Sunday, January 24, 2010

Does 9 Just Sound Cheap?

We have all heard of calculating prodigies, those rare souls able to perform astounding feats with numbers. For many of these individuals, numbers have colors, flavors, sounds, or other qualities alien to the rest of us. Mental calculator Salo Finkelstein detested the number zero and adored 226. The Russian mnemonist S.V. Shereshevskii associated the number 87 with a visual image of a fat woman and a man twirling his mustache. This is known as synesthesia, the association of sensory qualities with inappropriate objects. A recent study suggests that most people may have a bit of number synesthesia. It might help explain the mysterious appeal of "charm" prices ending in the digit 9 (as in $19.99).
Research by Keith Coulter and Robin Coulter, to be published in The Journal of Consumer Research, implies that certain numbers just sound bigger than others. This in turn can affect the perception of discounts.
Coulter and Coulter begin by citing decades of research claiming that sounds pronounced with the front of the mouth (long a, e, and i; fricatives like f, s, and z) trigger associations with smallness. (Think of words like tiny and wee.) The vowels pronounced at the back of the mouth, like the oo in foot or goose, are linked to largeness. (Think huge or crowds oohing and ahhing something really big.) Crazy? Well consider how it applied to discounts in the study. Subjects were given "regular" and "sale" prices and asked to estimate the percentage discount. The guesstimated discounts were skewed by the sound effect. For instance, people estimated that a $3 product marked down to $2.33 was about a 28 percent discount. But when the product was marked down to $2.22, the estimated saving was only 24 percent. It was a bigger discount, really, but it didn't seem that way.
One explanation: Three, with a long e, sounds small, and two, with a back-of-the-mouth vowel, sounds large.
That doesn't prove the sounds were responsible. In one of the crucial experiments, Coulter and Coulter tested perceptions of the prices $7.01 and $7.88 with English and Chinese speakers. In English one is pronounced with the back of the mouth, and eight with the front. In Chinese, this is reversed. So were the perceptions of how big or small discounts were. The researchers use this to argue that it is indeed "phonetic symbolism" at work.
"Nine" has a long i, so it's one of the small-sounding digits. Assuming the hypothesis is right, prices ending in 9 would seem a little smaller than they would otherwise, enhancing the quick, largely unconscious perception of a good deal. But 9 isn't unique: it would seem that all the digits from 3 on up have a vowel or consonant sound supposedly associated with smallness. (Ironically, the truly bigger digits sound small. Zero is a problematic case: The fricative z might put it in the small category, but most people say "o" when reciting a phone number, and zeros at the end of a price aren't pronounced at all. $70 is "seventy dollars," not "seven-zero dollars.")
Obviously, retailers want to charge the largest "small-sounding" price (the sound they care about is ka-ching.) From that perspective, the use of 9 makes sense.
This study adds another to the growing list of guesses about how 9-ending prices "work." Coulter and Coulter believe that shoppers must "rehearse" prices — say them to themselves, at least silently — for the sounds to affect them. In the experiments, participants were told to repeat the sale prices to themselves. It's not clear whether this would apply to silent reading of a fast-food menu. Still, the experiment hints at what unexpected layers of meaning we may attach to simple numbers — including the ones with dollar signs.

Coulter, Keith S., and Robin A. Coulter (2010). "Small Sounds, Big Deals: Phonetic Symbolism Effects in Pricing." The Journal of Consumer Research.

Thursday, January 21, 2010

Priceless Trailer a Huffington Post Fave?

In the Huffington Post, Denise Brodey has a piece on book trailers. She praises one of the Priceless videos, which is also is rated #1 by reader votes (for the moment, anyway).

Macmillan did something right when they made the video trailer for ebay guru William Poundstone's Priceless. He has this professorial smart cookie approach that makes him watchable and leaves you wanting more.

Just for the record, I've never thought of myself an "eBay guru." While I'd like to believe Brodey's kind words, I'm pretty sure that the high rating of the video on the Huffington site comes down to three simple words: Star Wars underwear.

Addendum: The Zen of Toilet Tissue

I found in James Vicary's papers at the University of Connecticut a weirdly poetic list of suggested names for a new brand of toilet paper. Some of the names:


Maddest of the “Mad Men” (Part 3)

From today's perspective, James Vicary was looking through the wrong end of the tachistoscope. He assumed, as did those duped by him, that an agent of unconscious influence would have to be a technological marvel, invisible and faster than the blink of an eye. In fact the important kind of “mind control” is human, lo-tech, pervasive, and in plain sight.
By coincidence, Vicary's alma mater, the University of Michigan, was a cradle of behavioral decision theory. This has demonstrated that the act of choosing is subject to all sorts of “hidden persuaders.” In a 1999 experiment, A.C. North, D.J. Hargreaves, and J. McKendrick had a supermarket play French background music one day and German music the next. The research team kept track of the type and amount of wine the market sold. The French music gave sales of French wine a statistically significant bump, and the German music boosted sales of German wine.
If you think this is completely absurd, you are not alone. The researchers interviewed some of the shoppers. Most said they paid no attention to the background music — criminy, who would? It's elevator music! When asked whether the store’s music could influence their choice of wine, the answer was a most definite no.
The music wasn't "subliminal." It was played at the normal volume for background music. Yet the effect was as sneaky as anything Vicary contemplated. Music that no one pays attention to made people buy something they wouldn't have bought otherwise.
You may be saying, "I'd never buy a bottle of Bordeaux just because the store was playing 'La Marseillaise'!" Indeed so, if you despise Bordeaux or have a compelling reason to buy something else. But most of the decisions that fill our days, and our shopping carts, are not so clear-cut. (Should I have another cup of coffee or check my e-mail? Skippy or Peter Pan?) In these situations, as Stanford psychologist Robert B. Zajonc dryly noted, “no cognitive mediation, rational or otherwise, is involved." Environmental factors can then tip the balance.
The effect of such things is statistical, of course. It took carefully designed experiments to prove the effects were real. Today, the digital age is making it easier than ever to do marketing experiments. Google is supplanting Madison Avenue as the toll collector of advertising dollars, bar codes are everywhere, and in today's wired world, everything is quantitative. The practical value of background music may be limited, but there is one ubiquitous, all-powerful persuader: price. Everything comes with a price tag, and those prices affect decisions in ways we don't realize. Few consumers will buy a $400 pair of shoes, unless they're displayed next to $800 shoes (which make them look like a bargain). A rebate or mythic "list price" bewitches buyers into paying more than the logical market value. The new profession of price consultants is advising companies on how to "engineer choices" to extract the most dollars from consumer wallets. This is the brave new world I address in my book Priceless: The Myth of Fair Value (And How to Take Advantage of It).
"Subliminal advertising" was a hoax, but James Vicary posed an ethical thought-experiment for our own time. What if it is possible to persuade consumers to buy without their awareness? The issue, as Vicary's critics noted, is "free will." Yet free will is not quite what we imagined. What we want — and how much we're willing to pay for it — are invented on the fly. These constructed desires are readily manipulated by those who know a modicum of the new psychology. This is as ethically fraught a vision as the one Vicary cooked up, and which Mad Men brilliantly satirizes. But this one’s for real, and we’re only beginning to come to terms with it.

North, A.C., D.J. Hargreaves, and J. McKendrick (1999). “The influence of in-store music on wine selections.” Journal of Applied Psychology 84, 271-276.
Rogers, Stuart (1992). "How a Publicity Blitz Created the Myth of Subliminal Advertising." Public Relations Quarterly, Winter 1992-1993, 12-17.
Warrick, Jeff (2010). Programming the Nation? A new documentary film on the enduring mythos of subliminal advertising.

Tuesday, January 19, 2010

Maddest of the “Mad Men” (Part 2)

Would a successful ad man lie? That was the somewhat incredible question buzzing around Madison Avenue in the fall of 1957. Marketing consultant James Vicary claimed to have the holy grail, a way of compelling the American consumer to buy without any awareness of having been manipulated. He called his invention "subliminal advertising." Invisible yet effective commercials could be inserted in TV programs without viewers knowing it. Advertisers and broadcasters were starting to jump on board, the public was largely aghast, and a very few, in advertising and in psychology, were deeply skeptical.
The serious, peer-reviewed experiments on subliminal perception had involved word games and tasks requiring subjects to judge the expression of an ambiguous face. It was a big leap from that to choosing one cola over another, or choosing to spend money rather than keeping it in one's pocket. Vicary’s claims made a sensation because they met America’s default criterion of significance: money.
Some on-air tests of subliminal ads were not encouraging. In January 1958 the Canadian Broadcasting Company ran an experimental subliminal message during a popular TV show. “Many reported they got up from their chairs during the program to ‘get something,’ but there was no trend in what they got,” Advertising Age wrote. “One CBC executive reported his family’s reactions thus: ‘I felt like a beer, my wife had an urge for some cheese and the dog wanted to go outside in the middle of the program.’”
The FCC was alarmed enough to ask Vicary to demonstrate subliminal advertising in Washington. Vicary complied, but there was nothing to see and no indication that it worked. (After the demonstration, Michigan Senator Charles Potter deadpanned: “I think I want a hot dog.”) Vicary was challenged repeatedly to supply more data. He refused, deferring to the talking point that, “on advice of counsel,” he could not supply details while his patent was pending. A reporter for the Motion Picture Daily was interested enough to contact the manager of the Fort Lee movie theater where Vicary had supposedly conducted his experiment. The manager was curiously evasive and denied that subliminal ads had had any effect on sales. Hofstra psychology student Stuart Rogers contacted the same manager, and this time the manager admitted that no experiment had been done in his theater.
Vicary had separated from his wife in Westchester and taken an apartment in Astoria. In June 1958, he dropped out of sight. He had reportedly emptied his bank accounts and his closets and left no forwarding address. It was rumored he had a made a fortune off consulting fees.
I've always wondered what became of Vicary. In the course of researching my book Priceless, I took a look at Vicary's papers, now at the University of Connecticut. Subliminal ads didn't make Vicary rich. He moved to the San Francisco bay area, apparently hoping to dodge the scandal and reinvent his life. According to letters and resumes, he spent the next few years in a string of jobs, never staying long in any. His Subliminal Projection Company went bust. In 1962 Vicary took a $15,500 position with Dun and Bradstreet, the equivalent of about $110,000 today.
That same year Vicary resurfaced in an interview with Advertising Age. He conceded that “this was a gimmick,” and his data on subliminal ads was “too small to be meaningful.” He spoke wistfully of opportunities lost:

"And for a man who makes a career out of picking the right names for products and companies, I should have had my head examined for using a word like subliminal.… As for those who thought it was all so terrible — well, I had the same reaction when I first thought of it.… But then, as a researcher, I've always pushed on as far as I could. Why, compared to some schemes that have popped into my head, subliminal is one of the most innocent of schemes. The others? Hell, I buried them."


Sunday, January 17, 2010

Maddest of the “Mad Men”

TV’s Mad Men presents the advertising world of the early 1960s as an exercise in moral ambiguity. That perception owes much to Vance Packard’s 1957 exposé, The Hidden Persuaders. Packard describes Madison Avenue's embrace of psychology and psychoanalysis, an era in which cars were phallic symbols and "motivational research" sought to uncover the American consumer's most secret desires. The maddest of Packard’s mad men was perhaps James Vicary (1915-1977). Like Don Draper, Vicary came from a humble background, lost his father (an opera singer) in childhood, and was raised by godparents. He became a Gatsby-like figure, rewriting his life story and rising to power on Madison Avenue as his marriage crumbled. Vicary had a peculiar genius for discerning what the American consumer wanted. Much of his business consisted of devising names for new products. The Dodge “Dart” was his handiwork, chosen after polling such alternatives as the Belvedere, the Proton, and the Zing. Asked to critique the trademark of Bethlehem Steel (also a client of the fictional Sterling-Cooper), Vicary mordantly counseled, “The word ‘Bethlehem’ has warm, religious connotations as well as those of ‘Bedlam’…”
Vicary is best remembered for a diabolical hoax. His long shadow fell over Madison Avenue throughout the Mad Men era and still affects attitudes toward psychological marketing in the age of Google. In Priceless, I explore how the new psychology of decision making has transformed marketing, raising some novel issues of free will. What if the smart retailer is able to persuade the consumer to buy, or to pay more, without any awareness of having been "manipulated"? That question isn't so new, after all. It was raised—loudly—in Vicary's time.
It all began on the afternoon of September 12, 1957, in a small mid-Manhattan office. At Vicary's invitation, about fifty press people watched an underwater documentary, “Secrets of the Reef.” Hidden in the film were ads for Coca-Cola, flashed on the screen for 1/3000 of a second. For that Vicary used a tachistoscope, a high-speed slide projector widely used in post-war psychological experiments. Though the ads were inperceptible, Vicary claimed that they worked. He said he had done an experiment flashing similar split-second ads for Coca-Cola and popcorn at a regular movie theater in Fort Lee, New Jersey, showing the film Picnic. The ads boosted concession stand sales of Coke 18 percent, and popcorn 58 percent. Vicary had founded a Subliminal Projection Company to capitalize on the technique. He boasted, “This innocent little technique is going to sell a hell of a lot of goods.”
This brought Vicary into conflict with another of Packard's mad men, Ernest Dichter. The Vienna-born "Doctor Dichter" allegedly used his psychoanalytic training to fine-tune such pitches as "Put a tiger in your tank." More to the point, Dichter was the high guru of motivational research. In his not-so-humble opinion, subliminal ads were not innocent. Dichter feared they would give psychological marketing a bad name (or a worse name, as the cynics would have it).
The tiff only fanned interest. Soon, subliminals were in the news and on the air. Stations from coast to coast began running subliminal messages with various degrees of seriousness. Chicago radio station WAAF began selling subliminal ads (faint pitches played behind the music) for $1000 per week for 500 ads. “Phantom selling has quietly become a growing and ghostly industry,” enthused the Wall Street Journal. A United Artist theater in Los Angeles began flashing “Buy Popcorn” ads during its movies. This was not an experiment but an earnest attempt to boost sales, and United Artists talked of expanding the ads to 350-some theaters.
“We’ve already had a Los Angeles automobile retailer and a furniture store tell us they‘re interested in buying subliminal advertising time,” said a KTLA-TV manager, who offered such weird possibilities as “the subliminal projection of pleasing geometric shapes” to increase the acceptability of overt ads, and enhancing ham commericals by subliminally overlaying “a beautiful invisible ham cooking in the background.”
The public reaction to subliminal ads was outrage. “Himmler and Goebbels had, at least, the decency to commit suicide,” ran one letter to an editor. “In the absence of any such display of ethical sense on the part of James M. Vicary, I submit that said gentlemen be shot out of hand.” Hopeful rumor had it that subliminals could be unmasked by waving the hand, fingers outstretched, in front of the eyes. Life magazine ran a photo of this practice, vying in weirdness with the near-contemporary one of a 3D-movie-spec’d audience.
“It takes neither a psychologist nor a moralist to explain the feeling of revulsion felt by so many people toward the whole idea,” wrote George Brooks in Consumer Reports. “The concept of free will underlies that of free society.”
Vicary had hit a nerve. Atomic-age America had grown ambivalent about advertising and science. Intellectuals such as Aldous Huxley and Norman Cousins editorialized that Vicary had combined the worst of both. “There is only one kind of regulation or ruling that could possibly make any sense in this case,” Cousins wrote, “and that would be to take this invention and everything connected to it and attach it to the center of the next nuclear explosive scheduled for testing."


Op-Ed in Los Angeles Times

I've written an op-ed for the Los Angeles Times. You can find it here.

Tuesday, January 12, 2010

How Much Is Enough?

Some of the most successful product packages are the least practical. By universal consent, the Heinz Ketchup bottle is too tall and narrow to gracefully dispense its contents. Heinz experimented with a squatter, more practical bottle — and the public rejected it. For all the complaints about slow ketchup, they preferred to buy the old bottle. The company has had more success with its squeezable plastic bottles (also strangely tall and narrow). You'll find sleek profiles on many other containers, from the original Coca-Cola bottle to that of your favorite beer. The reason may have less to do with logic than with the quirks of human perception. The mind and eye are terrible at estimating volumes.
In an amusing experiment, Brian Wansink and Koert van Ittersum, of Cornell and Georgia Tech, asked student volunteers and professional bartenders to pour out a shot (1.5 ounces) of a simulated liquor. They were instructed to pour carefully, to dispense as close to the exact 1.5 ounces as they could manage. Two types of glasses were used in the experiment: a tall, narrow highball glass and a short, squat tumbler (photo, below). Despite the different shapes, each glass had the same capacity. On average, the students poured 30 percent more "liquor" in the short tumblers than in the tall glasses. The professional mixologists were only a bit more accurate: They poured 21 percent more in the tumblers.
One conclusion: If you're having a party and want to encourage safe driving — or just save on liquor — use tall, narrow glasses. Your guests, or the bartender, will pour less and think it's more.
This result is relevant to the psychology of price, contends marketing consultant Rags Srinivasan in his blog, Iterative Path. As we walk the supermarket aisles, we make a lot of snap decisions. Is that enough ketchup for that price? Is it good deal? These judgments are rarely as exact as they could be. For the most part, we glance at the posted price but don't even bother to scrutinize the label for the number of ounces or milliliters. Nor do we look at unit pricing. (Who's got time?) Instead, the purchase decision is based on two datums, the price and an eyeball estimate of volume. Since volume estimates are subject to all sorts of perceptual illusions, they are an important part of psychological marketing.
You've probably seen Discovery Channel shows on creatures that make themselves look bigger, to deter predators. Well marketers do much the same thing with packages. They use perceptual tricks to make packages look bigger. If Heinz and Hunt's ketchup each costs the same, but Heinz's bottle looks bigger, you're likely to buy Heinz.
That's why products tend to come in tall, narrow containers. It truly does look like you're getting more for the money. As much as possible, manufacturers try to avoid "tuna can"-shaped containers. There are few exceptions, of course — tuna cans, for one thing. There's generally a good reason for the exceptions. A flaky tuna filet wouldn't fit in a tall can. Pineapple rings need a pineapple-wide can. Guacamole and other dips come in flat containers so that the package presents a chip-friendly surface for serving.
Srinivasan found an ingenious application of the principle at the Tutti Frutti frozen yogurt chain. The chain lets its customers build their own yogurt sundaes and charges 35 cents an ounce, for however much (or little) yogurt and toppings they care to dispense. That flat rate seems eminently sensible, and would appear to preclude any kind of marketing hocus-pocus.
Until you look at the containers, that is. Srinivasan notes that they're wide and short, much like those in Wansink and van Ittersum's experiment. It's likely that most customers will buy more yogurt than they would have with a taller container.

Thursday, January 7, 2010

Pricing the Snuggie

The Snuggie, the "blanket with sleeves," may be an Irony Belt punchline, but somewhere, in a less jaded America, 20 million have bought it. Like other infomercials, the Snuggie pitch uses some powerful tricks of psychological marketing. Next to that, logic — and fashion sense — don't count for much.

• The Snuggie is not quite like anything the viewer has seen before. Is it a blanket? Is it a shirt? Is it a centaur-like hybrid? The potential buyer does not know how to categorize it and can't compare its price to those of familiar products. This leaves the buyer open to suggestion about what a fair price might be.

• The buyer of a novelty product also doesn't know what quality to expect, and this too leaves him open to suggestion about value. "When washed, it sheds," writes this month's Consumer Reports. "Each time we laundered two Snuggies, we removed a sandwich bag's worth of lint from the dryer screen." This provoked a rebuttal by the Snuggie people in The New York Times: "Because the Snuggie is designed to be used like a blanket, you typically don’t have to wash it as often as you would clothing." (Hmmm. The website says that Snuggies are perfect for "Night Time Pub Crawls." My guess is, you'll want to wash it once per pub crawl.)

• How much does a Snuggie cost? Glancing at the website, you might think $19.95. That's the most popular price for infomercial products — a "charm" price that seems so much less than $20. But as Consumer Reports notes, a $19.95 item usually costs $5 or $6 wholesale.

• Postage and handling run $7.95. Yes, you heard me right. The shipping charges are more than the probable wholesale cost of the Snuggie itself. When making a decision to buy, consumers focus on the product price, ignoring the extras. Marketers therefore shift the cost from the "price" to the "P&H."

• California and New York residents must pay sales tax on top of that, nearly $2. In the history of the world, has anyone ever factored that into their decision to buy?

• They throw in a "free" book light. It's mentioned like it's a fascinating product in its own right, but they don't waste much precious airtime on it. Suffice it to say it's small — think "prize in a cereal box."

• The book light is a freebie, the backbone of all infomercial pitches. Instead of selling just one product, they throw in something else for free, sometimes a whole cornucopia of freebies. Economist Richard Thaler calls this principle "Don't wrap all the Christmas presents in one box." Marketers use this formula because it means more sales at higher prices.

Now wait a minute, I hear the skeptics saying. I wouldn't be caught dead in one of those things — not if THEY PAID ME! These marketing tricks won't work on someone dead set against buying a Snuggie. They work on the persuadable, those sitting on the fence between buying and not buying. Even if you're not a Snuggie persuadable, you are for something else. We all make decisions, and the underlying psychology is much the same.

• Every slasher movie ends with the "slain" villain springing back to life. And every infomercial ends on this "surprise" twist: Buy now, and they'll double your order for free! You get two Snuggies, and two book lights, for just $19.95 with an asterisk. It's the asterisk that just got more expensive. You have to pay another $7.95 for shipping the "free" Snuggie (which probably isn't worth $7.95 wholesale). Grand total: $35.85 (plus any tax).

• What if you want to buy one Snuggie? Sorry, it doesn't work that way. One Snuggie is like the sound of one hand clapping (in a cheap fleece sleeve.)

Consumer Reports editors (2010). "Should you 'BUY THIS NOW!'?" Consumer Reports, Feb. 2010, 16-20.
Newman, Andrew Adam (2010). "Infomercial Products Take One on the Chin." The New York Times, Jan. 7, 2010.
Thaler, Richard (1985). “Mental Accounting and Consumer Choice.” Marketing Science 4, 199-214.

Tuesday, January 5, 2010

Publication Date, and a Mystery

Today is the official publication date of Priceless: The Myth of Fair Value (And How to Take Advantage of It). That means Amazon has it in stock, and so should most bookstores. It also means, as with most books nowadays, that someone is already selling used copies on Amazon. No mystery there: Review copies are sent out early, and (underpaid) reviewers often sell their books. The mystery is that one of the used books is selling for $39.99. The brand-new book has a list price of $26.99 and Amazon is currently selling it for $17.81. What would motivate someone to click past the Amazon price to pay more than twice that for a used book? (It's not autographed because, uh, I haven't autographed any copies yet.) I half-wondered whether some robo-resale outfit was confused by the cover, which has a fake price tag with multiple prices — but none of them is $39.99.