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  • Joshua Green

WHY MARKETING'S RESPONSE TO ECONOMIC CRISIS NEEDS TO BE MESSY...

Economic headwinds, fixed rate cliffs, $19 zucchinis. You’ve heard it, I’ve heard it – the current economic outlook is far from rosy and it’s having a knock-on effect to advertising dollars. Last month alone, Australian advertising revenue was down a significant 13% compared to the same time last year (SMI, Feb 2023).


But it’s not all doom and gloom. As former Amazon Prime CMO, Ukonwa Ojo so wisely said, the convergence of volatility, uncertainty and complexity also creates an incredible opportunity for courage, boldness and creativity.


What’s perhaps less obvious for marketers and agencies, though, is how.


Cue the timely arrival of Google’s Messy Middle 2.0 research: an in-depth dive into the levers that drive where consumers purchase online.


Now, while the report has some snappy stats about people’s allegiance to brands versus retailers, what I’m personally more interested in is the interrogation of how behavioural biases can offset the siren song of discounting.


And despite these findings being framed squarely in the context of the Google ecosystem – for obvious reasons – I would suggest that there are some far broader reaching implications of these findings that have the potential to extend beyond channel specific tactics.


Here, we provide a whistle stop tour of both the findings themselves and what they might mean for the media mix in a recessionary environment.


The Messy Middle 2.0’s key findings


As already alluded to, the first of the key findings is that people are significantly more loyal to what they buy than where they buy it. 1 out of 2 people will switch to their second-choice retailers versus 1 out of 4 who will switch to their second-choice product.


By way of example, I care much more about buying Charlotte Tilbury moisturiser than I care about whether it’s being purchased from Myer or David Jones. In this sense, the retailer is the vessel (with perhaps the notable exception of certain category outliers that a) have made the retail experience an intrinsic part of the brand experience or, b) have product exclusivity thereby making the retailer both the journey and the destination – but that’s a topic for another day).


Secondly, the research finds that the use of behavioural biases can act as a counterweight to discounting. In the study, when Google applied five different behavioural science principles (category heuristics, social proof, authority bias, power of free and delivery friction) it was able to drive the same impact as discounting by 15%.


In other words, I’m more likely to buy the more expensive gym shorts than I am the discounted ones if I can get them with same day delivery, I know that 200 other shoppers are also looking at them, there’s an encouraging quote from the founder of a Pilates studio, the features are listed, and I get a free tote with purchase.


To sum it up, using biases represents a compelling way for marketers to protect their bottom line.


The implications for the broader media miX


While neatly framed within the confines of the Google advertising ecosystem in the report, the implication of these findings has significant, sprawling tentacles that have potential to not only impact but to fuel the way marketers and agencies alike approach their marketing.


We’ve seen time and time again the nearly irresistible appeal of focusing on price as a purchase driver in times of economic uncertainty. And, while it has been shown to drive immediate, short-term effects, the longer tail repercussions can’t be ignored. It sets a precedent that can quickly devolve into a race to the bottom.


The Messy Middle 2.0 findings sketch out an alternate route that takes a more nuanced view of how consumers define value.


And, while the applications of this way are no doubt extensive, I’m going to focus here on what two of the behavioural biases examined mean for media decisions.


Social proof


If the research shows us one thing, it is that a traditional push message on traditional push media only does part of the job.


The findings tell us that social proof is the most powerful behavioural science mechanism to counteract discounting. Knowing this suggests that media needs to not only focus on supporting a paid creative message in market but also in fostering a product focused public sphere where the endorsement and discourse of regular people can be amplified.


Whether it’s the use of case studies, putting spend behind user generated content or dynamic placements that demonstrate the volume of people interested in your product, amplifying the idea that your brand is the choice du jour packs remarkable punch.


Authority bias


In a similar vein, we can’t underestimate the power of leveraging well-known, expert voices to add legitimacy to any brand claims.


While at first glance this may appear to be a creative choice, media can contribute explicitly through the development of media partnerships with subject matter expert journalists or highly trusted media personalities.


There is also an implicit function of media choice in terms of how the media context itself contributes to the overall perception of the communication. For example, showing up under a well-established news masthead would likely contribute favourably to the perceived legitimacy of the ad. Conversely, serving a display ad on ezydealz4u.com will be unlikely to support your communication… in fact, it might just do the opposite.


Bless this mess


The Messy Middle 2.0 provides the marketing community with data-based findings that help to broaden the way in which we define value – something that is particularly important given the current economic landscape.


However, to apply these purely as channel tactics is to significantly underestimate their significance. There is enormous potential for the application of these behavioural biases across the entire marketing mix, extending far beyond the initial media musings that I’ve penned above.


Those that can apply them in their broader sense are poised to drive significant results – not just for their marketing activity but for their entire business.


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