What's the point of creativity in Direct Marketing


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The application of behavioural economics and herd theory to direct marketing with examples. Given to the Marketing in Direct Conference in Bucharest Sept 8th 2010

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  • Black envelope Heavier paper, Official crest Actually an invite to spend money – dinner and conference marketing society
  • Neuroscience – focus on brain activity not unproven models of how we make decisions Emotions and decision making Herd theory – we copy other people Behavioural economics – we’re not rational
  • What's the point of creativity in Direct Marketing

    1. 1. Direct Marketing - what’s the point of the creative work? John Griffiths Planning Above and Beyond Bucharest Sept 8th The application of behavioural economics to DM
    2. 2. creativity and strategy
    3. 3. Why? <ul><li>Recession – double dip? </li></ul><ul><li>Pressure on prices - budgets </li></ul><ul><li>Low barriers to bad practice – </li></ul><ul><li>Focus on channels and message delivery NOT content, effective engagement </li></ul><ul><li>SO Response suffers </li></ul>
    4. 4. What is creativity for?
    5. 5. Creativity is not the primary driver of response
    6. 6. Direct Marketing is NOT an Ad in an envelope!
    7. 7. Which gives you better response? <ul><li>Send great creative to the wrong target group OR </li></ul><ul><li>Send terrible creative to the right target group </li></ul>
    8. 8. Contribution to response Source: Direct Marketing Association
    9. 13. Intrigue <ul><li>Black envelope </li></ul><ul><li>Heavier paper, </li></ul><ul><li>Official crest </li></ul><ul><li>Actually an invitation to spend money </li></ul><ul><ul><li>Annual conference £400 </li></ul></ul><ul><ul><li>Dinner £3000 per table </li></ul></ul>
    10. 14. This invitation is going to cost me money!
    11. 15. What is the creative strategy? <ul><li>Makes me curious </li></ul><ul><li>Make me think this invitation is </li></ul><ul><ul><li>Unusual </li></ul></ul><ul><ul><li>Exclusive </li></ul></ul><ul><ul><li>Limited </li></ul></ul><ul><li>Confuses my price perceptions </li></ul><ul><li>Engages me so I think about attending even if I am a </li></ul><ul><ul><li>regular attender </li></ul></ul><ul><ul><li>non attender </li></ul></ul><ul><ul><li>lapsed attender </li></ul></ul>
    12. 16. Les Binet – how advertising works Review of IPA effectiveness winners since 1980
    13. 17. Which are more effective: emotional or rational campaigns? Effective ads work via emotions, not messages. Source: Les Binet 2009
    14. 18. Rational messages are LESS powerful Effective ads create ripples of influence throughout society. Source: Les Binet 2009
    15. 19. The most profitable advertising makes me less price sensitive Effective ads “tilt the demand curve”. Source: Les Binet 2009
    16. 20. The way the Marketing Society event creative works is.. <ul><li>NOT to get me to respond </li></ul><ul><li>NOT to sell the benefits of the conference </li></ul><ul><li>To make me feel it is </li></ul><ul><li>A privilege to go </li></ul><ul><li>The price is irrelevant! </li></ul>Targeting task I am already a Marketing Society member Creative task Make me feel differently about attending
    17. 21. How marketing thinking is changing Neuroscience Emotion Memory Decision making Herd theory Behavioural economics
    18. 22. Sometimes.. We want people to think <ul><li>We want people to think – for example brand switching </li></ul>
    19. 23. Sometimes .. We don’t <ul><li>Sometimes we don’t want them to think – for example renewal </li></ul>
    20. 24. We DO want them to go through a process <ul><li>The creative strategy designs that decision process </li></ul>
    21. 25. Where creativity can make a difference <ul><li>Reposition the brand </li></ul><ul><li>Restructure the decision </li></ul><ul><li>Prevent change </li></ul>
    22. 26. Neuroscience <ul><li>focus on brain activity NOT unproven models of how we make decisions </li></ul><ul><li>Do you have evidence that the mental models you use actually work? </li></ul>Human Mammal Reptile
    23. 27. Emotion <ul><li>Driven mostly by the mammal brain </li></ul><ul><li>The essential component for decision making </li></ul>
    24. 28. Memory <ul><li>Is always a copy of the decision not a unique, permanent original record </li></ul><ul><li>Changes every time memory is used –dynamic </li></ul><ul><li>If customers have bad experiences – we can modify the memory </li></ul>
    25. 29. Herd theory: what everyone else is doing <ul><li>We are influenced by other people </li></ul><ul><li>9 out of 10 owners say their cats prefer.. </li></ul><ul><li>We imitate gestures </li></ul><ul><li>We like the idea of sharing taste </li></ul>
    26. 30. Behavioural economics <ul><li>we’re not rational </li></ul><ul><li>We don’t have the time to consider all the alternatives </li></ul><ul><li>We post rationalise our decision – so give a different reason </li></ul>
    27. 31. Heuristics <ul><li>Heuristics are quick general rules not logic which help people to make choices </li></ul><ul><ul><li>Decoys </li></ul></ul><ul><ul><li>Anchoring </li></ul></ul><ul><ul><li>Mandated choice </li></ul></ul>
    28. 32. The decoy: how to assist choice <ul><li>If you put a similar offer close to the offer you want to push – and make that offer unattractive – you massively increase the response </li></ul>
    29. 33. 3 way offer Source Don Ariely
    30. 34. 2 way offer
    31. 35. 3 way offer Source Don Ariely 16 84 0
    32. 36. 2 way offer 68 32 Source Don Ariely
    33. 37. Anchoring <ul><li>The brain relies too heavily, or &quot;anchors,&quot; on one trait or piece of information when making decisions. </li></ul><ul><li>When making the decision the mind can’t discount the anchor </li></ul><ul><li>Put in a higher priced product that no one buys – allows you to price the medium product higher – this increases sales to the medium price </li></ul>
    34. 38. Irish post office RMG Target Dublin
    35. 39. Irish post office: Heuristics in action <ul><li>Letter with a penny </li></ul><ul><li>Scratch to find a unique URL </li></ul><ul><li>Enter URL </li></ul><ul><li>On website greeted by name by mind reader who gets you to empty your pockets and does mind reading project </li></ul><ul><li>ERGO – direct marketing works – look what you just did! </li></ul>
    36. 40. Mandated choice <ul><li>The way you preset the answers affects the response </li></ul><ul><li>Default is YES! </li></ul><ul><li>Example Readers Digest </li></ul><ul><li>Nudge – how to influence the context </li></ul>
    37. 41. Priming <ul><li>Pre-condition response </li></ul><ul><li>Intelligent word exercise helps quiz takers give more intelligent answers, 10 commandments more honest answers </li></ul><ul><li>Give your recipients something memorable to do to increase their involvement </li></ul><ul><li>Example mailing to persuade sales reps to sell Windows more aggressively </li></ul>
    38. 42. Windows <ul><li>Y&R Auckland </li></ul>
    39. 43. Loss aversion <ul><li>People strongly prefer avoiding losses to acquiring gains </li></ul><ul><li>If you remind them of the risks of losing they will actively avoid them </li></ul><ul><li>Even if the losses are very small </li></ul><ul><li>Tell respondents what they lose if they don’t buy </li></ul><ul><li>Example IBM – the risks of buying the wrong IT system </li></ul>
    40. 44. <ul><li>Ogilvy Beijing </li></ul>IBM Shark
    41. 45. The power of FREE <ul><li>Variation of loss aversion </li></ul><ul><li>Zero risk always the preferred option </li></ul><ul><li>The Free offer always attracts buyers </li></ul><ul><li>Even if you have to pay more to get it! </li></ul>
    42. 46. Herd thinking <ul><li>Who you identify with </li></ul><ul><li>Who you want to imitate </li></ul><ul><ul><li>Aspiration </li></ul></ul><ul><ul><li>Mimicing </li></ul></ul><ul><li>Works with anti role models .. Selling fine whisky.. In South Africa – to trade and media reps </li></ul><ul><li>Works with youth video bloggers to raise money for lifeboats </li></ul><ul><li>Works with Chevrolet media opinion formers – who become the hero </li></ul>
    43. 47. Brandhouse whiskey – anti hero Jupiter Drawing Room South Africa
    44. 48. RNLI: role models for youth Proximity London DMA Grand Prix
    45. 49. Chevrolet makes it all about YOU! Arc Worldwide Kuala Lumpur
    46. 50. whose job is this anyway? <ul><li>Account management? Constructing the offer? </li></ul><ul><li>Data planning? Is this a targeting issue? </li></ul><ul><li>Account Planning? Should it assist with creative strategy? </li></ul><ul><li>Should the client choose the mechanic? </li></ul><ul><li>If creative doesn’t own this area then do you need more than an art director to make the pack look good and brand? </li></ul>
    47. 51. Beware of channel thinking <ul><li>Does the crisis force us to find the cheapest way to market? </li></ul><ul><li>Is the lowest allowable cost always the best solution? Particularly if it leads to lower sales? </li></ul><ul><li>Should creatives have an point of view about the medium? </li></ul><ul><li>Or should the client prescribe the cheapest channel? </li></ul>
    48. 52. In summary <ul><li>Creativity is for a commercial purpose – focus – we’re not entertaining people to make it easier to sell to them </li></ul><ul><li>Or to win creative awards! </li></ul><ul><li>We’re using creative ideas to reshape the offer and to connect them with it </li></ul>
    49. 53. The books of the film..
    50. 54. The best DM creative resource I know.. And its editor Patrick Collister The Directory
    51. 55. Thank you for your attention! <ul><li>What are you going to take with you? </li></ul>