home Internet Marketing Promotion

Internet marketing is one of the newest tools that businesses are using to get ahead. Internet marketing helps you to reach as many different people as possible, allowing your company to advance, improve, and grow.

This type of marketing is marketing that you can easily handle from the comfort of your own home. Business home Internet marketing promotion is something that every website owner and business owner can handle.

There are plenty of issues to consider when thinking about home Internet marketing. This information will help you to understand how Internet marketing can advance your business, and will teach you how to approach Internet marketing for your company.

Getting the Most out of Internet Marketing

It is important for you to get the most out of your Internet marketing endeavors. This means that you need to take the time to research what you can do with Internet marketing; this research will help you to understand what Internet marketing can do for your company.

This also means that you need to consider a full marketing campaign. Many find that they get the most out of Internet marketing when they have an entire cohesive campaign that covers multiple Internet marketing mediums.

Finding a Professional

For many, the only way to get the most out of Internet marketing is through a professional. Professionals will help you to create the Internet marketing campaign that is going to be successful. They will help you to narrow down your target market, and will help you to communicate directly to that target market. They will also help you to develop the visual aspects of your marketing campaign and the copy (words) aspect of your campaign.

Opening Up your Possibilities

If you want to advance your business you need to consider possibilities that you may not have considered on your own. You need to open up to the possibilities of Internet marketing, including different mediums that you may not have considered. Internet advertisements, search engine optimization, and emails are just a few of the different Internet marketing tactics that your company can benefit from.

Enjoying the Low Cost

Luckily, Internet marketing has a low cost when compared to other forms of marketing and advertising. This low cost allows your company to get maximum exposure and efficiency for a reasonable price.

It is important for you to open up your mind to the vast world of Internet marketing. Your company may easily benefit from multiple Internet marketing techniques and venues. Take the time to understand how you can benefit from these different techniques, and how you can implement these various techniques.

Whether you attempt to handle business home Internet marketing promotion on your own or hire a professional, you should consider Internet marketing. It will give your business the chance to succeed and grow.

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E-MAIL MARKETING

Technology with its advent has taken a toll even in the field of marketing at last. E-mail also known as electronic mail, is now turning out as an indispensable medium of marketing on internet.

Internet as whole has a wide marketing area because of the fact that it is spread whole and wide over the whole word. This makes it accessible to almost every country and eventually to the people in the country. E-mails are very techno-savvy and more effective and fast. This is the reason that we can now see e-mails developing as an indispensable media of marketing.

Over the years people and corporate houses have started realizing the advantages of e-mail marketing. E-mail marketing carries a lot of advantages along with it. Some of the benefits are:

a) Speed:

This is the main factor as to why e-mail marketing is considered better and over the other Medias of marketing. E-mail marketing along with it brings the advantage of high speed. E-mail marketing has a very high speed of information transfer. It just takes a second for the person to transfer information from his working place to the internet worldwide, where everyone can view it worldwide.

b) Reach:

One another factor as to why e-mail marketing is considered a better option is because of the fact that it has a better reach to the people worldwide than the other medias of marketing. E-mail marketing knows no boundaries and this helps the people to continue or conduct their marketing work in larger scale. The higher reach of e-mail marketing, attracts more people towards it and thereby assists the whole marketing process.

c) Inexpensive:

E-mail marketing is comparatively much and more cheap than that of the other medias of marketing. The people do not have to incur any special or extra cost to market their product or point of view. Being inexpensive it suits the people and they thereby resort to e-mail marketing than the other Medias.

d) Effective:

E-mail marketing is very effective than the other medias of marketing. The reason being, that they are very techno-savvy, very fast and still pretty cost effective. This whole package makes e-mail marketing very cheap and pretty attractive. This is the reason that e-mail marketing is pretty effective and thus more approachable.

e) Personalized marketing:

E-mail marketing avails the people the opportunity to avail and conduct personalized marketing. In this the people can send mails only to people whom they think that they would be interested in it. In this the mails will only be forwarded to people on whom the concern is interested.

Thus we see that why and how e-mail marketing has turned out to be an indispensable tool in marketing

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Social Media Marketing Workbook: 2016 Edition – How to Use Social Media for Business Reviews

Social Media Marketing Workbook: 2016 Edition – How to Use Social Media for Business

Social Media Marketing Workbook: 2016 Edition - How to Use Social Media for Business

Social Media Marketing Workbook 2016 UPDATED: July, 2016 Learn how to market your business on Social Media for free! A best-selling social media marketing book from a best-selling author on Internet marketing: Jason McDonald Social media is big – really big. Facebook has over 1 billion users, and LinkedIn has over 350 million. Today’s customers go online to review sites like Yelp and Google+ to check out businesses before they engage. Whether it’s on Twitter, on Instagram, on YouTube, or e

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Related Marketing Products

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10 Hilarious Examples Of False Advertising

Description:
When you have to sell a product, you will take whatever measures needed to make sure that advertising is memorable and makes sales. If your product is mediocre, then you really have to do what you can to ensure that people will buy your product. If you can’t sell the product using television ads or put in any more money to make sure that your product is of the highest quality, then you need to do what you can to sell it. Yes, it may end up making many people mad, and could end up in some returns, but you’ll count on the fact that most people don’t want to bother with the hassle.
What is described here is the trend of false advertising. False advertising can range from “bait and switch” to completely lying about what product is inside the package. While it is extremely risky to conduct business in that matter, there is sure to be trouble and public humiliation on the internet. When the customer sees what’s on the box, they expect to receive the product that’s on the box. The same goes for dating profiles, when a suitor is trying to find a date, and they will portray themselves in a certain light so that they are more appealing. In this video are ten hilarious examples of false advertising. Whether it is receiving a completely different product, or the ad portrays something too big but it’s really too small, these advertisements don’t portray the real deal.
Companies will do whatever it takes to land a sale, even if it means stretching the truth about the quality of their product. From toys arriving too small to getting a completely different product, here are 10 hilarious examples of false advertising.

 

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Product Placement Guide 2016

Emergence and Significance of Product Plасеmеnt and Branded Entеrtаіnmеnt
Sublіmіnаl advertising has been declared dead, is аlіvе and doing wеll – mау bе nоt оvеrtlу, but іn unique wауѕ to reach the consumer іn thе fоrm оf рrоduсt placements and brаndеd еntеrtаіnmеnt. Evеn a casual lооk аt tоdау’ѕ film оr television соntеnt amply ѕhоwѕ аn аrrау оf product placements ѕоmе vеrу ѕubtlе and оthеrѕ overstepping the lіnе separating аdvеrtіѕіng and factual media соntеnt in order tо ѕеll рrоduсtѕ, ideas, and ѕеrvісеѕ. Why is іt ѕublіmіnаl? Because our brаіn fіltеrѕ thаt nоrmаllу wееd оut оvеrt аdvеrtіѕіng messages from mеdіа programming, don’t step іn tо blосk thеѕе соvеrtlу рlасеd рrоduсt рlасеmеntѕ аnd thеіr buіlt-іn mеаnіngѕ and mеѕѕаgеѕ. It ѕіmрlу rеgіѕtеrѕ іntо thе соnѕumеr’ѕ ѕubсоnѕсіоuѕ.

Both tеlеvіѕіоn and fіlmѕ аrе rіfе wіth examples. Anyone mіѕѕ оut on thе Cоса Cola Tumbler on thе judges tаblеѕ on the American Idоl television show? I don’t thіnk ѕо. Thе nеw Jаmеѕ Bоnd fіlm CаѕіnоRоуаlе, расkѕ mоrе than іtѕ fаіr ѕhаrе of product placements from аutоmоbіlеѕ (Fоrd) tо brаndеd airlines (Vіrgіn Airways). It’s еvеn mоrе іntеrеѕtіng how the соnсерt оf рrоduсt placements hаѕ bееn extended in thіѕ movie. There’s a person рlасеmеnt! A person that ѕublіmіnаllу gеtѕ аѕѕосіаtеd tо Vіrgіn Airways. Thіѕ іѕ nоnе оthеr than Virgin Chаіrmаn, Rісhаrd Branson – a brand icon – himself. If уоu observe сlоѕеlу the раrtісulаr scene ѕеt іn Miami аіrроrt, thеrе’ѕ Virgin Chаіrmаn Sіr Rісhаrd Brаnѕоn іn thе ѕесurіtу сhесk lіnе, fоllоwеd a few ѕесоndѕ lаtеr by the ѕhоt of a Vіrgіn jet lаndіng.

Coincidental, уоu say. Not according to ѕоurсеѕ. CаѕіnоRоуаlе рrоduсеr Bаrbаrа Brocolli ѕеt uр a dеаl wіth Virgin thаt included a рlаnе for thе airport ѕсеnе, wіth thе jеt, thе crew for оvеr three days оf fіlmіng. In rеturn, аlоng wіth ѕоmе рrоmоtіоnаl tіе-іnѕ wіth CаѕіnоRоуаlе, thе producers оffеrеd tо ѕtісk Branson аnd his ѕоn іn the fіlm for fun as thаnkѕ. Thе cost tо Vіrgіn fоr thіѕ nоn-раіd рrоduсt placement- an fеw hundrеd thousand роundѕ!

Mаrkеtеrѕ аrе іnсrеаѕіnglу uѕіng рrоduсt placement tесhnіԛuеѕ tо reach соnѕumеrѕ аѕ nеw tесhnоlоgу аnd аn expanding range оf mеdіа орtіоnѕ makes соnvеntіоnаl аdvеrtіѕіng a lеѕѕ fеаѕіblе wау to рrоmоtе brands and іdеаѕ. Bе it television or fіlmѕ, рrоduсt рlасеmеntѕ саn bе uѕеd tо reach a mаѕѕ audience or аѕ part of tаіlоrеd саmраіgnѕ targeting specific аudіеnсеѕ. Whіlе сrіtісѕ mау blаmе рrоduсt рlасеmеnt mаrkеtіng fоr blurrіng the lіnе bеtwееn rеаlіtу аnd mеdіа content, thе асtuаl world оf рrоduсt рlасеmеnt marketing, both раіd аnd nоn-раіd fоrmѕ, is thriving. According to a 2005 PQ Media rероrt, paid рrоduсt рlасеmеnt ѕреnd glоbаllу (thіѕ оbvіоuѕlу dоеѕ nоt іnсludе all thе non-paid product placement costs, figures for whісh are nоt аvаіlаblе thаt easily) stood at $2.2 billion, wіth Unіtеd Stаtеѕ product placements accounting fоr оvеr twо-thіrdѕ оr about $1.5 billion. Nоt ѕurрrіѕіnglу, Thе PQ Mеdіа rероrt рrоjесtѕ thеѕе numbеrѕ tо grow ѕіgnіfісаntlу wоrld-wіdе tо аrоund $7.5 billion bу 2010, аgаіn wіth the US taking a lead.

In the fast еmеrgіng mаrkеtѕ, nоtаblу India and China – thе usage оf product placements аnd brаndеd entertainment has seen аn еxрlоѕіоn. Thе ѕаmе PQ Media Rероrt lіѕtѕ Indіа’ѕ overall рrоduсt рlасеmеnt ѕреnd аѕ thе fіfth іn glоbаl рrоduсt рlасеmеnt rаnkіngѕ аnd рrеdісtѕ a ѕtrоng growth matching the USA оvеr the nеxt thrее-fоur уеаrѕ. Thе іnflux of рrоduсt рlасеmеnt іn Indіа hаѕ bееn ѕо рhеnоmеnаl that Bollywood hаѕ еmbrасеd brаndеd еntеrtаіnmеnt’ѕ rоlе and hаѕ ѕеt about finalizing huge fіnаnсіаl dеаlѕ fоr mаrkеtіng tie-ups wіth lеаdіng product marketers lіkе Rееbоk, Sony, еtс.

Hоw does strategically іnduсtеd рrоduсt placements оr branded entertainment in thе Hollywood’s CаѕіnоRоуаlе and Bоllуwооd’ѕ Gоаl hеlр Virgin Aіrwауѕ аnd the Reebok brand rеѕресtіvеlу? Dоеѕ thе реrѕоn (Branson) placement and the brаnd (Vіrgіn) рlасеmеnt hеlр tо a hіghеr propensity оf a аіr trаvеlеr to bооk hіѕ or hеr tісkеt thе next tіmе on Vіrgіn Aіrwауѕ? Dоеѕ John Abrаhаm’ѕ wеаrіng Rееbоk brаnd іnсrеаѕе Rееbоk ѕаlеѕ іn India? Or for thаt mаttеr, from any lеаd character оn аnу television ѕhоw that ѕірѕ and еnjоуѕ Stаrbuсkѕ соffее – wіll this result іn a nоtаblе rise in соnѕumеrѕ slurping down Stаrbuсkѕ? It should ассоrdіng to mаrkеtеrѕ, bесаuѕе, Brаnѕоn’ѕ flееtіng appearance hеlреd сrеаtе a ѕublіmіnаl association with Virgin аnd hіѕ еntrерrеnеurіаl airlines and a орроrtunіtу for ‘реорlе’ tо tаlk it up; thе exact rеаѕоn why Vіrgіn loaned іtѕ rеѕоurсеѕ to Brосоllі іn thе first рlасе. And іn the case оf Indіа’ѕ movie Goal, thе ѕuрроѕіtіоn is thаt Rееbоkѕ ѕtrоng аѕѕосіаtіоn with ѕоссеr wіll rub оff оn thе mоvіе аnd thаt vіеwеrѕ wіll line uр at Rееbоk stores in Indіа!

Whіlе ѕubtlу рlасіng product рlасеmеntѕ may be аn аррrоасh, thе ultimate gоаl іѕ unԛuеѕtіоnаblу сrеаtіng a perception аmоng viewers that wіll hеlр іnсrеаѕе thе product’s bottom line. It іѕ this еnd іn view thаt drіvеѕ product placement and branded еntеrtаіnmеnt – thе nееd tо іnсrеаѕе a brand’s соnѕіdеrаtіоn аnd оріnіоn from juѕt a simple brаnd awareness. If іn thе рrосеѕѕ, one nееdѕ ѕublіmіnаl tасtісѕ, thе product рlасеmеnt аnd brаndеd еntеrtаіnmеnt guruѕ hаvе a full аrѕеnаl аt thеіr disposal they can utіlіzе!
Uѕеѕ and Advаntаgеѕ оf Prоduсt Plасеmеnt

Prоduсt рlасеmеnt mаrkеtіng іѕ becoming еxtrеmеlу рорulаr tоdау because іt оffеrѕ many аdvаntаgеѕ tо аll раrtіеѕ іnvоlvеd. Brаndеd еntеrtаіnmеnt рrоmоtіоnѕ hаvе hеlреd mаnу соmраnіеѕ tо significantly іmрrоvе thеіr bottom lіnе, еѕресіаllу when linked tо mоvіеѕ with a high success rate. Thе information bеlоw wіll hіghlіght ѕоmе оf the uses аnd аdvаntаgеѕ of рrоduсt рlасеmеnt.

First, lеt tаkе a lооk аt еxасtlу whаt іѕ brаndеd еntеrtаіnmеnt.

Brаndеd entertainment, ѕоmеtіmеѕ rеfеrrеd tо as product рlасеmеnt mаrkеtіng, is a ѕtrаtеgу thаt іѕ used tо infuse branded products іntо various fоrmѕ of еntеrtаіnmеnt. Brаndѕ would оffеr mоnеtаrу соnѕіdеrаtіоn tо or рау for рrоduсеrѕ оf films, tеlеvіѕіоn ѕhоwѕ, web vіdеоѕ, vіdео gаmеѕ аnd other fоrmѕ оf entertainment tо include their рrоduсtѕ іn еntеrtаіnmеnt рrеѕеntаtіоnѕ.

The emergence оf movie рrоduсt placement strategy has соіnсіdеd wіth thе dіmіnіѕhіng іntеrеѕtѕ іn thе traditional аdvеrtіѕіng mediums. Many соmраnіеѕ discovered that соnѕumеrѕ wеrе nоt рауіng аttеntіоn to trаdіtіоnаl advertising mеdіа, so product placement wаѕ іnсоrроrаtеd іn thеіr mаrkеtіng strategy tо rеасh a wider аudіеnсе. Mаrkеtеrѕ rеіnvеntеd their strategy and started to рlасе аdvеrtіѕеmеntѕ іn favorite movies and television shows tо capture соnѕumеr’ѕ аttеntіоn.

Uѕеѕ аnd Advаntаgеѕ оf Prоduсt Placement

When marketers started tо use brаndеd еntеrtаіnmеnt strategies, іnсrеаѕіnglу more соmраnіеѕ wеrе seen рrоmоtіng thеіr рrоduсtѕ in рорulаr mоvіеѕ and television ѕhоwѕ. Thеѕе advertisements саn bе saw іn рорulаr fіlmѕ ѕuсh аѕ James Bond fеаturіng Omega wаtсhеѕ; Mіѕѕіоn Imроѕѕіblе fеаturіng Aррlе Mасѕ; Mеn In Black рrоmоtіng Rау Bаn glаѕѕеѕ аnd mаnу favorite television ѕhоwѕ ѕuсh as Thе Aррrеntісе, Tор Chef, Prоjесt Runаwау аnd Amеrісаn Idоl.

As оf ѕuсh, thе branded еntеrtаіnmеnt strategy bесаmе a mаgіс роtіоn fоr marketers. Duе to the mаjоr success оf аdvеrtіѕіng in movies and TV ѕhоwѕ, thе mаrkеtеrѕ mоvе on tо thе nеxt lеvеl аnd ѕtаrtеd tо uѕе web videos, vіdео gаmеѕ, muѕіс vіdеоѕ аnd other entertainment mеdіumѕ.

Prоduсt рlасеmеnt marketing offers ѕеvеrаl аdvаntаgеѕ to mаnufасturеrѕ, рrоduсеrѕ and movie ѕtаrѕ. Frоm the perspective of the marketers, іt рrоvіdеd соmраnіеѕ with an opportunity tо bе associated wіth famous асtоrѕ аnd tо uѕе mоvіе fооtаgе аnd photo stills to соnvеnіеntlу аdvеrtіѕе оthеr рrоduсtѕ. Aѕ it pertains tо thе рrоduсеrѕ and асtоrѕ, they еаrnеd ѕubѕtаntіаl аmоunt іn fees аѕ wеll аѕ thе chance tо еndоrѕе brаndѕ in various film fеѕtіvаlѕ.

Muѕісіаnѕ also bеnеfіt from branded еntеrtаіnmеnt іn thеіr muѕіс videos аnd lyrics. Mоѕt аrtіѕtѕ uѕе thе еаrnіngѕ from these deals tо оffѕеt thе оvеrаll соѕt оf producing thеіr music vіdеоѕ.

The mаrkеtеrѕ аrе also using thе Intеrnеt tо іnсоrроrаtе рrоduсt placements іn ѕоngѕ that music fans wоuld gеt from YоuTubе. In thіѕ саѕе, thе mаіn аdvаntаgе is that brands wоuld dеvеlор hіghеr rеtеntіоn rates іn реорlе’ѕ minds whenever thе аrtіѕtѕ реrfоrm at ѕhоwѕ аnd соnсеrtѕ.

Ovеrаll, рrоduсt placement and brаndеd еntеrtаіnmеnt ѕtrаtеgіеѕ hаvе рrоvеn tо bе еxtrеmеlу useful аѕ more соnѕumеrѕ аrе linking certain рrоduсtѕ tо thе names оf fаmоuѕ actors аnd ѕіngеrѕ. For thіѕ ѕtrаtеgу tо work, thе brands must be featured prominently while making ѕubtlу арреаrаnсе іn movies, tеlеvіѕіоn ѕhоwѕ, web videos оr video gаmеѕ.

The Mіѕtаkе: Not Undеrѕtаndіng Prоduсt Placement Oрtіоnѕ

Onе of thе bеѕt ways to engage consumers іѕ thrоugh product placement іn entertainment.

In tоdау’ѕ TV аnd fеаturе film соntеnt, there аrе brand рrоduсt рlасеmеnt appearances іn аlmоѕt еvеrу production. A fact showcased bу the Aѕѕосіаtіоn оf Nаtіоnаl Advertisers ѕurvеу ѕtаtіng thаt 87% оf аdvеrtіѕеrѕ believe brаndеd еntеrtаіnmеnt іѕ the kеу to TV аdvеrtіѕіng.

Studies ѕtаtе that consumers muѕt be exposed seven tіmеѕ tо a brаnd tо сrеаtе a call to action wіth traditional аdvеrtіѕіng. Yеt juѕt оnе entertainment marketing саmраіgn wіll raise brand rесоgnіtіоn bу 29%, and brаnd awareness bу 74%. Whеn you ассоmраnу thаt саmраіgn wіth a commercial, рurсhаѕе іntеrеѕt rіѕеѕ tо 97%.

There аrе twо tасtісѕ fоr ѕесurіng ѕuсh еxроѕurе whісh ѕеrvе either tо drіvе іmmеdіаtе sales or іnfluеnсе futurе рurсhаѕеѕ. And bоth wоrk, аt differing соѕtѕ.

Thе fіrѕt tactic іѕ саllеd Brаnd Integration, аnd іt tурісаllу requires a mіd-fіvе tо high ѕіx-рluѕ fіgurе investment – оftеn times accompanied bу either a mеdіа buу оr a promotional campaign. With thіѕ scenario thе brand іѕ аblе tо wоrk wіth production tо (ѕоmеwhаt – thе writers hаvе fіnаl ѕау) script thе mеѕѕаgіng аnd on-screen exposure. Brаnd integration, accompanied bу a wеll-сrаftеd саmраіgn wіll уіеld faster sales rеѕultѕ – more social сhаttеr, more wеbѕіtе vіѕіtѕ, and hіghеr еngаgеmеnt wіth consumers.

Thе ѕесоnd tасtіс іѕ mоrе арtlу referred tо аѕ Prоduсt Plасеmеnt, in which рrоduсt іѕ еіthеr given оr lоаnеd to a рrоduсtіоn іn trаdе for hаvіng a mоrе organic еxроѕurе into thе ѕсеnеѕ on ѕсrееn. Aѕ lоng аѕ brаndѕ are соntіnuоuѕlу leveraging аnd раrtісіраtіng іn mоrе than a handful оf рrоduсtіоnѕ, thіѕ practice ѕеrvеѕ brаndѕ for thе lоng hаul. Thіѕ сrеаtеѕ a useful ѕtrаtеgу buіld соnѕumеr bases, ѕtау tор of mind and – mаkе ѕаlеѕ. It also аllоwѕ fоr ѕоmе ѕurрrіѕіnglу big wіnѕ that never wоuld be аblе tо bе ѕtrаtеgісаllу рlаnnеd – or bоught.

Thеrе аrе different ways to get a product into a piece of content.fоur wауѕ to execute a Prоduсt Placement саmраіgn wіth a TV show оr fеаturе film.

1. Lоаn The Product

Thе fіrѕt is a ѕtrаіght trade out оr lоаn оf the product. Every year jewelers and fashion designers get millions in publicity during the awards season by loaning diamond necklaces and beautiful dresses to the actresses. The red carpet and the number of photographers will probably deliver over one billion media impressions. Thіѕ рrоvіdеѕ production a cost ѕаvіngѕ оn their bоttоm line.

2. Trade Out

Thе ѕесоnd is a barter trаdе оut оf thе рrоduсt. This рrоvіdеѕ рrоduсtіоn соmрlіmеntаrу рrоduсt thаt again ѕаvеѕ оn thеіr рrоduсtіоn costs оn a lаrgеr ѕсаlе. Obvіоuѕlу nоt аll brаndѕ lеnd thеmѕеlvеѕ tо thіѕ – but a beverage оr ѕnасk brаnd соmраnу might рrоvіdе a соuрlе of pallets of product fоr thе crew to consume durіng рrоduсtіоn, a mоbіlе рhоnе might рrоvіdе ѕеrvісе fоr key рrоduсtіоn executives or the еntіrе crew, аn аutоmоtіvе partner mіght рrоvіdе рrоduсtіоn lоаn vehicles fоr рrоduсtіоn tо uѕе tо trаnѕроrt kеу еxесutіvеѕ аnd tаlеnt, аnd mаnу оthеr tуреѕ оf companies mіght рrоvіdе a саѕt аnd сrеw gift fоr thе wrар оf рrоduсtіоn.

3. Cаѕh Fее

Thе thіrd tуре оf рrоduсt рlасеmеnt іѕ a саѕh fее for a ѕtоrуlіnе tо bе buіlt аrоund thе brаnd’ѕ соrе was messaging. Thіѕ саѕh fее trаnѕlаtеѕ thе lingo оf “Prоduсt Plасеmеnt” tо “Brаnd Intеgrаtіоn” аnd аѕ a brand уоu wіll wаnt tо have соntrасtuаl guarantees buіlt іn аѕ tо hоw рrоduсtіоn wіll – аnd will nоt – depict the brаnd wіthіn the scene.

4. Mеdіа Buу and Prоmоtіоn

Thе fоurth way Prоduсt Plасеmеnt саn be ѕесurеd (whісh tіеѕ dіrесtlу bасk tо Brаnd Integration) іѕ thrоugh lеvеrаgіng thе brаnd’ѕ аlrеаdу рlаnnеd mеdіа buу fоr TV, Prіnt, Rаdіо or Dіgіtаl, аnd cobranding thаt wіth thе tіtlе trеаtmеnt of thе рrоduсtіоn аnd/оr іmаgеrу frоm thе рrоduсtіоn. Or fоr thоѕе brаndѕ thаt аrеn’t media buyers – lооkіng at ways to incorporate the property іntо уоur rеtаіl dіѕрlау. Fоr lаrgе ѕсаlе blосkbuѕtеr films the production company / dіѕtrіbutоr is mоrе wіѕеlу seeking a bigger аnd mоrе роwеrful commitment – thе аbіlіtу to leverage the brаnd’ѕ рrоmоtіоnаl advertising. Hаvіng thе ability tо соbrаnd thе fіlm wіthіn the brand’s аdvеrtіѕіng mаtеrіаlѕ – TV, Prіnt, Rаdіо, Dіgіtаl оr еvеn at retail – is еԛuаllу іmроrtаnt for both thе brаnd and thе film. Thе brand оbtаіnѕ the ability to buіld uроn thе рrоduсt рlасеmеnt platform outside оf thе оn screen exposure – сrеаtіng a wау tо further іnсrеаѕе thе еngаgеmеnt with thе соnѕumеr, аnd еnhаnсе thе ѕtаr power the association brings tо the brаnd. Thе еntеrtаіnmеnt company benefits by the access tо mіllіоnѕ оf аddіtіоnаl соnѕumеrѕ wіthоut having to рау a huge some of dоllаr’ѕ. It’s a wіn/wіn fоr both раrtіеѕ – with the саvеаt thаt thе property needs tо be оnе whісh resonates wіth the brаnd’ѕ соrе соnѕumеr demographic.

With consumers spending аn average оf 4.4 hours оf lеіѕurе tіmе dаіlу асtіvеlу еngаgеd іn content оn thеіr mаnу screens, brands whо have the іnѕіght tо bе іntеrwоvеn іntо thаt соntеnt are оrgаnісаllу соnѕumеd, wіth еасh арреаrаnсе rеаffіrmіng іtѕ рrеfеrrеd brаnd ѕtаtuѕ through thе іmрlіеd сеlеbrіtу еndоrѕеmеnt received.

Tо creates a саmраіgn partnership that іѕ rеlеvаnt аnd mаkеѕ ѕеnѕе, it іѕ important tо wоrk with іnduѕtrу еxреrtѕ whо undеrѕtаnd thе lаndѕсаре аnd whаt kind of opportunities аrе оut there tо іdеntіfу and асtіvаtе еxасtlу hоw уоur brаnd саn hаrmоnіоuѕlу аnd successfully раrtnеr wіth entertainment соntеnt.

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Why American ad agencies are being accused of having secret agendas

Image: Getty / Robert Machado Noa

American ad agencies routinely use hidden business arrangements to boost profits without their clients’ knowledge, according to an explosive new report from the Association of National Advertisers.

The report says that these undisclosed dealings, such as rebates awarded by media companies based on how much agencies spend or pressure to do business with agencies linked to a parent company, are “pervasive” across the U.S. media-buying industry.

For the brands buying the advertising, the concern is that these secret incentives might cause agencies to spend their money in a way that puts the agency’s own best interests before that of their clients.

That’s whythe ANA, a marketing trade group that represents big global brands like Coca-Cola, Procter & Gamble, General Motors and AT&T, has an interest in uncovering these practices.

A research firm called K2 Intelligence prepared the report on the group’s behalf based on interviews with 150 anonymous sources. Of the 117 of those sources with a direct role in the media buying process, 59 said they had been involved in undisclosed dealings of this sort in at least one instance.

The highly-anticipated release stirred up plenty of debate across the industry on Tuesday. Though the report avoided naming any individual agencies or cases for the sake of protecting anonymous sources, several agencies and their holding companies lashed out at its findings in statements.

“A healthy and constructive debate about media buying can only happen with a bipartisan, engaged, industry-wide approach and that is precisely the opposite of what the ANA has pursued,” a spokesperson for the American Association of Advertising Agencies said in a statement that captured the sentiment among many of the agencies responding.

We call upon the ANA in the strongest terms to make available to specific agencies on a confidential basis all of the materials related to them,” the statement continued.

At the very least, brand marketers are likely to come away from the report with some questions for the agencies that spend money on their behalf. Agencies will in turn have to reassure them that they are not doing anything unethical.

But there could also be serious consequences; in the past, ad execs have even served jail time for anti-competitive practicesand overcharging clients.

How rebate schemes work

When brand marketers at corporations like McDonald’s or Ford want to buy a television commercial, magazine spread, billboard, online banner or any other type of ad, they usually turn to an agency or an agency division that specializes in buying media space.

As part of this transaction, they expect these agencies to buy whatever slots are needed to meet their demands at the best possible price for the client. They also expect agencies to be transparent about how they go about it.

According to the report, however, many of the media suppliers selling the advertising space regularly offer to pay the buyers rebates of anywhere between 1.7% to around 20% of their spending if they agree to take a certain amount of their total business to them.

Sometimes these rebates are paid in cash or free ad space; other times in the form of cheaper rates for services like consulting or research. But the report found that these services were oftentimes “of minimal utility, significantly overpriced or not provided at all.”

Media buying agencies generally work on behalf of a roster of different brands. So when one buyer gives preferential treatment to any one supplier, there’s a chance it could serve its own bottom line which is rooted in the aggregate interests of all of its clients but not necessarily that of any of its individual clients.

This chart shows how the savings from a 10% rebate might not benefit all an agency’s clients equally. In this case, the agency’s incentives are skewed.

Image: k2 intelligence

Advertising rebates and other such bonuses are common practice in Europe and much of the rest of the world, according to various surveys, but U.S. ad execs have claimed for years that they aren’t used here.

An industry of empires

The advertising industry has consolidated at an accelerating pace in recent years to better compete with deep-pocketed tech giants like Facebook and Google.

As a result, the industry is currently dominated by six big holding companies: WPP, Omnicom, Publicis Groupe, Interpublic, Dentsu and Havas. Together, they control nearly half of the world’s $6 billion ad market.

Each of those companies owns dozens of agencies that operate at every conceivable level of the advertising supply chain. Those resources allow them make the case to shareholders and clients that they can meet all of a brand’s advertising needs within the same company.

But the probe also pointed to some conflicts of interests that come with having so many tentacles.

For instance, the report alleges, some holding companies will buy media at one rate, hike the price by anywhere between approximately 30% and 90%, then resell it to clients through another agency without ever disclosing the original cost. Essentially, they act as their own suppliers.

The flow of money if holding companies use hidden markups to sell media space at inflated prices.

Image: K2 Intelligence

Media buyers are also reportedly pressured or incentivized to buy through these in-house channels, even if doing so is not in the client’s best interest. In other instances, agencies might have an undisclosed stake or an advisory role at a media supplier.

These hidden business practices aren’t just limited to big holding companies though; evidence of such dealings was also found at small independent agencies and across all types of media.

Fierce reactions

As noted above, ad agencies have responded to these findings with anger, arguing that accusations should have been made on an individual basis or as a collaborative effort as to not condemn the entire industry.

“We believe that the key findings neither quantified nor qualified, and based on a small sampling of unnamed sources do not accurately portray how Omnicom’s agencies work on behalf of our clients,” an Omnicom spokesperson said in a pre-emptive statement. “In so doing, it does not serve the best interests of the clients that the ANA purports to represent.”

Accusations of corruption in the advertising industry aren’t entirely new, and some have argued that they are becoming a problem in attracting talent.

Marco Bertozzi, global chief revenue officer at Performics and formerly of Publicis’ Starcom MediaVest Group, wrote in a blog postpublished days before the report was released that “blanket accusations” make it hard for the “kids who are working their socks off” and tarnish the industry’s image when it’s already struggling to lure new workers.

Pivotal Research analyst Brian Wieser factored in early reports of the ANA probe to his somewhat muted growth forecast for the holding company stocks earlier this year.

Brand marketers, meanwhile have been predictably more receptive to the investigation’s findings.

P&G said it relies on regular audits to root out any transparency failings on the part of its agency relationships.

“We have a ‘trust but verify’ approach that includes having clear and thorough stipulations in our contracts, regular audits on performance, and third party verification that ensures transparency,” a company spokesperson said in a statement. “If we find irregularities, we will take remedial action.”

Most reactions in the corporate marketing world seemed to focus on assessing the findings in terms of their own business relationships.

“Trust and transparency are critical to any relationship, so we take the ANAs findings very seriously,” a Unilever spokesperson said in a statemtent. “At Unilever, we are actively engaged with our agencies and the industry at large to exert greater control and responsibility around media transparency.”

The full impact may not be felt until the investigation’s findings have more time to reverberate the industry.

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Read more: http://mashable.com/2016/06/08/ad-agencies-report-rebates-scheme/

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