thackeraytroy.wordpress.com

The economic principle I’m exploring is, “People generally respond to incentives in predictable ways.”

My research question to help me study the economic principle is, “Do people realize that advertisements have an effect on them? And do advertisements work unknowingly?”

The article published in Psychology Today titled “What Does Advertising Do” demonstrates this economic principle by arguing/showing advertisements work without you realizing it, advertisements use basic human psychology to influence consumers, and even if you tune out an advertisement you will still be affected.

First, many advertisements work without you even realizing it. Companies know this so they use eye catching images with their brand name prominently promoted to just get their company name in your head. For example if you see an advertisement for a pen company you may tune it out, but now your brain associates pens to X company. So the next time that you are out shopping for pens you will purchase theirs just because you have that connection. A study was conducted studying the connection between viewing an advertisement and whether or not you will purchase the good. The study results are as followed, “The people who went through the affective conditioning procedure picked the pen that was paired with positive items 70-80% of the time.” This means that someone will buy your item 70-80% of the time just because your brand name is associated to that good. The implementations of this are endless because companies that devote many of their resources to advertisements will make much more money.

Second, companies use basic human psychology to make their advertisements as impactful as possible. Whenever you view an advertisement you are often greeted with bright colors, large logos, and happy people enjoying their product. It gets to the point that someone is on the verge of crying tears of joy over how wonderful their laundry detergent cleans their cloths. This stays with your thought because you will associate X brand with happiness. The author Art Markman Ph.D. says in his article that, “If we have to make a choice, and one of the options just feels good to us, then we are likely to go with the one that feels good.” This means that just because something looks and feels good that we will buy it. This is just like all the Coke ads you see whether the paid actor is smiling and drinking a can of sugar syrup. This means that we do not have as much free will when it comes to purchasing as we may believe.

 Third, you will be affected by advertisements even if you think you are tuning them out. This relates to the previous paragraphs, but I feel that this needs to be looked into in more depth because of just how powerful advertisements truly are. It is kind of scary to think of how easily manipulated the average consumer is. The author Art Markman Ph.D. says, “Over the two studies in this paper, the authors found that people chose the pen that was paired with positive objects even when people were given as much time as they wanted to make a choice, and even when the instructions specifically encouraged them to pick the best choice and to say why they were choosing a particular pen.” This basically means that the average consumer has no power over what they are purchasing even when presented with free choice.

In my next blog post I will research the question: Do advertisements that focus on life style work better than traditional advertisements?