Have planners abandoned behavioral economics?

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Most planners have as much awareness of behavioral economics as the well-read New York Times reader, writes the chief strategy officer of FCB Chicago.

Nearly 100 years ago, Claude Hopkins published "Scientific Advertising," an instant classic that still remains one of the bestselling advertising books of all time. Chapter six talks about psychology and starts off unequivocally, "The competent advertising man must understand psychology."

Reading this a century later, I was struck by how we are at the end of a decade wherein more insight on how the brain decides has been shared than in the previous 100 years. Books like Dan Ariely's "Predictably Irrational," Richard Thaler's "Nudge" and Cialdini's "Yes! 50 Scientifically Proven Ways to Be Persuasivehave popularized all the advances in the academic world of behavioral economics.

But our research indicates that the business of persuasion has not fully embraced the science of persuasion. In a survey conducted with Siftly, an online jobs board for the strategy community, we interviewed nearly 200 planners with a broad array of agency backgrounds and experience levels to determine how the advertising community is leveraging behavior economics.

The results were not what one would expect. Overall, they were discouraging.

For instance:

  • Only 1 in 5 planners considered themselves very familiar with behavioral economics.
  • 61 percent of respondents rated themselves as "somewhat familiar" with this concept versus 34 percent as "not at all."
  • Only 26 percent of planners use behavioral economics "most of the time" in strategic development.
  • Only 14 percent of agencies use it "most of the time" in strategic development.

At first, we thought they were all being tough on themselves, comparing their knowledge to hardcore academics. But when we reviewed respondents’ most influential reads for planners, the list was pretty much populated with well-known books such as "Freakonomics" or titles by Malcolm Gladwell, indicating that for most planners, behavioral economics was really any perspective on human behavior that showcased surprising behavior paths.

Which led us to conclude that rather than being "competent" in behavioral economics, most planners have only a shallow awareness, similar to any well-read New York Times reader.

When we asked about the barriers to using behavioral economics, responses clustered around three key areas: the complexity and access to obscure academic theories; the perception that behavioral economics is primarily focused on tactical issues; and inertia in the industry, with everyone attached to traditional metrics.

Given these barriers, what can we be doing to help the business of persuasion embrace, leverage and catch up to the science of persuasion? 

Simplify
Too often practitioners seek to drag marketers into academics. Instead, we need to fold/introduce academic insights into the world of marketing.

For instance, we need to stop using complex jargon like "hyperbolic discounting," "anchoring" and "cognitive fluency" and instead simplify them down to "addicted to now," "better beats best," and "the more memorable the more persuasive."

Normalize
Do not frame this as a total change from existing traditional methods. Clients and agency partners don't want a new system—they want a better system. We’ve had the most success in cutting-edge behavioral economics testing methodologies when we position them as providing the same category norms and equal or better in-market prediction rates as traditional methods, but at a fraction of the cost and speed.

Inspire
Finally, we need to do a better job of showing how these simple principles and improved methodologies are driving best-in-class advertising, advertising that on the face of it defies common sense, but in reality, taps into well-know behavioral economic principles.

The good news is that for the agencies that have embraced behavioral economics, the benefits are multifold. Behavioral economics turns the increasingly fragmented, multichannel world of marketing sub-disciplines into collaborative teams that can easily coordinate, using a common language all oriented around behavior change. It allows us to better explain to our data-driven MBA clients why the storytelling of our MFA creatives is so effective at driving business results. Finally, it allows us to move more quickly, giving us a strong understanding of what consumers find persuasive. And this, in turn, allows us to develop better strategies without the cost and delays required by expensive pre-testing.

Ultimately, if the business of persuasion is to regain its strategic primacy, it needs to better embrace the science of persuasion. A lack of innovation may be one of the key reasons behind agencies declining influence.

As agency leaders, we need to do a better job popularizing the latest insights from the psychological sciences. We've known their importance for 100 years; the time for inaction is running out.

—John Kenny is the chief strategy officer of FCB Chicago.