Preferences and Advertising

What if I told you that your preferences came from random choices?

New research from Johns Hopkins University confirms that we build unconscious biases all throughout our lives when we choose between things that are essentially the same.

The way I see it, this is where advertising comes into play. The research was undertaken with babies, and though the scientific data proves their behaviour is random (at first), the reality is the options these babies were presented with were out of their control. To put it simply, your preferences will be different if someone else raised you, or if you grew up at a different place, or if you were born during a different era.

I see it as an ongoing cycle that’s heavily influenced by advertising. Sure, natural progression and technological advances play a big role in these things, but little did you know, even those were advertised. Someone somewhere told another person thousands of years ago that they can use fire to cook meat – classic word of mouth.

Take grudge purchases for example – the fine line between ‘needs’ and ‘wants’ is what separates your preferences from mine. However, preferring one thing over another when choosing between similar things, most of the time has everything to do with advertising. I recently got a car and sooner or later, I’m going to need my tyres replaced. The only tyre brand I’m really familiar with is Bridgestone. That makes my choice for this specific grudge purchase easy. However, if another tyre brand presents me (someone who doesn’t know the slightest thing about car tyres) with something I value more as a person (like durability since I don’t want to be constantly changing my tyres), I might just go with that other brand. If you advertise something that matters to me, it just might pique my interest.

Advertising is meant to draw attention. Most of the time however, it comes gradually and over a long period of time – like how it comes to children. Your exposure to brands dictates an unconscious, random choice and your behaviour towards them creates your personal preferences. If you are exposed to the same choices (advertising), these options are going to be what’s familiar to you. You know these options because you either see them all the time, you’ve seen people around you use them, or you resonate with their message.

The beauty of advertising is found in the unique story a product or service has over other options (competitors). The single, most important message you share when you advertise is what can change a potential customer’s pattern of behaviour and eventually lead to you being the brand of choice. When you share and advertise your story, you’ll find that like-minded people will be attracted to what you have to offer.

The COVID-19 Acceleration

One of the most common claims since the Novel Coronavirus kicked its way into our lives earlier this year is that COVID-19 is an accelerator.

Trends that were already slowly happening have been pushed into high gear far faster and more intensely than anyone could have expected, while other trends have been created out of nowhere.

The hugely increased power of Amazon? The rise of remote working and learning? The surge in social justice activity? Tens of thousands of Kiwi ex-pats returning home? The insidious effects of the COVID-19 crisis and the associated responses (or lack thereof) drove each of these developments.

Many millions of people have suffered immeasurably this year. The long-term effects of the pandemic will be with us for decades to come in ways we don’t yet understand. On the other hand, however, some people and organizations have made out like bandits. Take Jeff Bezos for example. He’s done pretty well. He added 13 billion US dollars to his net worth in one day earlier this year. Yes, that’s 13 thousand million US dollars! Or how about Eric Yuan, founder and CEO of Zoom? He’s made more than US$12 billion since March, with his net worth rocketing up a massive 400%. People in the right place at the right time with the right vision always do well even in troubled times.

New Zealand has fared better than many other countries, but we haven’t been unaffected by the COVID-19 crisis. The worst may be yet to come, as the local and global ramifications of the pandemic are felt. Right now, compared to many countries, we’re doing okay, but still, there are lessons to be learned from the current situation. For example, how individuals, businesses, and even governments respond to a crisis, or even just striving to have enough money to ride out the next storm.

But with the mindset that we’re living in “The Time of the Acceleration” (yeah I just made that up), there are some questions that business owners, C-Suite executives, advertisers, and marketers should be asking themselves:

“What’s coming next?”

“How could it affect my business?”

And “What else is going to be accelerated?”

The last question is an important one.

Regardless of our personal feelings and attitudes towards the pandemic and the way governments and people are reacting to it, no one person can control the big picture of what’s going to happen next. A simple case of human error could plunge New Zealand back into lockdown, and no business owner or marketing manager can do anything about that.

But it’s possible to predict the coming trends. Actually, it’s not just possible; it’s now critical because bad things will happen to the businesses that don’t get their predictions right. Remember Kodak? A once-mighty company that assumed film cameras would always be hot demand items. They were caught short by how quickly the digital revolution changed photography, and the result was bankruptcy. Things are moving far faster now, especially in the brave new world that is 2020.

Here’s an example: “Contactless” is a word that’s suddenly become a more significant part of our lives than anyone could have imagined. I’ve seen the Uber and Lyft pick-up lot at Los Angeles International Airport pre-pandemic and post, and the two aren’t even vaguely similar. The former was insanely busy, and the latter was a ghost town. Drivers are vulnerable to viruses, but automated vehicles aren’t. I’ve recently spent a fair amount of time with a Tesla Model 3. The autopilot was far better than I ever thought it could be, despite being driven on a small tropical island with mediocre roads and lousy mobile network coverage. This functionality can and will only get better.

Waymo has just launched a fleet of fully self-driving taxis in the American city of Phoenix. This is just the first phase – other companies will launch similar projects, and there’ll be lots of them. Don’t be in denial that self-driving cars and trucks are coming. If your business involves cars, drivers, deliveries etc. you’re in the firing line in one way or another.

If drivers are vulnerable to a virus, then so is everyone else from the people who stack shelves in a supermarket to the doctors doing surgery in a hospital. Corporations have long looked for ways to improve their bottom line. That often comes down to efficiency, which translates into “fewer people”.

This is obvious all over the retail sector. There are self-service tills at the supermarket, increasing numbers of customers order their fast food on terminals or Apps, and passengers check-in for flights using touchscreens and then drop off their bags. Where did humans go? Serious question - are these companies less likely to find ways to cut staff and replace them with automation now?

Global supply chains are shifting, politics is transforming, the climate change discussion is only getting started, and the ongoing social experiments known as social media and fake news continue unabated. And of course, AI and machine learning are the big change-makers looming over every industry.

What are the second-order effects of this acceleration? It’s easy to not worry about any of it unless it directly affects your business, but at some point, a newly sped-up or brand new trend is going to ripple (or rip) into your industry, and only the prescient ones ahead of the curve will thrive.

The mindset of predicting accelerated trends doesn’t magically end when the pandemic does. Whether “they” discover a vaccine, or we all get immune, or we decide to just deal with it, let’s assume that one day, COVID-19 won’t be the defining factor, and we’ll get back to what passes for normal.

So, what else is being accelerated?

Cities, states, and countries around the world are eyeing the old internal combustion engine and its associated tank of fossil fuels with a beady eye. Sooner or later, you won’t be able to buy (or more importantly, sell) a conventional motor vehicle. But are we talking sooner or later? California and the City of London are looking at 2035 as a cut off date, with other counties such as Austria and Norway aiming to go for it even sooner.

That’s going to affect car and truck manufacturers in a big way, but they’ve got the resources to pivot. What about the many industries that support the motor vehicle sector? If you own a small chain of petrol stations, well, you might want to be considering this, as I’m sure many are. What about suppliers of car parts? What’s their pivot in a world of vehicles with far less moving parts to wear out and break?

On the other side of this coin lies the fact that electric cars run on electricity (obviously). Less obvious is the fact that no power grid in the world is up to dealing with every vehicle being switched to electric power as fossil fuels get phased out. Massive investments in infrastructure and technology are needed. Can your business capitalize on this paradigm shift? If not, should you be starting one that can, or should you be finding a job in an industry that won’t be dead in 10 years?

I’ll go into all of this in more detail in future posts but to cut a long story short, enormous changes are coming at multiple levels, they’re coming fast, and they’ll affect us all. If you think your business or your job isn’t going to be affected, you’re probably wrong. And if your marketing team or advertising agency aren’t looking at these issues and bringing you the information you need to make better decisions, you’ll likely end up struggling somewhere down the track.

Advertising isn’t black magic.

The phrase “half the money I spend on advertising is wasted; the trouble is I don't know which half” has been told and retold by advertisers so many times that its origin has become unclear. Some sources say it’s Lord Leverhulme who originally said it, while others give credit to John Wanamaker or Rance Crain for the phrase. Regardless of its origin, this phrase has been a quote that sticks to anyone who does any sort of advertising, whether you’re a business owner or a marketeer – mostly because advertising and money is at the forefront of the phrase.

Truth is, advertising is very difficult to measure but it’s easy to measure how much money you spend or gain. You can have as many statistics, survey methods, and analysis tools as you want, but who’s to say that they’re even completely accurate? You can pay specialists to analyse or even set up your ads for you but that means spending more money on advertising. Sometimes, companies aren’t willing to do this because they are not entirely sure what they’re paying for ­– especially when they’re asked to trust someone else to advertise for them. That’s when people start to think that there’s some black magic, voodoo-type thing involved in advertising and one of three things tend to happen:

1.  Advertisers willingly spend money on advertising because they want to see if it will work.

2. Advertisers question why they have to spend so much on advertising when they don’t even know if it will work.

3. Advertisers take the DIY route and do it themselves to “know” exactly where their money goes.

 The trouble here is not knowing exactly what you’re paying for. However, it’s not always the case. We willingly pay for a dentist to pull out a tooth for hundreds of dollars when in fact, anyone can do it. It just so happens that dentists are the only ones who can ask for money for it because it’s advertised that they are qualified to do so by all the certificates and degrees framed on their walls. They’ve studied for years, and invested in equipment and tools to make your visit more pleasant than if you’d just pull out your own tooth.

That analogy is rarely applied to those who make a career or a business out of advertising. Sometimes, people tend to overlook the years, experience, and practice it takes to make advertising effective simply because of the unwillingness to risk wasting money. Anyone can make/”DIY” a logo but it takes a good, well-seasoned designer and brand specialist to do it within an hour – but have you ever thought of how they’re able to do it in a short amount of time? To put it simply, you’re paying for the time and years they’ve spent honing their skills in design and branding. What you think you’re paying for (in this case, a logo), isn’t what you’re actually paying for. You’re paying for that expert’s time (both past and present) and skills. I think deep down, people know this up until they receive the invoice.

 It’s not black magic. Advertising experts and specialists don’t just rob you blind. There’s a lot of trust and faith involved especially when you willingly take a risk to see how your money will be good for advertising. There are unicorn-type products and businesses such as Apple and McDonald’s that no longer need to advertise but still do. So if it’s good enough for these brand giants, why can’t it be good enough for you?

Advertising and Decision-Making

You’re reading a blog from an advertising agency website but for a moment, can we set that aside and reflect a bit on how everything’s changed? By now, we can confirm that there is no singular path in life, there’s no method to the madness, and there’s no one way of doing things because sometimes – all it takes is one move, even by a stranger, and the world is changed forever. E.g. global pandemics or the discovery of electricity.

Now, may I ask you? What do you base your decisions on? Is it status? Is it fame? Money? Is it a goal? A dream? Is it because of your culture? Is it for survival?

Advertising has gained negative connotations for decades because of false promises and its old, unsolicited nature. However, wouldn’t you agree that advertising has evolved and continuously evolves especially when a person’s decision making processes are changed by the environment they’re in?

Our decisions are always influenced by something. During the lockdown, many companies resorted to communicating through online platforms which wouldn’t even be an option centuries back when the internet didn’t exist during a pandemic (e.g. The Black Death from 1346 to 1353).

Many launched DIY advertising campaigns – filming employees instead of actors, in their own backyards, using nothing but a smartphone. Advertising was primarily done online and digitally because the risk of holding advertising material such as a magazine was too risky. However, did you, the consumer, make this decision? Or was it made for you? Was it made to benefit you? Or was it made so you don’t forget that the companies advertising to you still exist?

There’s a very fine line that’s drawn here which revolves back to the question; what do you base your decisions out of?

As a consumer, do you decide based on a budget? Making ends meet while the uncertainties of the pandemic still loom over your shoulders?

As a business, do you decide based on your passion for what you do? Or has that changed because like everyone else in this economy, we’re forced to make decisions based on survival?

Advertising and marketing will always be there to influence our decisions. It’s there to inform and empower – it’s a powerful tool if you let it serve its purpose.

Advertising is complex. It is an artform. It’s persuasion. It evolves. It’s convenience. It’s permission.

Advertising is a lot of things.

What advertising is not: irrelevant.

Advertising is the ever-present concept of ‘drawing attention’, and on a base-level – we, human beings, can find advertising within us all the time. We want to be liked and we want to matter. And whether you’re a consumer or a business, there’s not a single doubt in my mind that you need advertising.

You need advertising to inform and be informed. We can mask it in different words but whatever your defining motivations are in making decisions, advertising has and always will be present in it.

This industry sustains the world whether we realise it or not. Besides, can you imagine a world without advertising? No branded anything – just generic stuff. No options, no colour, no consistency, no art? Advertising has made the world a colourful place. A place of choice and a place with options. If you pay enough attention – if you care enough, you’ll realise this.