In such a competitive context, advertising is one of the crucial priorities of every business. Nudge can be a fresh way of advertising.
Stigler (1987) mentioned that advertisements inform the audience about the availability and the quality of a product/service, but advertisers have expanded beyond that advertising context, searching for more creative ways to have an impact.
It is not coincidental that more and more eye-catching advertisements are displayed, trying to hook on the consumer’s mind. Most of us have seen an advertisement that we still recall, even if we don’t like it, because of specific cues (catchphrases, jingles, celebrities etc.)
Why could nudges be applied to advertisements?
Let’s start by defining “nudge”, so we can connect it to advertising.
A nudge is a specific way of choice architecture (the way that choices are presented) that gently pushes the behavior to a predictable point, without omitting other choices or influencing economic motives, according to the relevant field’s pioneers, Thaler and Sunstein.
Based on the aforementioned, we could see the applicability of nudges in advertising. Theoretically, it is the best way to advertise, maybe the essence of advertising itself.
For example, a company that uses nudges can promote its product or service, directing the consumers to the much wanted behavior of buying, without depriving them the right to choose another product or service. Under this scope, it could be said that the advertisements themselves can act as nudges, since they attempt to push the consumers to a specific direction.
Their difference is that advertisements usually try to be more special than others and to lure customers, while nudges are based on behavioral economics’ theories and they direct to very specific actions.
That makes us wonder:
Are nudges used in advertising contexts?
It is worth wondering if and where nudges have been applied in advertising, given their promising results. The scientific literature includes more cases of nudges analysis where they have been use in campaigns regarding social policy and pro-environmental behavior.
For example, there has been an application of nudges in healthcare programs, organ donors, taxes and energy conservation, aiming at directing citizens to the respective correct behavior. There is little information on analyzing nudges in consumer and competitive contexts of advertising. Whatsoever, some website advertisements can be identified as nudges.
Specifically, advertisements that arise from e-commerce direct the buyers on further transactions, based on pages they visited and their existing transactions (in websites of e-commerce, there are columns that suggest to the buyer to buy similar products or to buy products similar buyers visited).
Conclusions
It can be deducted that the use of nudges is one promising technique, worthy of consideration and research, in both social and consumer contexts of advertising.
Based on what you read in this article or on what you already know: Which advertisement or which type of advertisement is closer to nudges and behavioral economics? We would love to hear from you.
Christos Panousis
Researcher and writer for Nudge Unit Greece
~Explaining Behavioral Economics Simply~
References
Hausman, D. M., & Welch, B. (2010). Debate: To nudge or not to nudge. Journal of Political Philosophy, 18(1), 123–136. doi.org/10.1111/j.1467-9760.2009.00351.x
Inman, J. O. Z. (2010). What’s advertising content worth? Evidence from a consumer credit marketing field experiment. Quarterly Journal of Economics, (February), 263–306. doi.org/10.1162/qjec.2010.125.1.263
Newstead, K., Taylor, J., Kennedy, R., & Sharp, B. (2009). The total long-term sales effects of advertising: Lessons from single source. Journal of Advertising Research, 49(2), 206–210. doi.org/10.2501/S0021849909090308
Yeung, K. (2012). Nudge as fudge. The Modern Law Review, 75(1), 122-148.