Today in Digital Marketing - Manipulating Consumers with the Truth

Episode Date: April 15, 2024

Tod speaks with Dr. Cat Armstrong Soule who co-authored a marketing research paper about how marketers should use numbers and percentage in marketing copy. The paper is called “Manipulating Consumers with the Truth: Relative-Difference Claims in Advertising and Inferences of Manipulative Intent.”Since Mondays tend to be slow days for actual marketing news, we're experimenting with these long-form interviews on Mondays. Do you like them?- YES, I like the weekly interviews on Mondays- NO, I prefer the daily-news format on Mondays📰 Get our free daily newsletter📈 Advertising: Reach Thousands of Marketing Decision-Makers🌍 Follow us on social media or contact usGO PREMIUM!Get these exclusive benefits when you upgrade:✅ Listen ad-free✅ Back catalog of 20+ marketing science interviews✅ Get the show earlier than the free version✅ “Skip to story” audio chapters✅ Member-only monthly livestreams with TodAnd a lot more! Check it out: todayindigital.com/premium✨ Already Premium? Update Credit Card • CancelMORE🆘 Need help with your social media? Check us out: engageQ digital📞 Need marketing advice? Leave us a voicemail and we’ll get an expert to help you free!🤝 Our Slack⭐ Review usUPGRADE YOUR SKILLSInside Google Ads with Jyll Saskin GalesGoogle Ads for Beginners with Jyll Saskin GalesFoxwell Slack Group and CoursesSome links in these show notes may provide affiliate revenue to us.Today in Digital Marketing is hosted by Tod Maffin and produced by engageQ digital on the traditional territories of the Snuneymuxw First Nation on Vancouver Island, Canada.Our Sponsors:* Check out Kinsta: https://kinsta.comPrivacy & Opt-Out: https://redcircle.com/privacy

Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today,

starting at $19 per month at zensurance.com. Be protected, be Zen. It is Monday, April 15th. Today, a deep dive into the world of marketing numbers. No, not ad metrics or website traffic, but literally how your marketing copy should use comparison numbers. For instance, would you say your allergy medicine reduces symptoms in 90% of people compared to your competitor, which only does it in 80% of people? Or do you promote the relative difference? That choice could impact your sales. So which is the right way to use comparison numbers in product marketing? That is what our guest Kat Armstrong Sewell set out to discover.

But before I introduce her, you may have noticed that we've been doing these interviews with marketing scientists on Mondays lately. That's partly because Monday is the slowest day for news in our space. What we want to know is, do you like them? Do you like these exclusive interviews on Mondays? Or would you prefer the regular daily report Mondays, even if they're a little shorter than the other days? You can vote right now by swiping over to the show notes in your podcast app and tapping one of the two options, or there's a web option as well. If you like these interviews on Mondays, go to b.link slash option one. That's the digit one.

And if you don't like these on Mondays, go to b.link slash option two. Again, that's O-P-T-I-O-N and then the digit two. And yes, we have tracking to prevent duplicate votes. So no cheating. Back to Dr. Armstrong Sewell, who with her colleagues have published a research paper called Manipulating Consumers with the Truth, Relative Difference Claims in Advertising and Inferences of Manipulative Intent. I spoke with her last week and started by asking her what they set out to study.

We set out to really think about the way that people and consumers process numbers in advertising and other marketing messages. So the way that marketers make choices around how to convey numbers in their messaging and then in turn the way that that's perceived by consumers and how consumers may or may not fully understand the actual value that's getting communicated based on the way it's being presented. And so the primary example in your paper was around describing the difference in a percentage. Can you talk about that? Yeah, so a lot of times in advertising claims, you'll see information about improvements or in our case specifically,

what we look at is risk reduction. So for products, particularly meaningful ones like prescription drugs or safety related products, a lot of times a marketer might want to say why their product is X amount better than an alternative. And so specifically in this project, we're looking at ways of numerically conveying changes in like efficacy, how good a product is, or how much safer it is, or looking at different outcomes, but looking at a change between using a particular product and the focal product

that's being advertised or communicated about. And so the idea is that if something improves the product by 5%, and then it improves it again, or the competitor improves it by 5%, and then your product improves it by 8%, your paper studied what the consumer preference on whether they reveal those percentages or whether they talk about the difference in percentage. Yeah. So there's two basic ways and the paper is kind of jargony, so I'm going to try to make it less. I appreciate that but um the there's two main ways to present the differences and it has to do with what you were saying about the baseline risk and so people can make choices about whether to just show an

absolute difference so like for the the focal example we that really got us excited about working on the project at all is a real world example about a youth football helmet. So out of 100 kids that play football, if they use a traditional helmet, eight of them get a concussion. If they use this new helmet, only five of them will get a concussion out of 100. And so they could make a choice about saying, oh, there's a 3% reduction in risk because you're going from 8% to 5%. Or they could use a percentage change format, which is called a relative risk reduction. And that's often almost always what we see in advertising, which would be the 8% minus a 5%, but then it would be over the original risk. And that makes the difference numerically much larger. Right. So it would say like a 30% reduction. Exactly. So it's the same numbers and they're both mathematically accurate and kind of factually true, but they look really different. reduction information is always categorically face value smaller, sometimes a lot smaller, as compared to a relative risk reduction, which is quite a bit larger. Which do consumers prefer?

That's kind of an actually complicated question. And actually, one of the reasons why we really wanted to research it, because previous research we've done, not in this project in particular, but and other researchers as well, have shown preferences for the relative risk format in many ways. So if you're just looking at how people evaluate a product, they tend to evaluate the product more positively when they see the relative risk, the larger face value. One, probably not surprising. But also when you're asking, like, what do they prefer? It's not just that it influences how to understand, which is a little bit ironic because it's actually not possible to fully process that information if you don't have the baseline. So it's kind of like consumers like it because it feels easy, but it actually isn't.

Isn't that something that we as marketers are doing now anyway? Like, are there any marketers that are providing the baseline, you know, 5% and now it's 8%? Are there examples of products or categories where that decision is made? Yeah, that's a good question, too. So the FTC encourages, you know, with their guidelines for advertisers to always disclose baseline risk information. So they recommend that if you are using this kind of format, you should be including or at least sharing like a link. Often in an online situation, you'll see like, click here for more information, you know, on how this claim was created.

And then you can kind of get access to all the actual numbers that go behind it. But you also see even embedded within marketing messages, sometimes like in fine print, they'll, you know, give information on the actual study itself where the numbers came from, and that often will include the baseline. But that's buried, isn't it? Usually it's under like a like an asterisk or a link click out. Yes, yes, it is. And, you know, connecting back to your first question, even when that information is included, that would help a consumer actually take the proper meaning from it. So say they use a relative risk claim and they say, oh, this helmet reduces risk of

a concussion by 32%. And then real small down at the bottom, you know, if you zoom in, you can read the actual baseline that should help a consumer more accurately perceive that claim that actually consumers report they don't like when that's included, even though that's what we, you know, think is in their best interest to disclose that information actually kind of acts like a signal where consumers start questioning and have to think about processing and how the numbers were calculated and all that. I don't want to sound like the greedy marketer, but I mean, that's consumer preference. What sells better?

Yeah. And that's actually probably one of the big takeaways of the paper. And actually, some of my co-authors and I have had this conversation a lot for decades of like, well, they're both accurate. Is this a deceptive practice or not when you can show that they're real? And to your really pointed question, the outcomes that we're looking at are like, how good is this helmet? How likely would you be to buy this helmet? The relative risk disclosure is better on those dimensions. It's just really... Relative risk meaning which version? I'm sorry. So the larger version that shows the percentage change without the baseline information. So the larger claims 30% would, you know, sell more helmets than saying a 3%, even though, you know, could this be considered to be kind of a non-deceptive version

of manipulation of consumers, even though it's good for these marketing outcomes? Is it respectful to consumers? Is it appropriate when consumers are being, their responses are being systematically biased by this presentation format? Do you have business insurance? If not, how would you pay to recover from a cyber attack, fire damage, theft, or a lawsuit? No business or profession is risk-free. Without insurance, your assets are at risk from major financial losses, data breaches, and natural disasters. Get customized coverage today, starting at $19 per month at zensurance.com. Be protected. Be Zen.

Is there a way to get the best of both worlds where, you know, we're disclosing the, I guess it would be the absolute numbers, the real numbers, but still somehow getting the benefit of that large percentage? Yeah, that's a really good question. I think that some of the research would indicate that showing both, and we have this in the paper too, that it doesn't hurt the good consumer outcomes of purchasing the product to include that baseline information. Really, our concern as researchers is just more the consumer's inability and lack of motivation to actually process that information. And really this project- Are we saying they're dumb?

No, no, I don't think so. I mean, we also do test something where we teach consumers how to do the math. I mean, I love consumers and I would never say something like that. And we are consumers as well. Yeah. And I'm a consumer actually, so I would never say that. But I do think that, you know, we know that consumers do a lot of superficial processing. We know that there's a large level of innumeracy in the population. I don't think that means people are dumb.

I just think it means that they don't have the skills and are not properly motivated a lot of times to actually implement the skills to do the statistical work to process it properly. I know you didn't study this particularly, but do you have a gut feel on which industries or product categories where this effect might be the opposite, but in any category, if you were kind of talking about the difference in the opposite light where you'd want to make the difference look small, that would find the opposite. Like, for example, I'm just thinking of like a price change, you know, like where an increase is negative. Or if you were talking about your competitor, and so you were talking about that they had a decrease, I guess you would see the mirror response there. What made you want to study this?

Well, I am a researcher who's really dedicated to consumer protections. And I have spent a lot of time thinking about numerical processing and systematic biases that consumers have. And I think this one is particularly an issue because we see these kinds of claims and maybe less impactful, like paper towel, you know, more absorbent types of increases, but you see it a lot. It's just really pervasive in prescription drug advertising. And like I said before, like safety related products. And, you know, those are the things where the products are really expensive and the potential negative impact for consumers is really high. side effects or really important efficacy related information if you're talking about heart disease or, you know, all sorts of medical things. And so to me, it feels like a very consequential kind of context that you see it in a lot. So I guess definitely from a consumer welfare, consumer well-being protection angle of trying to understand if there even is a way that those types of claims can be used in an ethical, responsible way as marketers

versus making sure that consumers are making the best consumer choices for themselves. What surprised you the most about what you discovered? I think, you know, for years, the surprise has been how historically difficult it's been to What surprised you the most about what you discovered? pointed a researcher has to be about getting a consumer to really think about the numbers i guess maybe like the the uh avoidance consumer avoidance of wanting to do math and really process i think that that's probably been the biggest surprise of like results after results of being like you you know, we've explained how you calculate this and we've shown how it's used and we see the change of numbers and consumers being like, that's too complicated. I don't want to, don't want to deal with that.

You had co-authors on the paper. Who were they? Yeah. So, um, my, the first author of the paper is Dr. Bob Madrigal. He was my advisor at University of Oregon. And now we've been working together for, like I said, over 10 years. And also my colleague, Jesse King, who is now at University of Montana, and also was a doctoral student with me way, way back when. So, you know, like I said, we've been working on the project for a long time. Well, it's really interesting research. It's, I think, really important as well to kind of see how everything shifts, especially in a world where inflation and shrinkflation is making those numbers move quite a bit. I'm delighted you were able to share it with us.

Thank you for your time. Oh, yeah. Thank you so much. Really appreciate it. That's Dr. Kat Armstrong Sewell. The paper she co-authored is only a Google search away. You're looking for a paper called Manipulating Consumers with the Truth, Relative Difference Claims in Advertising and Inferences of Manipulative Intent. Again, these Monday deep dive marketing science interviews are a bit of an experiment. If you like getting these on Mondays instead of the daily update, please visit b.link slash option one.

That's the number one. Or if you prefer the old school daily updates instead on Mondays like we usually do, visit b.link slash option two. Or just swipe over to the show notes right now in your podcast app and click either of the two links there. I'm Todd Maffin. Thanks for listening. See you tomorrow. It's the season for new styles, and you love to shop for jackets and boots. So when you do, always make sure you get cash back from Rakuten. And it's not just clothing and shoes. You can get cash back from over 750 stores on electronics, holiday travel, home decor, and more.

It's super easy. And before you buy anything, always go to Rakuten first. Join free at Rakuten.ca. Start shopping and get your cash back sent to you by check or PayPal. Get the Rakuten app or join at Rakuten.ca. R-A-K-U-T-E-N dot C-A.