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."

TO BE CONTINUED

Op-Ed in Los Angeles Times

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

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.

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.)

SEE ALSO
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.

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.

How to Convince People That Black is White

For generations, Harvard psychology students were treated to a jaw-dropping classroom experiment. With the aplomb of a magician, Professor S.S. "Smitty" Stevens (1906-1973) would darken the room and reveal a white disk. Then Stevens turned a spotlight on the disk. Instantly, it turned black. Unless you're seen it, the sense of logic turned upside is hard to convey. Perhaps Chico Marx said it best: "Who you gonna believe, me or your own eyes?"
The secret was marvelously simple. The "white" disk was actually gray. Stevens made sure it was the brightest thing in a dark room, and that made it look white. Then Stevens illuminated a ring of (truly) white paper around the gray disk. The white paper was so more reflective that it made the gray look black by contrast.
As Stevens put it in his textbook, Psychophysics, "black is white with a bright ring around it." The Orwellian tone of that must have been intentional. In Orwell's 1984, Big Brother convinces everyone that war is peace, freedom is slavery, and black is white. Stevens managed the same feat (with lighting rather than a cage of rats). His point was that human perception is sensitive to contrasts, not absolute values. Subjectively, it's all relative. (This too is a chilling talking point of Big Brother's minions.)
I write about Stevens (above) in my new book, Priceless. Stevens' studies of perception were an important precedent for behavioral decision theory and the marketing based on it. It turns out that contrasts rule with economic judgments as well as sensory ones. A BMW 3-series may seem expensive until you compare it to a 7-series. Then the 3-series looks, well, reasonably priced. Such contrast effects are a foundation of contemporary marketing. Like it or not, they allow marketers to push our buttons as effectively as Stevens did—to convince us that expensive is cheap, consumption is thrift, and luxury is necessity.
Because Stevens' experiment was so influential, I wanted to find a way to illustrate it within the pages of my book. Obviously, I can't control the lighting of a printed page (though that might be possible with next generation Kindle?). I found the next best thing, an amusing perceptual illusion that works nicely on the page. But this weekend, I came across a strikingly exact counterpart of Stevens' experiment. It's art, not science, specifically a 1966 work, Multiplication Electronique III, by the Argentinian artist Gregorio Vardanega. It's currently at the Museum of Latin American Art, Long Beach, Calif. (through Jan. 24) and is owned by the Cisneros Fontanals Art Foundation, Miami.
The visual trick works perfectly even on my cell phone photos. At top is a typical shot of Vardanega's ever-changing work. You see a four-by-four wooden grid of squares, something like the cardboard grids holding holiday ornaments. Each square cubicle is partitioned (via a 5-by-5 grid) into three concentric smaller squares. Light bulbs switch on and off, illuminating different squares and sub-squares. This produces a sequence of scintillating black-and-white abstractions.
Periodically, all the light bulbs switch off at once. You see the work "in its true light" — that is, in the normal gallery lighting that's been there all along. The whole thing is painted white. The blackness was all in your head.
Stevens' message is that this is not a mere "optical illusion." This is how we all experience the world. It applies to pleasures, pains, and prices — joys and griefs and discounts — and everything.

Decoding Fast-Food Menus

Fast-food menus are among the most rigorously tested products of our consumer culture. Because the decision of what to order for lunch isn't that important in the grand scheme of things, we don't spend much time or thought on it. Instead, we rely on cues in the environment. If your friend mentioned having a barbecue sandwich yesterday, you're more likely to try it today (assuming you like barbecue, and the friend). Memories are short, so the most powerful source of cues is the menu. The prices are designed to get consumers to order more than they might have otherwise.
• The most common trick of fast-food menus is the "combo meal." As everyone understands, the combo meal offers an incentive to order something extra. The burger plus fries plus soda combination costs just pennies more than burger plus soda à la carte. You might as well get the fries — it seems like you're throwing away money not to order it. For most consumers, this is irresistible.
There's another reason fast-food places offer combo meals. They foster confusion. It’s hard to be sure how much the burger costs, and how much the drink costs—and whether it’s too much. So consumers are a bit less price-sensitive with combos. Of course, eventually repeat customers become familiar with the prices of their favorite combos. For this reason, fast-food menus are an ever-changing caloric kaleidoscope. New entrees are offered, and old ones change or vanish. Combos can be super-sized. Do you want curly fries? You can’t buy exactly the same thing you did last time (neither can you compare prices, exactly).
• The Starbucks menu uses the "rule of three." The menu offers three sizes of coffees, given the enigmatic names of Tall, Grande, and Venti. (They're 12, 16, and 20 ounces respectively; 24 ounces for cold Venti drinks, to allow for ice.) Since Starbucks newbies won't know what they're getting, they tend to order the middle choice, Grande. In the psychology literature, this is known as "extremeness aversion" — people instinctively favor a middle choice, figuring it's safer. Guess what? You've just ordered two cups of expensive coffee. The Grande's sixteen ounces is two regular cups. Here's a secret: Most Starbucks will serve you eight ounces of coffee, but you have to ask for a "Short" coffee (which isn't listed on the menu). You have to remember that password "Short": Company policy says that a customer who asks for a "small" coffee is to be given a "Tall" one.
• Anyone who doubts the power of prices ending in 9 should check out a fast-food menu. The menu above, at a Los Angeles Pollo Loco outlet, has 75 prices, and all but one end in the digit "9."
• The exception: a deal offering 10 buffalo wings for $5. Quick: How much is that per wing? It takes most of us a moment to do the math. And that's the point: not many people bother, not with kids screaming in the back seat. But "10 wings for $5" sounds like a better deal than "50 cents a wing."
• Critics have blasted the nutritional value of fast food, causing both the industry and government to take action. Since 2008 New York City has required fast-food places to post calories—in large fonts—on menus. This may or may not have promoted healthier eating. It probably hasn't hurt chain profits, though. The reason is that consumers now have two sets of numbers to juggle: calories and dollars. As many experiments have shown, the human mind has a finite capacity to deal with numerical information. By encouraging diners to pay more attention to calories, the new menus prompt them to pay less attention to prices. That gives chains scope to charge a little more. (Not only that, the salads are among the most expensive things on McDonald's menus, anyway.)

SEE ALSO
Poundstone, William. "Menu Mind Games." New York, December 14, 2009.
Poundstone, William. "Menu Psych." YouTube, 2009.