Tag Archives: marketing

Clock and ads projected on the ceiling

At a public swimming pool, the clocks on the wall are usually small, far and hard to see through droplet-covered goggles. The clock is relevant for planning to finish by a certain time and for tracking one’s speed (lap time). A solution is to use a projector to show a large clock on the ceiling, or to draw the numbers on the ceiling with a laser – essentially a programmed pointer.

The ceiling is also an untapped advertising display space, not just at swimming pools and gyms, but in any building. Ceiling ads are more valuable in swimming pools, gyms and yoga studios than in most other structures, because people doing backstroke, bench press or fish pose are facing the ceiling, which is not the case in a majority of buildings.

The floor is also mostly unused ad space. Projecting ads on the floor is not as useful as the ceiling, because people walking through the projector beam block the display.

Prefereeing increases the inequality of research output

Why do top researchers in economics publish almost exclusively in the top 5 journals? Random idea generation and mistakes in the course of its implementation should imply significant variance of the quality of finished research projects even for the best scientists. So top people should have more of all quality levels of papers.

Nepotism is not necessary to explain why those at top universities find it easier to publish in top journals. Researchers at the best departments have frequent access to editors and referees of top journals (their colleagues), so can select ideas that the editors and referees like and further tailor the project to the tastes of these gatekeepers during writing. Researchers without such access to editors and referees choose their projects “blindly” and develop the ideas in directions that only match gatekeeper tastes by chance. This results in much “wasted work” if the goal is to publish well (which may or may not be correlated with the social welfare from the research).

In addition to selecting and tailoring projects, those with access can also better select journals, because they know the preferences of the editorial board. So for any given project, networking with the gatekeepers allows choosing a journal where editors are likely to like this project. This reduces the number of rejections before eventual acceptance, allowing accumulating publications quicker and saving the labour of some rounds of revision of the paper (at journals that reject after a revise-and-resubmit for example).

A similar rich-get-richer positive feedback operates in business, especially for firms that sell to other firms (B2B). Top businesspeople get access to decisionmakers at other organisations, so can learn what the market desires, thus can select and tailor products to the wants of potential customers. Better selection and targeting avoids wasting product development costs. The products may or may not increase social welfare.

Information about other business leaders’ preferences also helps target the marketing of any given product to those predisposed to like the product. Thus successful businesspeople (who have access to influential decisionmakers) have a more popular selection of products with lower development and marketing costs.

On the seller side, firms would not want their competitors to know what the buyers desire, but the buyer side has a clear incentive to inform all sellers, not just those with access. Empirically, few buyers publish on their websites any information about their desired products. One reason may be that info is costly to provide, e.g. requests for product characteristics reveal business secrets about the buyer. However, disclosure costs would also prevent revealing info via networking. Another reason buyers do not to publicly announce their desired products may be that the buyers are also sellers of other products, so trade information for information with their suppliers who are also their customers. The industry or economy as a whole would benefit from more information-sharing (saving the cost of unwanted products), so some trading friction must prevent this mutually beneficial exchange.

One friction is an agency conflict between managers and shareholders. If managers are evaluated based on relative performance, then the managers of some firms may collude to only share useful information with each other, not with those outside their circle. The firms managed by the circle would benefit from wider sharing of their product needs, because outside companies would enter the competition to supply them, reducing their costs. However, those outside firms would get extra profit, making their managers look good, thus lowering the relative standing of the managers in the circle.

„People should have a choice” works both ways

Initiatives to counter unhealthy and destructive habits (smoking, gambling, junk food consumption) by taxing or restricting the addictive goods and services are often opposed with the argument that people should have a choice. One counterargument is that removing temptations from one’s future self is also a choice that people should have. For example, banning oneself from casinos. Similar registries could be instituted to ban oneself from buying alcohol or tobacco – the sales already require checking ID, so all that is needed is to compare the person’s identity against a database. For example, using a machine-readable ID which causes the machine to display “Do not sell” for people who have put themselves on the relevant list. Countries with universal machine-readable identification documents can use their existing systems for this. Examples are the European Union national identity cards.

Other ways to remove temptations from one’s way are restrictions on advertising, eliminating vending machines from a building, liquor stores near schools, alcohol and tobacco from the more visible areas of grocery shops. Just like people should have a choice to block spam emails, calls, web browser ads, they should have a choice to ban street advertising (of addictive goods or anything else) in their residential or work areas. Removing a public ad restricts some people’s right to see it, but empirically most people do not want to see more marketing in public spaces or elsewhere. Symmetrically, displaying a public ad restricts people’s right to avoid seeing it, so the question is how many people’s rights are restricted by banning vs allowing advertising.

The problem of annoying public advertisements may be resolved by smart glasses like Google Glass if these can detect advertisements appearing in the field of view and block these or replace with other images before the user sees these, similarly to how adblock software in browsers works.

Feedback requests by no-reply emails

We value your feedback” sent from a no-reply email address shows not only that the feedback is not valued, but also that the organisation is lying. More generally, when someone’s words and deeds conflict, then this is informative about his or her lack of truthfulness. If in addition the deeds are unpleasant, then this is the worst of the four possibilities (good or bad deeds combined with honest admission or lying).

The fact of sending such no-reply feedback requests suggests that either the organisations doing it are stupid, needlessly angering customers with insincere solicitations, or believe that the customers are stupid, failing to draw the statistically correct (Bayesian) conclusion about the organisation.

Some organisations send an automated feedback request by email (Mintos) or post (Yale Student Health) in response to every inquiry or interaction, even ones that clearly did not resolve the problem. The information about the non-resolution could easily be scraped from the original customer emails, without wasting anyone’s time by asking them to fill out feedback forms. The inefficient time-wasting by sending feedback requests is again informative about the organisation.

Blind testing of clothes

Inspired by blind taste testing, manufacturers’ claims about clothes could be tested by subjects blinded to what they are wearing. The test would work as follows. People put clothes on by feel with their eyes closed or in a pitch dark room and wear other clothes on top of the item to be tested. Thus the subjects cannot see what they are wearing. They then rate the comfort, warmth, weight, softness and other physical aspects of the garment. This would help consumers select the most practical clothing and keep advertising somewhat more honest than heretofore. For example, many socks are advertised as warm, but based on my experience, many of them do not live up to the hype. I would be willing to pay a small amount for data about past wearers’ experience. Online reviews are notoriously emotional and biased.

Some aspects of clothes can also be measured objectively – warmth is one of these, measured by heat flow through the garment per unit of area. Such data is unfortunately rarely reported. The physical measurements to conduct on clothes require some thought, to make these correspond to the wearing experience. For example, if clothes are thicker in some parts, then their insulation should be measured in multiple places. Some parts of the garment may usually be worn with more layers under or over it than others, which may affect the required warmth of different areas of the clothing item differently. Sweat may change the insulation properties dramatically, e.g. for cotton. Windproofness matters for whether windchill can be felt. All this needs taking into account when converting physical measurements to how the clothes feel.

M-diagram of politics

Suppose a politician claims that X is best for society. Quiz:

1. Should we infer that X is best for society?

2. Should we infer that the politician believes that X is best for society?

3. Should we infer that X is best for the politician?

4. Should we infer that X is best for the politician among policies that can be `sold’ as best for society?

5. Should we infer that the politician believes that X is best for the politician?

This quiz illustrates the general principle in game theory that players best-respond to their perceptions, not reality. Sometimes the perceptions may coincide with reality. Equilibrium concepts like Nash equilibrium assume that on average, players have correct beliefs.

The following diagram illustrates the reasoning of the politician claiming X is best for society: M-diagram of politics In case the diagram does not load, here is its description: the top row has `Official goal’ and `Real goal’, the bottom row has `Best way to the official goal’, `Best way to the real goal that looks like a reasonable way to the official goal’ and `Best way to the real goal’. Arrows point in an M-shaped pattern from the bottom row items to the top items. The arrow from `Best way to the real goal that looks like a reasonable way to the official goal’ to `Official goal’ is the constraint on the claims of the politician.

The correct answer to the quiz is 5.

This post is loosely translated from the original Estonian one https://www.sanderheinsalu.com/ajaveeb/?p=140

Claims that tickets are running out

Both for paid and free events, the organisers often advertise that only a few tickets or places remain. The ad sometimes explicitly tells the viewer to register or buy now. Such advertising is costly, so there should be a benefit to the organiser. If the tickets have already sold out, then the benefit is zero, or at least smaller than if the event is not fully booked. The positive benefit from advertising a sold-out event is to build reputation for the future as an organiser of popular events, similarly to real estate agents putting a „Sold” sign in front of a house on which they closed the deal.

Given that the benefit of costly advertising is smaller when no tickets remain, some sellers should decide to advertise if and only if the event has not sold out. More generally, the probability of advertising should increase in the number of tickets remaining. In this case, rational buyers should treat advertisements saying that limited spaces remain as signals of the opposite – frequent ads show a desperate seller facing low demand. If most buyers think this way, then such advertising is counterproductive, because buyers want to delay their purchases when the probability of being able to buy in the future is large enough. The option value of waiting comes from the possibility that the buyer’s preferences change – a better event may become available, or some emergency may prevent the buyer from attending. Getting a refund for a ticket already bought is at least a hassle and may even be impossible.

The widespread claims of limited space remaining suggest that these ads boost purchases. One reason may be buyer attention – ads make them notice the opportunity to buy, which some of them wish to take advantage of. However, any ads draw attention to the event, so raising awareness cannot be the reason for the specific claim that tickets are running out.

For most events, buyers do not want to coordinate with the largest possible crowd, only with their friends, so do not prefer a fully booked event to a half-full one. Thus claims that the event is almost sold out are difficult to explain by the seller trying to coordinate buyer actions.

Some irrationality of buyers or the seller seems necessary to explain messages that demand is low. Either the buyers take the claim literally instead of using Bayes’ rule to infer the opposite, or the seller advertises despite ads decreasing demand.

It is an empirical question whether the target audience of ads saying that space is running out interprets these as signalling high or low demand, and whether these messages make people delay their purchase or speed it up.

Free wifi lies

Many airports, hotels and other public places advertise free wifi, but in a significant fraction of them, the wifi does not work, e.g. in Doha Airport. One view about this is that you get what you pay for. On the other hand, the claim of providing free wifi makes people try to connect and wastes their time. Everyone would be slightly better off if the non-working wifi was not advertised – the advertiser would save the cost of printing the „Free wifi” signs and the visitors would save time.

It is cheap for the service provider to check whether the wifi is in fact working – just program a few cheap used smartphones to periodically try to connect to the wifi and send a notification to IT if the connection attempt fails. The connection failure may even trigger an automatic restart of the router.

Some airports may have wifi available, but only to a restricted group of people. For example, in India, connecting requires a local phone number, which most international travellers do not have. In Singapore and Shanghai airports, the wifi requires either a local number or scanning one’s passport in a kiosk, and the kiosks are sometimes out of order. Again, looking for the kiosk and trying to scan wastes time.

Intermittent wifi may be better or worse than none, depending on what fraction of time it is available and people’s average time cost of trying to connect.

Online check-in lies

Almost all airlines advertise the option to check in online and send email reminders to do so. In my experience, some airlines (Qantas, Air New Zealand and Qatar Airways) frequently do not allow online check-in despite falsely claiming that it is always available, or only unavailable to underage people and large groups. Email reminders to check in online seem like mockery in this case, but are still sent.

The false advertising of online check-in wastes customers’ time by encouraging them to start the data entry process. Often the process can be almost completed and only at the end does a message appear saying that online check-in is unavailable. To reduce the wasted time, the process should be stopped as soon as possible whenever it cannot be completed but is nonetheless started. It seems a simple IT fix to not send the automated reminder emails when online check-in is unavailable, and display the message „Online check-in unavailable” at the start of the data entry process instead of at the end.

A similarly ironic tone to falsely advertising online check-in is achieved by sending „we value your opinion” emails from a no-reply email address, or claiming to listen to customers but providing no contact email or phone on the website. Such mockery is practiced by many large companies. Sometimes the firms provide a feedback form that is user-unfriendly and requests lots of personal data. Or they may refer inquiries to a very limited FAQ section. The FAQ sometimes lists questions no real customer would ask, along the lines of „What makes your product so excellent?” These questions are in the FAQ just to let the company repeat their marketing slogans.

Mugs, pens and USB sticks as advertisements

Several universities I have visited give free mugs to seminar speakers as advertisements for themselves. Similar branded objects (pens, USB sticks, T-shirts, baseball caps) are handed out by firms and political campaigns as part of their marketing.

The idea of giving people practical objects instead of flyers, junk mail or banners is to make the recipients use these objects (as opposed to throwing these away or storing them at the back of a closet), preferably in a public setting, and thus increase the visibility of the advertiser. For this, the more usable the handout, the better.

Unfortunately, the people ordering these objects in bulk and paying for the brand logo to be printed on these are busy administrators who do not connect the overall purpose the marketing campaign to the properties of the objects. Specifically, the mugs should have a large handle that lets more than two fingers hold it, the mug should be short with a wide mouth for easy filling and washing, and should not be too fragile.

Pens should write well and be ergonomical, not angular or too narrow. I have seen branded pens violating all these suggestions. For example, the Australian National University pens are of flimsy plastic, create ink splotches and the ink runs out quickly.

The USB sticks handed out by the University of Queensland had a metal cover which increased the USB drive’s bulk and scratchiness. Also, the USB was wide and thick, making it impossible to plug in side by side with another USB. The small capacity of the USB was also behind the times.

To advertise with an object, it would make sense to print the advertiser’s name and other relevant information in large readable font on the object. The logo is not useful unless it is already widely known by the target audience and associated with the advertiser. The readability suggestion is violated by the Singapore Management University’s mug, which has SMU written on it in complicated calligraphic script that is difficult to decipher even for someone who knows what the abbreviation SMU means.

For people to develop a positive view of the advertiser, the object should not seem too cheap or bad quality. By contrast, most free T-shirts are the cheapest ones that could be bought wholesale, made of the most threadbare and transparent cotton, which discourages their use.