How Ads Take Advantage of our Cognitive Biases

While I don’t believe we pay attention enough to psychology in advertising many advertisers have made good use of the science. Below are common and easy to spot examples. Some of them are intuitive but it still helps to consciously add them to the repertoire.

Rhyme-as-reason Effect – Rhyming doesn’t just make things more memorable. It also makes us see them as being more accurate or truthful. The most famous example of this is John Cochrane’s memorable “If it doesn’t fit, you must acquit” defense of O.J. Simpson. Plenty of ad slogans rhyme as well: “A nose in need deserves Puffs Plus indeed”, “Drive sober or get pulled over”, “To save and invest, talk to natwest”.

Decoy Effect – The decoy effect is when an extra option is added to a choice that skews someone’s perception of their relative value and sways them in a certain direction.  One of the best examples of this is the economist’s print and web sale, which was explored in Dan Ariely’s Predictably Irrational. I pulled this old image off another site, since the economist has now changed their pricing strategy after all the publicity.

Economist Decoy Effect

As you can see, the online subscription was offered for $59 and the print option was offered at $125. But, the third option combines the first two. It is designed to pull people from the online option to pay for the print version as well. For the customer this probably feels like a good deal, but many of them probably would have been just as happy with the online subscription only (and  they would be $66 bucks richer too).

Another example involves restaurants and wine. People will typically buy the second lowest priced wine at a restaurant, which has led restaurants to strategically price their options, typically by raising the price of the cheapest wine so that it becomes the second cheapest thereby increasing their profit margins. It’s worth mentioning, since we’re talking about biases, that a lot of wine’s taste actually comes from perception of quality rather than inherent characteristics, so it actually might not matter to the consumer that the prices are rearranged.

Picture Superiority Effect – We are better at remembering images than words. In general this means products are going to be easier to sell than services. Either way, finding an image to say what we need to say is a winning strategy.  

That’s why verizon chooses to show you their coverage rather than tell you about it:

Verizon Coverage Map

Framing Effect – You could probably consider the Decoy Effect to be a component of the framing effect. Indeed, almost all of marketing can be attributed to the Framing Effect: How you say something has a big impact on the results of advertisements, even if the information conveyed is the same. 

Are you more likely to buy a package of beef that says “80% lean meat” or one that says “20% fat”? They convey the same information, but I know which one I’d put money on.

Anchoring – The first piece of information we receive about something affects the rest of the information we receive about it. That is, once an anchor is set people don’t tend to move from it as fully as they should. For example, quantity limits can be used to increase sales. If you’ve ever seen a sale that included a maximum limit of the good people could buy that limit actually carries information to us about how many people should buy. It’s creates a starting point for the number we should purchase that is likely far higher than we would have without it.

Anchors can also be set for the amount of something that should be used. You only need to use about a pea-sized shape of toothpaste, yet most people cover the entire brush because that’s what they show in the ads. There’s also the example of Alka-Seltzer, when they started advertising using two tablets sales increased dramatically

Bandwagon Effect or Herd Instinct – Normally in advertising this is exploited with an appeal to the popularity of the brand. It’s not always bad as surely many category leaders are good products, but it does work off our bias to trust in other people’s opinions when we aren’t sure (herd instinct) or off our attempts to fit in (bandwagon effect). 

Any brand trumpeting their success is probably operating on one of these biases. McDonald’s makes very good use of them:


Loss Aversion – We are more averse to losing a particular amount of a good than we are receptive to gaining that same amount. The best example of this deals with blood donations where individuals told to focus on saving lives were significantly less likely to donate than those told to prevent deaths.

Functional Fixedness – Functional fixedness is the idea that we are incapable of seeing alternate uses for products once their established purpose is known. The concept plays a role in quite a few riddles. It’s also a common topic for listicles  But, it can also be used to boost sales for some products. Imagine Duct tape or Baking Soda starting out. They’re each only used for one purpose each, but as time goes on the companies educate us on additional ones. What do sales do? Skyrocket, of course.

Samsung Galaxy S3

“The Next Big Thing is Already Here”

I’m going to disclose upfront that Samsung’s Galaxy S III commercial is one of my all time favorites. I remember the first time I saw it. When it was over, I was standing saying to an empty room, “That was f***ing amazing”. No other ad has ever struck me in the way the Galaxy S III’s did. The thing is, the ad didn’t just generate a lot of buzz, or attack Apple, or promote the S III. In a minute in a half, it did all of that and so effectively that it contributed to record sales.

We could break the commercial down a few different ways, but I think it’s most important to look at what Samsung was doing with positioning. I’ll always believe that part of the reason the iPhone took off, at the expense of Blackberry, was that the Blackberry became seen as a product that kept people working while they were away from the office. The iPhone, on the other hand, offered people a chance to play while at work. Even as top dog in 2012, Apple was benefiting from the rebellious brand image it cultivated in the 80s. It was still seen as young, hip, and counter-culturish. In fact, at the time Apple’s commercials against Microsoft still promoted this idea.

But, of course, the iPhone was undoubtedly the category leader, and Apple’s omnipresence was becoming a liability to its rebel brand image. This point is exactly what Samsung wanted to attack, while simultaneously marking their technology as outdated.

To do that, Samsung shows long waiting lines at several locations painting the iPhone (appropriately) as mainstream. Sandisk tried to knock Apple off years before by exploiting the “iHerd” mentality. Samsung builds on that. In their commercial, the iPhone users are uninformed and their ranks are being filled by parents and grandparents. The iPhone fans are also talking about really insignificant changes as the big draw for the new release (which was credible, because the 5 didn’t offer a big leap from the 4S).

It takes 30 seconds before we even see the S III and even longer before they begin to talk about its advantages, but it’s done in a way that serves to pique our interest and sets up a comparison of the products. It becomes the S III that is creating buzz and is buzzworthy.  As I said, the ad is credible: it doesn’t attack the look of the iPhone, which has always been an advantage, for instance, but instead attacks its size, its market, and its technology. Then it wraps up with a summation that stresses all of these things “The Next Big Thing is Already Here”.

But the reason I love the ad is that Samsung doesn’t tell us all of this. It shows us. This is important because when people already have information they tend to hold on to it in the face of contradictions (you can look into cognitive dissonance or at Ries and Trout’s Positioning: The Battle for Mind for background on this bias). Rather than outright contradicting our brains, which would be met with cognitive resistance, the commercial forces us to compare the products and attempts to reframe how we think about them. It wants to be seen as cooler than the iPhone and technically superior. You’ll notice that it doesn’t compare its design or layout with the iPhone (which it would probably lose on), and it didn’t discuss its lower price point either because of the general belief that a higher price equates to cooler and technologically superior items. Instead of being a selling point, mentioning that could actually erode the S III’s position as the hip alternative to the iPhone.

Generally, it is unfortunately hard to track ads sales successes from outside of the product’s company. However, this ad was successful enough both the S III and S 4 set sales’ records after this campaign was launched.

If you want to read more case examples on successful competitor repositioning: Here’s an analysis of Tylenol’s brilliant campaign.

Why isn’t humorous advertising more effective?

Humor is the copywriters go to strategy. In fact, according to Millward Brown more than half of TV advertisements use humor. Yet on a wide variety of measures these campaigns are ineffective. As Mark Levitt of Partners and Levitt summarizes,  “Humor in advertising tends to improve brand recognition, but does not improve product recall, message credibility, or buying intentions.”

Unfortunately there isn’t much research available on the topic. While the general consensus is that humor doesn’t help much, a few studies have shown that humor is effective for lower engagement products. We can start by stating that humor is overused, then, since it is used in campaigns for more expensive purchases all the time. But, there is a second factor that we should consider, as well. Humor, when it is studied in advertising, is treated homogeneously, but it shouldn’t be because it actually breaks down along two distinct dimensions.

Let’s compare two ads to get a feel for the different styles.

As you’ll notice, one ad wants us to find humor from somebody using their product, while the other one wants us to find it from someone not using their product. A second difference is the degree to which the humor relates to the benefit the ad tries to convey – does it reinforce the point or is it really there to get attention?

From a psychology and branding perspective, using humor that puts your brand or product in a bad light is a bad idea. That’s why the “Jake from State Farm” commercials are an example of the wrong type of humor. Using State Farm’s product creates a negative experience for the customer in the ad – it causes an unpleasant interaction with his wife. That may raise our awareness of State Farm but how could it increase our intention to buy? Many people would view the ad as a success because it has staying power and entered our cultural consciousness in a way that few advertisements do. But the actual barometer is long term sales. Does the ad make us more likely to use State Farm? I doubt it.

On the other hand, the Berlitz ad makes us laugh at people who don’t use their product and the humor also reinforces the product’s benefit.  Our awareness of Berlitz rises and we become more likely to use Berlitz because it resolves the situation we are laughing at.

It’s a simple but key distinction. In an advertising sense, to be effective humor doesn’t need to improve an opinion of a brand (we think State Farm is funnier now but that doesn’t make us want to use their service) it needs to effectively highlight the brand’s benefits and make us more likely to purchase it. Audi’s ‘Grandpa Bode’ commercial is another good example of a humorous ad for those reasons. Celebrity endorsement aside, it is effective. 

Moving forward, humor shouldn’t just be inserted into a commercial to raise its memorability. That may get views but it won’t sell product. But ads using positive brand humor, that is focused on the selling point, may prove to be more beneficial.

Celebrity Endorsements are the worst. Why do so many companies use them?

Celebrity Endorsements are the worst. Why do so many companies use them?

If you spent any amount of time in front of a screen today you probably saw a celebrity endorsement. Chances are you were also completely unaffected by it. While celebrity endorsements are an extremely popular advertising technique, they are also generally ineffective.

This should feel a little odd. Advertisements with celebrities are more likely to be shared or talked about so they’re likely to have increased viewership. So what do they do wrong? Well, actually, there are a few of things. Advertisements with celebrity endorsements do achieve higher engagement than comparable non-celeb ads, but they aren’t any better at helping consumers remember the brand. Basically, celebrities draw attention to the ads, but they typically draw attention away from the product and to themselves. This is known as the ‘video vampire’ effect.

Another psychological consideration is that consumers attribute the celebrity’s endorsement to the money paid to the celebrity instead of to underlying qualities in the product itself. One assumes this is particularly true when celebrities and brands occupy very different positions in our brains and that is often the case. Rob Lowe and DirecTv, Ozzy Osbourne and I Can’t Believe It’s Not Butter!, and Penelope Cruz and Nintendo are all good examples of this. Ozzy Osbourne in particular was probably chosen because the randomness would generate buzz, but since he doesn’t share many attributes with the brand that buzz probably didn’t convert into long-term product recall or improved sales.

The inherent “otherness” conveyed by celebrity is another drag on success. Social proof states that in uncertain situations people pay attention to others who are similar to themselves for tips on how to behave. That’s why brands often include actors in their commercials who are similar to their target market. When a celebrity and a brand (or the brand’s target audience) are mismatched it feeds the wrong information to potential consumers. Think about that in the context of Gameboy and Penelope Cruz. Gameboy’s target audience is presumably young boys. Ignoring her celebrity, the message Nintendo sends by using her is that the product is for middle-aged women. That, in itself, is mistaken, but if you add in the layer that she is a celebrity you have to take the mismatch one step further.

This isn’t to say that celebrity endorsements can’t be effective. In fact, that extra step can be a good thing for aspirational marketing. But, as in Nintendo’s case, brands often make a poor choice of endorser and the advertisements are more expensive. A more careful selection of celebrity (one who doesn’t endorse anything else, will stick around for a long time, and who closely matches the existing brand identity) will help these campaigns. Audi’s Grandpa Bode commercial is one I’ve always liked because it intimately relates the traits we identify him with to the product benefits conveyed by the advertisement.

Still, even with those changes, it might not be worth it for most brands. After all, as I’ve previously written, brand mascots (e.g. Verizon’s “can you hear me now” guy, the Geico gecko, or Flo from Progressive) play a similar role for businesses and they don’t present the same worries about potential legal trouble. It’s also worth noting that non-celebrity endorsements (AKA testimonials) are effective, and cheaper than celebrity endorsements.

In summary: Celebrity endorsements are dumb, but don’t expect them to go away any time soon.

Tylenol repositions the competition

“For the millions who should not take aspirin”

As anyone in marketing can tell you, unseating category leaders is difficult. That’s why Pepsi has trailed Coca-Cola for decades and why Tide has remained the leading detergent since the 1940s. It’s not impossible though, and one of the best ways to advertise against a category leader is to use their brand presence in your own favor. The best way to do that is to run a repositioning campaign.

In essence, repositioning the competition requires comparative advertising, but it is not simply comparative advertising. Comparative ads evaluate products side-by-side. Repositioning ads try to take an attribute of the competitors product and shift it into a weakness.  Then they show how their own product fills that gap. Most of a repositioning advertisement should be devoted to your competitor’s product, and not even the product as it exists in reality, but as it exists in the mind of consumers. Only once the ad has succeeded in framing their competitors’ products attributes as weaknesses do they introduce their own product. One of the most famous repositioning campaigns was done by Tylenol. In this advertisement Tylenol isn’t even mentioned until the third paragraph!


Let’s take a closer look at the ad. “For the millions who should not take aspirin” is a very interesting line. Many people today are still unaware of the differences between over the counter analgesics, before this ad even fewer were. It’s interesting because it’s alarming enough to draw in the uninformed. Notice, too, that the ad doesn’t say Tylenol is better than aspirin. It doesn’t even directly say that Tylenol is better for the stomach. Right now, it’s only saying some people shouldn’t use aspirin. It’s avoiding those comparative statements because comparative statements can conflict with consumers pre-held notions, and if they do they are likely to get dismissed.¹ Instead, the ad tries to convey new information – the instances in which taking aspirin is detrimental and, as it builds that case, it lets the consumers decide for themselves that Tylenol is better. That’s the essence of repositioning.

Remember, Tylenol was doing more than just creating niches for itself to occupy, which can also be an effective way to gain market share. Instead, it went beyond that strategy, put those holes together, and used them to reposition aspirin as a brand that was harmful to the stomach. In fact, Tylenol was so successful in conveying this information that it gained considerable market share and eventually the product actually displaced the aspirin-based medicines and became the best selling analgesic.

1. This is the result of confirmation bias which causes people to seek information that confirms their opinions and to dismiss information which contradicts them.