Brands Effect What We Buy...Or What We Won't Buy

Author’s Note: This is one of a series of blog posts that are related to assignments from my business reporting class.


Economic theories, in general, are based on the assumption that consumers are rational and make rational decisions. But last week, my class re-examined this assumption as we read Predictably Irrational.

 

The author, Dan Ariely, is a behavioral economist, which means that he studies the social, emotional, and cognitive elements that effect the economic decisions that we make, and the book.

Based on his own research, he refutes the idea that we are rational beings and supports this through a series of experiments that not only prove our irrationality,  but also show that our irrationality is the most predictable thing about us.

He makes a really great argument, and by the end of the book you can’t help but reexamine many of your own decisions and feelings. For example, why do we feel better after taking a 50-cent aspirin, but don’t feel quite as good after taking an aspirin worth a penny.

In order to help us further explore the idea that people are predictably irrational, our professor assigned the class to carry out our own Ariely-inspired experiments this week.

Having an interest in marketing, one of the subjects that really caught my attention was the effect of expectations and, in particular, how expectations apply to brands.

Ariely discusses the idea that brand can affect how we perceive a product by discussing Pepsi and Coca Cola. He begins by discussing the “Pepsi Challenge” TV spots where consumers do a taste test of Coke and Pepsi. In a blind taste test, the consumers always choose Pepsi. And yet, a study done by Coca Cola around the same time found that when consumers could see what they were drinking, they overwhelmingly chose Coke.

So why is there a disconnect?

A group of neuroscientist found that while drinking the two sodas in a blind study had the same effect on the brain, once they subjects could identify the Coca Cola brand something different happened in their brains. Seeing the Coca Cola brand brought up all sorts of other associations for the subjects and that is why they would choose Coke more often in an open tasting.

That got me thinking. Coca Cola and Pepsi are both household names, but what makes Coca Cola a stronger brand than Pepsi? And when a really great product is on the table does it really matter what brand is attached to it? Conversely, if a really great product is presented by a brand with a lot of negative perception, will people automatically discount it?

With these questions in mind, I put together two surveys.

The Study

The first survey consisted of 10 questions that asked consumers about their purchase intent for products and services that were just about to be released to the market.

The products included a credit card that regulates its owner’s spending (an idea purposed in the book), a car that drives itself, an upscale café gas station, among others.

The group who got this survey would serve as the control group; they would give me an idea of general interest in the product itself.

The second survey used those same questions and attached brands to each of the products. Five of the brands I chose had been consistently listed as top brands in several different surveys over the past few years. The other two brands I chose specifically because their image had taken some hits in the past couple of years.

This second group was the variable group, which would help me show the effect that a brand would have on the consumers’ intent to purchase.

The two surveys were distributed over email and through social media, and then waited for the results to come in. In all I received about 30 responses for each survey.

Being a believer in the power of brand, I believed that whether good or bad, mentioning a brand in the question would result in a change in purchase intent.

I hypothesized that the variable group would have a much more positive reaction to the products where their was a popular brand attached to it.  And in the case of the two brands with image problems, I suspected that if the control group responded positively to a product, the variable group would only respond slightly less positively.

Findings

Well, I was right, to a degree.

When people saw a brand as positive, the results were similar to the control group, but they showed a bit more interest.

For example, I asked the control group if they would be interested in purchasing a car that can drive itself and is only marginally more expensive than a regular car. 28% said they would be interested in purchasing the car and 28% said that they were somewhat interested, while 41% said that they were not interested.

When Google’s name was attached to the product, however, 35% were interested in purchasing the car, 35% were somewhat interested and only 27% were not interested at all.

What I wasn’t counting on that where consumers saw a brand as less than positive, their interest was completely the opposite from the control group.

This was the case with Microsoft.

I asked the control group whether they would be interested in purchasing a TV that would allow them to access on-demand content, browse the web, stream movies from a subscription service and download apps. 24% were interested, 37% were somewhat interested, and 38% were not interested at all.

But when the second group was asked if they would buy this product made by Microsoft, only 4% said that they were interested!

I was shocked! Mostly because while Microsoft may not have a great brand affinity among consumers, I would definitely think of it as neutral and not as negative as this survey illustrate.

AppleTV, which is consistently on Amazon’s top selling electronics list.

This guess it goes to show that its not just any brand that can sell a product, it has to be the right brand. And the wrong brand might be worse, in some cases, than no brand at all.

Another unexpected finding was that while I thought only two of the brands would elicit negative feelings, it turns out that only two brand elicited positive sentiments.

Among the brands mentioned – Microsoft, Starbucks, Google, Coca Cola, Bank of America, TOMS and BP – only Google and TOMS got any positive response in the surveys.

So in the end, yes, it seems that people do have expectations of brands that affect their interest in products and services. But it also seems as if there is a general dislike of brands and skepticism of their new product offerings.

 

And without even meaning to, I have stumbled into idea proposed in Predictably Irrational, that we’ve become less trustful of brands as we are bombarded with their ads, promotions, and PR.

“Some years ago, two very perspicacious researchers, Marian Friestad and Peter Wright, suggested that people in general are starting to understand that the offers companies put before us are in their best interest and not ours,” writes Ariely. “As a consequence, we’ve become more distrustful.”

A disheartening thought for brands and their marketers, but one that must be addressed.

The first place to start would be to look at those brands that have a very positive brand appeal: Google and TOMS. I think we should also add Apple to that list, as they are often regarded as the gold standard of brands.

Ariely argues that companies must adopt a policy of transparency, honesty, and fairness to escape the cycle of mistrust.

 

I would also add that customers inherently put more trust in a brand that has been very clear about their purpose as a company, and their larger purpose within the society. If a brand can identify a sole purpose, and a bigger purpose, it gives consumers less reason to doubt their intentions.

For Google it is do no harm. For TOMS it is creating a better tomorrow by creating a compassionate today. And for Apple it is thinking different.

Can anyone think of what it is for Microsoft? I can’t and maybe that’s part of the problem.

Obama Enlists Unpaid Artists for Jobs Campaign

Obama for America, the president's re-election campaign, is asking artists from across the country to create posters about job creation and to do so for free.

A sample poster designed by Kate Holloway, OFA Staff.

Courtesy Obama for America

The campaign is trying to crowd-source posters "illustrating why we support President Obama's plan to create jobs now, and why we'll re-elect him to continue fighting for jobs for the next four years."

To be clear, the actual ask is for artists to enter their posters into a contest. The winner will receive a framed version of their poster signed by the president. The losers don’t get squat and their designs are then considered intellectual property of Obama for America.

So while they can justify their actions by calling this a contest, the artists are basically working without being paid.

Talk about not practicing what you preach!

Rolling Stone writer Tim Dickinson has severely criticized Obama for America for this contest in a recent article.

“The Obama campaign has more than $60 million cash on hand,” wrote Dickinson. “In an economy this bad, you'd think a presidential campaign that flush would be happy to pay good money for a talented designer to create a campaign poster.”

Especially since the design industry has been pretty hard in this economy, as San Francisco creative director, Mike Monteiro, notes in the article.

I think we can agree that asking people to do free work in an effort to promote job creation is hypocritical and a poor decision on the part of campaign strategists. But it is also a sign that the campaign doesn’t have a very good read on how voters have changed since 2008.

Well, it worked in 2008

A sample poster designed by Ryan Roche, OFA Staff.

Courtesy Obama for America

In the 2008, designers and artists did a great deal of free work for Obama for America. In fact, a large portion of the campaign was based on crowd-sourced material and  unpaid volunteers spreading Obama’s message of hope.

The campaign not only won Obama the presidency, but it was largely hailed as one of the greatest campaigns of the year having integrated social media and digital capabilities in unprecedented ways. It was so ground breaking it even won a Cannes Gold Lion, the Oscar of advertising awards.

His campaign was hailed as a revolution not only in political campaigning, but in marketing generally.

“The promotion of the brand called Obama is a case study of where the American marketplace – and, potentially, the global one – is moving,” wrote Fast Company. “His openness to the way consumers today communicate with one another, his recognition of their desire for authentic "products," and his understanding of the need for a new global image – all are valuable signals for marketers everywhere.”

With such praise, it is no wonder that Obama for America wants to follow the same template.

The issue is that Obama’s target market – to use a marketing term – has changed in the last three years. They are the same people, but they will not be won with the same tactics that were used the last time around.

In 2008, Obama’s strongest supporters were mostly young people, eager for change and looking to a fresh politician to give them hope at a time when the effects of the recession were just beginning.

Fast-forward to 2011 and those young people, who were such fervent supporters, face unemployment levels averaging around 14% and they are a bit disillusioned as they haven’t seen the transformation that they thought they would.

So this time around, these people aren’t buying a promise of change, they want to see change.

They don’t want hope, they want jobs.

They won’t settle for abstract words, they want concrete action.

Yes We Can…Again

So while this group might require new tactics that is not to say that Obama for America can’t recycle what made the 2008 campaign so effective.

They should continue to use innovative communication tools to create authentic experiences for voters and facilitate consumer creation of the Obama brand. 

So how might they have approached this Jobs Poster in a way that would capitalize on the success of 2008 campaign, yet be more action oriented?

With $60 million in the coffers, Obama for America could have made a big statement, for example, by hiring groups of unemployed artists and designers to create different posters.

Better yet, hire a group in Detroit, Las Vegas, Riverside, etc. and have each create posters tailored specifically to their locale. Then he is not only supporting those who have suffered unemployment, but he is supporting the unemployed in local communities across the country.

A move like that shows voters that Obama isn’t just about rhetoric and slogans, he is going to put his money where is mouth is.

Facebook Takes a Crack at Unemployment

Facebook announced on Thursday that it will be teaming up with the U.S. Department of Labor and three other employment-related agencies in an effort to decrease the country’s 9.1% unemployment rate through social networking.

As part of this effort, a page called “Social Jobs” was launched that hosts resources and content designed to help job seekers and employers. Facebook will promote the Social Jobs Page in the 10 states with the highest unemployment rate.

"Linking American job seekers with the resources they need to get back to work is a top priority of the Obama Administration and my department," said U.S. Secretary of Labor Hilda L. Solis in a statement. "By leveraging the power of the social web, this initiative will provide immediate, meaningful and ready-to-use information for job seekers and employers, and a modern platform to better connect them."

Their decision is most likely a result of data pointing to social media as a leading source for job hunters and recruiters. According to a Jobville poll, 92% of respondents have recruited or plan to recruit via social networks.

Despite the fact that one of the primary functions of Linkedin is to facilitate job-hunting, Facebook has been chosen by the government as the first social network to become involved with the initiative.

Solis confirms, however, that the U.S. Dept. of Labor will be reaching out to Linkedin and Twitter to join the initiative in the future.

In the meantime, it sounds as if Facebook may be expanding their current job offerings section in the Marketplace to echo something more similar to LInkedin.

The Social Jobs page says that Facebook will “explore and develop systems where new job postings can be delivered virally through the Facebook site at no charge.”

An article in Mashable speculates that a job board on Facebook could make them a serious competitor with Linkedin and Monster.com.

It should be noted, however, that Facebook has had a jobs section in the Marketplace for many years without causing much threat to those other career-focused sites.

But I am sure that they are hoping to become a bigger competitor for Linkedin in the future.

Yet, Linkedin provides something very important that Facebook cannot provide, save a major overhaul.

LinkedIn’s sole purpose is professional networking and people create their identities on the site with that in mind. If Facebook could provide a way for users to have multiple profiles under one name – a way to show one profile to friends and another to professional contacts – then they may pose a more serious threat.

Until they do that, however, they do have some major advantages in terms of what they can provide the government in this endeavor. For one, they have their enormous user base.

They plan to use their large population of users to conduct in-depth surveys and research about how job seekers, career centers, and recruiters use social media in the job hunt process.

This could prove a valuable tool for the government in figuring out the unemployment issue, possibly revealing which regions have the greatest issues and which industries have the biggest supply and demand issues.

Depending on the quality of information they can gather, the endeavor could prove extremely important in both future policy and in the future development of Facebook.

“We’re not going to limit ourselves to what’s possible today,” said one of the site’s spokespeople to Mashable. “Instead, we’re going to devote resources to develop the innovations that are going to help the job seekers of tomorrow.”

Can Tablets Save Newspapers?

Photo by George Kelly

Last Thursday, Apple released iOS 5, its updated operating system. Among its new features was Newsstand, which will house the latest issues of titles that an iPad or iPhone user subscribes to.

Publishers are excited about this new feature, hoping that the increased visibility provided by Newsstand will sell more subscriptions. The New York Times, The Guardian, The Telegraph and the San Francisco Chronicle, as well as The New Yorker, Wired and Vanity Fair are some of the first publications that can be accessed through Newsstand.

It’s no secret that newspaper publishers have had trouble in the past years with subscriptions dwindling and advertisers, in some cases, following suit.

But in the past year it seems that publishers have set their hopes on mobile apps to help recruit subscribers.

If they are hoping that mobile will pull them out of their funk, then the results of a new study from the BBC and Starcom MediaVest, which implies that tablet users are more enthusiastic consumers of news and have stronger feelings for the news sites they frequent, will really put some smiles on their faces and, hopefully, money in their pockets.

According to the study, which was reported by Media Post, almost 8 in 10 tablet owners, or 78%, say they read more stories and follow a greater diversity of news topics than before they owned a tablet and 48% rely on tablet news apps.

It seems that the visual aspects and interactive features in the app experience are also adding to tablet owners’ higher news consumption. In fact, 80% found the overall news experience on a tablet to be better than on a computer or mobile phone. Stories felt “more real" for another 63%.

Just to drive home how hard-core tablet users are about their news apps, 44% said they would rather give up coffee before their news apps and 44% said they would rather give up Facebook.

As a habitual newsfeed and status checker, like most people I know, it would take something pretty amazing to make me give up my Facebook!

It seems that the news industry may have found not only people that will subscribe, but also some new evangelists for their industry.

In addition to this, tablet owners, in terms of demographics, are an attractive group to advertisers. They are more accepting towards advertising and are more likely to answer call-to-actions after viewing ads. In an industry where the ability to advertisers means you sink of swim, a tablet audience means that you swim.

The downside in all of this is that only about 5% of U.S. consumers own a tablet, according to Nielson. That means that while there is a market, it is very small and not considerable enough to change the state of the industry, well not yet at least.

As more tablets enter the market, and prices begin to drop, I have no doubt that the percentage of tablet owners will rise considerably.

In the meantime, publishers will have the chance to perfect their apps.

“With these findings, content providers and advertisers can design new experiences to have the most meaning and relevance among tablet news enthusiasts,” said Kate Sirkin, Starcom Mediavest’s EVP of Global Research, according to Media Post, “such as offering more opportunities to customize, interact, and engage with stories and ads.”

Say Goodbye to Captchas, Hello to Brand Ads

“You are 31.25 times more likely to win a prize in Mega Millions than you are to click on a banner ad.”

Or so says Solve Media, a company I happened to read about while cruising around Mashable yesterday. 

If you are an advertisers, this statistic is troubling. But don’t worry to much because there is a solution.

Solve Media, started in September 2010 by Ari Jacoby and Todd Lieberman, has pioneered the TYPE-IN™ ad, which replaces captchas with ads that require consumer participation.

If you’re unclear with what a captcha is, its that weird, fuzzy bent text that appears on some websites. It is there to make sure that there is actually a person visiting the site and not an automated bot.

Bots have a hard time reading these things, but as most of us know they aren’t too easy for us humans either. I would estimate that about 25% of the time that I encounter a captcha, I don’t get it right.

In fact, a researcher at UC San Diego found that it takes us about 12 seconds on average to solve a captcha. This means that for 12 seconds consumers have to completely focus on the captcha, making it a prime location for advertisers who would love even 5 seconds of a consumer's undivided attention.

And Solve has found a way to capitalize on this real estate.

"Impressions are no longer scarce, but attention has never been scarcer. In the face of incredibly shrinking click-through rates, Solve Media delivers an engagement that makes attention more active, and aids brand message recall in a very unique way," said Ian Schafer, CEO, Deep Focus on Solve’s website.

TYPE-IN™ ads are much easier to read than the captchas, so there is a consumer benefit, and they are built to force engagement, which is a big plus for brands.

Take a look at this example from Solve’s website:

Mashable reports that more than 2,000 publishers, including AOL and the Tribune Company, and more than 75 advertisers including Gilt Group, Toyota, Dr. Pepper, Microsoft, Expedia, Chase, General Electric and Groupon are already using the product.

With these publishers and advertisers on board, it was reported that Solve averaged about 620,000 type-ins per day in July  and is growing 15 percent month to month.

And it’s likely that they will continue to grow as research on TYPE-IN™ metrics are much better than those of standard banner ads.

A recent study on the effectiveness of these ads, conducted by Young-Bean Song of AnalyticsDNA, found that these campaigns generated 65% for brand association and 67% for ad recall.

“These results are remarkable. I have never seen campaign brand impact results this consistently strong in my 14 years of digital marketing. Looks like Solve Media has found that unique sweet spot of 'voluntary indirect engagement' that actually works," said Song in a statement.

It makes sense that these ads would have more impact than banner ads since users are forced not only to look at the ad, but also to type the message of the ad.

“People are not paying attention to banner ads,” said Jacoby in the Mashable article. “When they’re sending email they’re focused on email, when they’re playing games they’re focused on that, and when they’re reading an important news story they don’t even see the ad.”

As consumers become more and more desensitized to online advertising, its products like the TYPE-IN™, which insert itself between content and disrupt the online experience in a natural way, that are the future of online advertising.

Money Speaks for the People with Occupy George

As Occupy Wall Street went global today, with protests in more than 80 countries including China, Japan, Indonesia, Italy and England, Andy Dao and Ivan Cash joined the effort, not by marching alongside the protestor, but by distributing dollar bills.

These weren’t any regular dollar bills though. These ones have facts printed on them. Facts that Dao, an art director at Goodby, Silverstein & Partners, and Cash, a former Wieden+Kennedy art director, hope will inform the greater public about what is going on in our country.

They are calling their project Occupy George.

“Money talks, but not loud enough for the 99%,” says the intro to their website. “By circulating bills stamped with fact-based infographics, Occupy George informs the public of America’s Daunting economic disparity one bill at a time. Because money knowledge is power.”

The website, occupygeorge.com, provides a way to circulate five different stamped bills over Facebook, Twitter, and Flicker. You can also find a downloadable template on the site, so that you can create your own stamped dollars. 

The dollars illustrate facts like "in America the average CEO earns 185 times more than the average worker" (see below).

For those interested in joining the protests, the site also provides a map of Occupy Wall Street events across the country and links to each of the local "Occupy" groups.

Featured on Creativity Online’s homepage today, the site and Twitter handle (@occupygeorge) launched yesterday just in time for today’s protests.

If this catches on, which I think it has the potential to do, these dollar bills could be a really powerful tool in spreading the real message behind Occupy Wall Street, which many are still unclear about. 

After all, art has a great amount of power in communicating with the masses. To quote from the philosophy of Goodby, Silverstein & Partners, “art is the stutter step that freezes the opponent.”

  

An Occupy George dollar showing the average pay of a CEO versus the average pay of the worker.