Behavioural Economics (and the dullest blog post title ever)
Eh?
Well, I’d put the ACTUAL dullest blog post title ever in, and just stared at it thinking ‘who’s going to read that’, so thought I’d try and distract you with some humour. Of a sort.
Anyway, here’s the real title…
“Behavioural Economics and Measurement Anchoring”
(Told you it was dull. The post itself may get more exciting)
A few PHDers and myself have spent the last couple of mornings at the IPA’s Behavioural Economics (BE) workshops, run by Nick Southgate.
(As you may or may not know, Behavioural Economics is the focus of new IPA President Rory Sutherland; it’s an exciting, innovative way to move the industry onwards I think, hence the continued Feeding The Puppy interest…)
The mornings focused on ‘Choice Architecture‘ (just one strand of BE), and how we (as an industry) could begin to embrace this tenet to help achieve our clients’ goals.
The one I was at was very thought provoking, even though I found myself in the ‘how does this affect measurement and evaluation’ group.
It’s quite interesting when you start to think of what we do in terms of Choice Architecture, because it really does make you focus on the ‘getting people to make decisions/take actions’, rather the much more spurious, disconnected measures of ‘awareness’ and ‘recall’.
But the thing that occurred in the group around measurement was not the BE tenet of ‘choice architecture’, but that of ‘anchoring’.
So, for instance, if I kept talking to you about the values of various different smart phones on pay as you go contracts (£400, £500) then ask you how much you’d be willing to pay for a monthly contract, your answer will be higher than if I’d talked to you about the basic entry phones at £50, £55 and so on.
Anyway, when it comes to evaluating marketing activity, why is anchoring important, and potentially troubling?
Well, when you’re talking in terms of TV campaigns, you frame things in the language of ‘reach’. How many millions and millions of people will we reach with this?
But then when you start talking in terms of online & social activity, it’s very rare that you’ll get into the hundreds of thousands, never mind millions.
And yet the latter could be doing a better, more effective job. But we’ve anchored clients, and maybe ourselves, to think in ‘millions’. Not thousands. I touched on the ‘thousands not millions’ point before, you’ll remember.
Well, here’s a thought. Rather than simply measure media in ‘reach’, for our clients we should start to turn the currency into the effect it has…
Rather than a TV campaign being measured in millions of reach, you take the average of the last few campaigns you ran, and work out the average number of sales it delivers. I’m sure all the econometrics that clients use nowadays could give us a rough indication of this per client.
So when we started evaluating which decisions we should make from a communications point of view, the options are all laid out on as level a playing field as possible, and the anchoring issue disappears.
It’s the general problem with measuring media in ‘reach’… any number with the word ‘million’ on the end contains a lovely, juicy slice of ‘potential’ in it… “imagine if we convert just a TENTH of those”…
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