Hill+Knowlton Strategies

MINDSPACE (Dolan et al., 2010)

+  +  +         #2  Incentives         +  +  +

Incentives can be a powerful tool in harnessing the power of the public – engaging people and motivating behaviour change. The impact of incentives clearly depends upon factors such as type, magnitude and timing of the incentive. In a competitive economic environment brands are increasingly using incentives to attract consumers and stand out from the competition.

The power of incentive

Brands in the service industry – such as high-street banks, mobile phone network providers – are using incentives and rewards to become more attractive to consumers. However, the behavioural economic insight loss aversion is important in order to understand how best to use incentives in marketing. Loss aversion is used to explain that we dislike losses more than we like gains of the equivalent amount. What this means, for example, is human beings feel the loss of losing  £1 more than we feel the elation of being given £1. Therefore, brands that emphasise the money (or reward) that people will lose out on by not taking an action/purchasing can have a more powerful impact and motivation on people’s behaviour, rather than simply highlighting the amount they could be given if purchasing.

Brands in the fast-moving consumer goods industry consistently have to compete for consumer’s attention. Unilever’s Magnum icecream is an example of a brand currently (April 2013) using incentives as a marketing strategy to drive sales and engage consumers. The incentive Magnum is giving consumers is the chance to win a designer handbag worth £800 every day. However, now understanding loss aversion, if Magnum had framed the incentive in a way that consumers feel that they are losing out if they do not purchase, then this could have a more powerful impact on people’s behaviour to drive sales. Although, the type and magnitude of the incentive of a £800 handbag could be significant enough in itself to demand attention from some consumers. Furthermore, people have a habit of over-weighing small probabilities – for example lotteries – and so consumers may over-weigh the small chance of winning the handbag.

Magnum - win a designer handbag everyday

Another example of using incentives to engage a community is ConAgra Foods. In order to increase engagement on it’s Healthy Choice Facebook Page, users who “liked” the brand received a coupon for 75 cents off their next Healthy Choice purchase. ConAgra then coaxed more consumers to join its Facebook page by dangling a “buy one, get one free” coupon offer. In other words, the coupon’s value grew as more consumers joined the page.

However, a fundamental problem with using incentives, is that once an activity (such as buying a Magnum) is associated with external reward (chance to win a handbag), then individuals are less inclined to participate with the activity in the future without further incentives. Furthermore, and worst still, is if a brand fails to deliver on a reward/incentive – an example would be Red Bull’s VIP trip of a lifetime to the Belgium Grand Prix Competition. Red Bull was censured and criticised by the Advertising Standards Authority (ASA) in February 2013 after sending competition winners on a budget trip across three countries, making them share a bed and then sending them home early after they were barred from entering the race’s VIP enclosure.

Incentives - influencing behaviour and engaging consumers

In summary, incentives can be a useful tool to engage people’s behaviour – and the impact of the incentive depends upon type, magnitude and timing. People have a habit of over-weighing small probabilities, meaning competitions can be effective. Losses loom larger than gains, and so framing incentives to consumers in such a way that they feel the loss if they don’t participate can be a powerful communication and marketing tool. However, if brands become associated with external reward/incentive then consumers can be less inclined to participate in the future without these external rewards/incentives.

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This is the first in a series of nine blog posts which takes inspiration from a Cabinet Office commissioned report entitled MINDSPACE. The report sets out nine of the most robust (non-coercive) influences on our behaviour, which is captured in the simple mnemonic MINDSPACE:

MINDSPACE (Dolan et al., 2010)

The vast majority of government public policy aims to change or shape behaviour – changing or shaping behaviour and inspiring or engaging people is often a perquisite of many of the work we do for clients at H+K. “Hard” instruments such as legislation or regulation is the most effective way for policy-makers to compel us to act in certain ways. However, these instruments are not readily available, of course, to PR professionals aiming to change people’s behaviour and attitudes towards detergents, gin, football boots and the like – “hard” approaches are not appropriate. Policy-makers are increasingly turning to less coercive measures, such as incentives and sophisticated communications techniques, to change and shape behaviour. These less coercive approaches, summarised by MINDSPACE, are directly applicable to the work we do in marketing, advertising and communications. My series of posts in the coming months will work through each of the influences outlined in the MINDSPACE framework, giving examples and explaining how the framework is applicable to our industry.

+  +  +         #1  Messenger         +  +  +

The way we respond to information depends greatly on the reactions we have to the source of that information.We are heavily influenced by who communicates information. Whatever our considered judgment about the value of a message, we automatically give it more or less weight according to the messenger. For example, we are often swayed by authority that has associations of expertise: public trust in expert public sector workers like doctors and teachers is much higher than for politicians.

Brands understand the importance of ‘the messenger’ with regard to influencing consumer choices and driving sales. Celebrity brand ambassadors are effective marketing techniques, because who communicates determines the consumer response and engagement to brand messages. Marketing spends are increasing in budget for the celebrity brand ambassador - PepsiCo struck a $50 million deal with Beyonce to be Pepsi’s brand ambassador.

Beyonce - Pepsi Brand Ambassador

Of course there are plenty of notable examples in UK/global brand marketing campaigns, and include Walkers veteran Gary Linekar, Marc Jacobs and Taylor Swift for Diet Coke, and Blackberry and Alicia Keys. However, sometimes brands can get it wrong – Alexander ‘Hooray Henry’ Armstrong was dropped in 2009 after 7 years as Pimms brand ambassador, reportedly for being ‘too posh’.

Brad Pitt - Chanel No. 5

In order to quantify and qualify the use of celebrities in marketing campaigns it is important to evaluate their awareness, appeal, and relevance to a brand’s image and the celebrity’s influence on consumer buying behaviour. Advertisers are using celebrities for voice overs, and public relations + communications agencies understand the importance of influential celebrities to engage and shape behaviour. Harnessing the power of celebrities social media platforms can be a very powerful marketing tool. We saw that this week at H+K in which Ricky Gervais and Stephen Fry’s Twitter accounts generated a huge amount of consumer engagement with a hashtag campaign for our client Aviva.

Post your comments below on which celebrity brand ambassadors you think are the good, the bad and the ugly!

Follow @AndrewPCBarratt

Hello – I’m really pleased to be a contributor for the H+KStrategies UK London Blog. My name is Andrew, and I have recently started at H+K on the graduate scheme. I will write a couple of blog entries about the graduate scheme – students and those starting a career who want the best start to the PR + Communications industry watch this space!

The majority of my posts however will be on behavioural economics. Behavioural economics is delivering very interesting insights and is something I find exciting and topical. As means of an introduction, behavioural economics is somewhat an umbrella term for a range of approaches that seeks to understand and explain the effects social, cognitive and emotional factors have in influencing the choices and (economic) decisions of individuals and institutions.

Behavioural Economics - an umbrella term

Why I find behavioural economics so interesting, and why it is so popular across the advertising, marketing and PR service industry, is that it provides the framework and insights to better understand people and the way people behave. Therefore behavioural economics can be an incredibly useful tool because it can assist in better understanding the ‘public’ and provide the structure in which to devise the most effective strategies to shape and influence conversations.

There are various ways in which social, cognitive and emotional factors influence choices and decisions – such as loss aversion, framing, status quo bias or simply not putting in the mental effort to make the right decision!  Check back here for my blogs, which are going to give a range of examples to show how these different factors and behaviours influence choices and (economic) decisions.

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Yesterday, I went over to Google for a different kind of APG event. Titled “Dark Arts of Digital: Video Masterclass,” this hands-on session covered the practical principles of YouTube. We all know how important video is in content marketing. And, in the never ending quest to uncover the secrets of what makes something go viral, it’s smart to hear directly from the people that own the data.

The best part of the day was making, uploading and annotating our own video. Unfortunately, we didn’t get to play in the YouTube creator space studio, but I’ve had a tour of it earlier and it is enough to tempt you to into vlogging full time. However, it was the following tips from the YouTube experts that are of most value to our work with brands.

Not surprisingly, Authentic Content (aka a video made specifically for YouTube or online viewing) works best. They listed these five winning categories below: Read the rest of this entry »

I once read somewhere that the oft-cited factoid about goldfish having a memory of just 3 seconds is in fact a MYTH (yes, that’s right – Web Curios, pulling the scales of falsehood from your eyes one lie at a time!). Interestingly (I use the word advisedly), though, whilst our piscine friends are apparently swanning around their memory palaces, we on THE INTERNET are apparently as amnesiac as they come. How else can one explain the TWITTERMOBSPLOSIONFRENZY (yes, it’s a great word, isn’t it? Yours to use for only a nominal rights payment) that erupted over the latest piece of linkbait to be vomited from the online hellmouth that is the Daily Mail?

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March! Spring! Hares! Yes, all of that stuff. Whatever this morning’s commuter rag may have told us, Web Curios is declaring winter over. So there. That’s ok then.

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I AM BORED OF FOOTBALL. Or at the very least the in-no-way-criminal, potentially racist / definitely racist, stroppy foreigner elements of it. Does anyone remember when football used to be a fun distraction from the woes of the world rather than a major constituent part of said woes? No, me neither, but there must have been a time. Personally I blame social media.  Could everyone stop talking about the DAMN FOOTBALL PLEASE?

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So we near the end of the first month of 2012 – WELL DONE US. Except that Italian captain. And Tom Watson’s intern. And all those naive enough to believe that the SOPA/PIPA thing has gone away (if those words mean nothing to you then read this). And Snickers. And unwitting singers at American churches. And the Russian police. And Bayern Munich. And Uzbekistan. Everyone else, though, pat yourselves on the back – especially me, who found my very own doppelganger last week! We survived the most depressing day of the year, and from hereon in everything will be just peachy.

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New Year, everyone (I feel that it’s inappropriate to bother with the ‘happy’ charade after nearly two weeks of workaday tedium). Well, it’s been a while. HOW THINGS HAVE CHANGED! A new era has been ushered in, where a man’s political fate can rest on a small-if-perplexingly-executed typographical error, and where said typographical error causes the entire country (or at least the white-collar, desk-bound, twitter-using part of it) to down tools and descend into some horrendous infinitely recursive spiral of non-humour; in which a new way of drinking whisky is almost certainly the first harbinger of the forthcoming Mayan apocalypse;  in which a bunch of apparently sentient adults chose, of their own volition, to spend a night in a furniture warehouse; and, hopefully, in which this particular Italian politician will never again be allowed to make videos.

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Phew. Three weeks since I last did one of these, and my word has there been a lot going on. Bankers have shut down a church (well, you know, indirectly)! The Sun gave us possibly the most tasteless frontpage in years! One of the most appalling hatecrimes of the (admittedly newish) decade was committed to little or no mainstream media fanfare! France and Germany mocked Italy’s sexually incontinent Premier! The filthy rich just keep on getting richer! And loads more besides, much of it even more dispiriting than those few links I’ve just shared.

Ignoring the fact that world is going to hell in the proverbial handcart, though, I’ve actually had rather a lot of fun (because that is obviously the MOST IMPORTANT THING). I’ve seen comedy; I’ve been to an awesome gig;I’ve been to the theatre and seen probably the most harrowing play I’ve ever seen, ever (actually, make that the second-most harrowing - this was probably worse); I’ve eaten some truly tremendous food; and I got to see a truly tremendous rapper live in a tiny venue. So, you know, I’m alright. Are you alright? I’m starting to worry.

Anyway, enough of this. Make yourself a cup of tea, settle down in a suitably confortable chair, and imagine my soothing, dulcet tones reading this out to you (and, if you like, imagine my malcoordinated body acting out every single video too. You pervert). You may want to get some biscuits too; this could take a while.

Image courtesy of Neutron, LLC

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