My Blog: Serious stuff

Since seeing Rory Sutherland talk last week, (here) I've become somewhat obsessed with behavioural economics and choice architecture. The thinking behind behavioural economics argues that the human animal is hard-wired to make errors when it comes to decision-making, and therefore people need a little "nudge" to make decisions that are in their own best interests. This is where choice architecture comes into play. Rory Sutherland is championing this as the change that advertising agencies need to embrace in order to add real value to an agencies role in their clients future, and therefore in advertising agencies future as a whole. It's a refreshing take on the message we've become accumstomed to hearing- adapt or die. Instead of championing digital or viral or any other media as the saviour of advertising it takes a look at what really matters, people. People don't change, technology always will. Behavioural economics is a real science that investigates our mentality and our likelihood to change/adapt/make decision. I've come across some very interesting blogs and articles I think are worth sharing. Campaign, gives a good synopsis of Rory's thoughts on why advertising needs behavioural economics. Nudge blog also expands on his thinking. NPR.org gives great examples of how behavioural economics and choice architecture can change behaviours and mindsets. And it might be worth mentioning that the Obama admistration has been evoking the power of behavioural economics in both its admistration as well in the election campaign. 'Time' reports on "How obama is using the science of change".

This morning I had the pleasure of listening to none other than Rory Sutherland giving a talk in the National Gallery of Ireland. And what a treat it was. I left feel completely inspired and utterly depressed, more so of the former (hopefully). How does he do it? If you ever have the chance to go see Rory, grab it. He won't disappoint. The teeny pic to the right is that of Rory captured in true iphone camera fashion- blurry.
Here's some of his thoughts and recommended reading:

Key points:

Value is subjective. Advertising retrieves value rather than adds it as things become more and more available, thus losing value. People value scarcity.
Advertising retrieves the value of mass produced products.
Change peoples choice architecture and you can change their decision.
Advertising which says more, says less.
Persuasion is better than compulsion. Be an advertarian.
Self evident interest in a message defeats the purpose. People see through it.
Agencies can add value to companies for clients without a production budget.
Trigger moments for change – the occasion / event determines the subject’s response more than the message does because they will be more receptive to messaging at certain times and in certain contexts. Target by moment or context rather than just demographics.
Consumer buying behaviour / psychology is both oblique and disproportionate. Disproportionality is the small, eccentric things you do that make a huge difference.
Good definition of our business: turning human understanding into business advantage.
Any business that has a consumer interface needs creativity.
We are evolutionarily programmed to notice the small things. Oddities can contribute / deliver more meaning.
Default bias – people’s behaviour is harder to change than their attitudes because people are most comfortable with what they’re already doing.
Cookie jar accounting – nice idea for how consumers justify purchase decisions on the basis of other purchase decisions foregone.

Behavioural Economics

Rory Sutherland. "Leadership in Difficult times - it is not an option to do just nothing."