Tag Archives: marketing

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.

Spam deterrence by boycotting

The obvious reason for spam of any kind (emails, texts, phone calls, unsolicited mail) is that it is profitable. Thus spam must raise the probability that its target buys or otherwise complies with the spammer’s wishes, e.g. leaves a review. To deter spam, the incentive for it must be reversed – the targeted people should not give in to spammers, but do the opposite (not buy, not leave a review when receiving a „reminder”). I try to follow this strategy. If I remember that a business spammed me, then I try to boycott it, unless it is by far the best option (usually not, spammers are typically shady businesses and bottom-feeders).

Incentives are created by the difference in payoffs, not their level. Thus to deter spam, the buying probability should be lower for a spamming business than for a non-spamming competitor. To create this payoff difference for non-monetary actions, e.g. reviewinig, I leave a review with positive probability when not asked to do so, but certainly avoid reviewing when spammed with reminders.

If the whole society followed the strategy of boycotting spammers, then one possible concern is that spammers would start to use reverse psychology. They would spam in the name of their competitors to make them look like spammers. If customers start boycotting the competitors as a result, then demand shifts to the spammer, which is profitable.

The reverse psychology is unlikely to become a serious problem, because there are typically many competitors and the spammer would have to make most of them look bad to increase its demand significantly. Also, the law usually punishes the use of a fake name more harshly than unsolicited contacting. The competitors whose reputation is tarnished by spam under their name have a stronger incentive to sue its source than consumers just annoyed by the spam.

Pre-selected health insurance plans for visitors

A half-year visit to a US university under a J1 visa requires US health insurance. In the University of Pennsylvania, the website of the International Students’ and Scholars’ Office says that they have pre-selected some health insurance plans. According to their cover description and comparison websites, these plans offer significantly less cover than similarly-priced plans not pre-selected by U Penn. My spreadsheet comparing the health insurance options is public. Possibly I have missed some aspects of insurance that justify the price difference. Another explanation is that the pre-selection was done by people who do not themselves use these insurance plans (because they are not visitors to the US) and have little incentive to make an effort to choose the best plan. A more negative and less likely interpretation is that the insurance company is providing incentives (such as kickbacks) for the selectors at U Penn to direct visitors to expensive low-cover plans that are profitable for the insurer.

Bad popular science books

There is a class of books that is marketed as popular science, but have the profit from sales as their only goal, disregarding truth. Easily visible signs of these are titles that include clickbait keywords (sex, seduction, death, fear, apocalypse, diet), controversial or emotional topics (evolution, health, psychology theories, war, terrorism), radical statements about these topics (statements opposite to mainstream thinking, common sense or previous research), and big claims about the authors’ qualifications that are actually hollow (PhD from an obscure institution or not in the field of the book). The authors typically include a journalist (or writer, or some other professional marketer of narratives) and a person that seems to be qualified in the field of the book. Of course these signs are an imperfect signal, but their usefulness is that they are visible from the covers.
Inside such a book, the authors cherry-pick pieces of science and non-science that support the claim that the book makes, and ignore contradicting evidence, even if that evidence is present in the same research articles that the book cites as supporting it. Most pages promise that soon the book will prove the claims that are made on that page, but somehow the book never gets to the proof. It just presents more unfounded claims.
A book of this class does not define its central concepts or claims precisely, so it can flexibly interpret previous research as supporting its claims. The book does not make precise what would constitute evidence refuting its claim, but sets up “straw-man” counterarguments to its claim and refutes them (mischaracterising the actual counterarguments to make them look ridiculous).
Examples of these books that I have read to some extent before becoming exasperated by their demagoguery: Sex at dawn, Games people play.

Spam call deterrence

Time-wasting marketing calls to my cellphone are a bit of a problem. I have developed the habit of checking any new number against online spam call reporting websites, and if the number turns out to be a spammer, then saving it under “Spam call” in my phone. Then in the future, any call from the same number shows up on the phone as Spam call. There are probably apps for blocking numbers, but as an economist, I would prefer a tax to a ban. I would like to make callers pay me for calling me, to compensate for my time spent answering or blocking, and also to deter spam calls. In principle, charging a fee for receiving a call is possible, because there are already 1-800 numbers and others that are pricier to call than an ordinary phone.
If it was costlier to call me than most numbers, then I would refund the extra calling fee to my friends and other legitimate callers, so they would not be deterred from calling me. This is easy, because I can see the list of calls, their durations and numbers online, so can calculate how much extra each caller paid to call me. Spammers of course would not get a refund.

Sugar-free, fat-free and low-salt claims

The three main ingredients of unhealthy food are sugar, salt and fat. The packaging of junk food often has claims of sugar-free, fat-free or low-salt in big colourful letters on the front. The trick is that the absence of one of the three ingredients is compensated by a larger amount of the other two, as can be checked from the nutrition information label.
Sometimes the claims on the front of the pack directly contradict the nutrition label, so are downright lies. I have seen packaging with the claim “sugar-free” on the front, with sugars listed in significant quantity on the nutrition label. There are some legal sanctions for falsifying the nutrition information label, but almost no restrictions on what can be claimed elsewhere on the pack, so any contradictions should almost always be resolved in favour of the nutrition label.
I have seen a sugar-free claim on a pack on which the ingredient list included brown sugar. This suggests the existence of a legal loophole (brown sugar not equalling sugar somehow) that the manufacturer wanted to use.
If the manufacturer does not want to outright lie, then a trick I have seen is to claim “no added sugar” or “no sugar or artificial sweeteners” on the pack, but add other sweeteners, e.g. sugarcane juice, molasses, high fructose corn syrup. Similarly, “no added salt” can be bypassed by adding salty ingredients, for example dried salted meat or bacon to a snack mix.
Another trick is to create the sugar in the food during the manufacturing process. For example, heating starch for a long time or adding the enzyme amylase breaks the starch into smaller-molecule sugars. So a manufacturer can claim “no added sweeteners” and yet produce sugars in the food by processing the starch in it.
A similar trick for salt is to add sodium and chloride in other ingredients and let them combine into NaCl in the food.

Joining together detached houses saves energy

Suburbs in many countries consist of detached houses that very close to each other – I have seen neighbours’ walls half a metre apart. Both houses could save energy by joining their adjacent walls together, which reduces heat loss in cold weather and heat entry (thus the need for air conditioning) in hot temperatures. Ideally, the joining should happen at the construction stage, but it is not difficult to do after the houses are built. Just enclose the space between the sides of two houses by extending the front and back wall and the roof of each house. It is not a load-bearing construction, it just has to keep the wind out from the space between the houses and provide some insulation to the space.
An added bonus is the creation of a covered storage area (a door to the space between houses should be created if the houses don’t already have a door on that side). A possible downside is that to get from the front of the house to the back, now one has to pass through the house or the storage area. But given the narrowness of the typical walkway between suburban detached houses, passing through the house may be the best route anyway. Also, when enclosing the walkway, a door can be made in each end to keep it open for passage.
Another downside is that windows on the side of the house now look into a covered storage area, not outside. But if the houses are so close together, then the only view from the window is the wall or window of the neighbour. After enclosing the side, this view becomes darker, but that does not seem a great loss. If it is, then energy-efficient lights can be installed in the enclosed area and kept on during waking hours, so people can admire their neighbour’s wall or window. Really, windows with such views can be replaced by a poster-size print-out of a photo of the view, because if the window looks into the neighbour’s window, then the neighbour probably keeps the curtains closed to prevent spying. And a wall through a window looks pretty similar to a photo of the wall stuck over the window.
The real reason to not join the houses is probably marketing and the desire to show off that it targets. People want to boast of owning a detached house, even if it is less than two metres from the neighbour’s. Knowing this, property developers construct such dwellings and market them as detached (“own your own house”, really owned by the mortgage issuer for 25 years). This is similar to the reason why McMansions are built, only the income of the buyers differs. Also similar are the pride and marketing that make people buy large SUVs, pickups and all-terrain vehicles for driving solely on paved roads.