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Behavioural economics is effective

News, 11 June 2015

LONDON: Good advertising people are instinctive behavioural scientists, according to Rory Sutherland, vice-chairman of Ogilvy & Mather UK.

Sutherland made this observation during a recent Warc webinar where he and Nick Southgate, a behavioural economics consultant, discussed how this way of thinking has permeated the advertising world in recent years.

Simply giving something a new name, for instance, has dramatically changed consumer behaviour. Creating the appellation "designated driver" thus helped the idea become a norm in the UK, reducing incidences of drink driving as a result.

Many marketers now consider the impact of behavioural hurdles and biases in the everyday customer experience, too. And Sutherland claimed to be proudest of the small strategic tweaks which cost nothing but had a major impact.

He gave the example of an airline offering cheap flights to 29 destinations across Europe, which is a list too long for most consumers to realistically consider. Sutherland thus advised writing to people and naming five locations instead, and this simple tactic massively increased demand.

"Ten years ago, the advertising industry didn't think about this stuff at all," said Sutherland, who also suggested that the most important metric around behavioural economics was actually the extent to which people talked about it.

The fact this idea is now widely accepted as a scientific concept also means it's easier to talk about it to non-marketers, he added.

Southgate highlighted five areas of best practice, based on his analysis of 60 IPA case studies which cited the use of behavioural economics. These included big nudges, small nudges, price campaigns, positioning campaigns and evaluation.

An example of a big nudge came from a British Heart Foundation campaign which explained CPR to the public. Most people have already grasped the idea of CPR from TV shows, so the focus shifted from awareness to how to actually carry out CPR.


And it achieved this by adapting existing knowledge and capacities – for instance, by recommending that attempts to resuscitate someone by pumping their chest should proceed to the rhythm of "Stayin' Alive" by the Bee Gees.

Small nudges were instrumental to a campaign from home-improvement company Everest, which – according to Southgate – solved a sales problem with a "silver buckshot" approach.

This took its inspiration from Sir David Brailsford, the head of the British cycling team, who said there wasn't one thing he could do to make a cyclist 10% better, but there were many areas that could be made 1% better.

Adding up all these benefits ultimately makes a huge difference, as was demonstrated by the cycling team's subsequent haul of Olympic medals.

Data sourced from Warc