1. Advertising: Introduction Adapted from J. Scott Armstrong Updated August 2015 Introduction R32 The slides for this course are provided at adprin.com. Please send suggestions for improvements to Scott Armstrong. (armstrong@wharton.upenn.edu)

2. Use an Applications Diary Primary purpose of the experiential lectures is to help you to apply what you learn. That is the only way to retain the principles and techniques (it will also help you to remember). Focus on writing applications steps as you go through. 2

3. Objectives of the experiential lectures To understand and apply these principles and techniques (not to convince you). Ask for clarification as needed. Set a goal for yourself on how many principles and techniques you plan to use by the end of this session. Even a goal of one will help you. Note: Normally, I will cover only some of the slides. When you go through the lecture on your own, view it in “Slide Show” and follow the experiential procedures. Adprin.com

4. Procedure Focus on understanding. Record questions in your learning diary that will help you to apply the techniques or principles, then, after you decide which ones you want to apply, try to answer these from the readings. If not clear, ask others for help. 4 Adprin.com

5. Experiential Learning for Evidence-based Content Unfreeze 1. Prior Experience Described 2. Experience Generated in Structured Exercise 3. Comparison between #1 and #2 4. Disconfirming Evidence Made Available Change 1. Description of Alternative Approaches 2. Practice New Approaches in Supportive Atmosphere Refreeze 1. Learner Writes Summary of Changes 2. Learner Plans Applications 5

6. Persuasion principles can address many types of problems List some areas where you could use persuasion principles. When finished, click for examples. Examples: – Selling products and services – Donations (charities) – Votes – Social issues (smoking, weight) – Getting a job (resume) – Convincing a friend, family member, boss, employee – Convincing yourself (Principle 5.11.4) 6 Adprin.com

7. “Advertising is fundamentally persuasion.” Bill Bernbach, 1960Bill Bernbach “Everyone is practicing oratory on others through the whole of his life.” Adam Smith. Adam Smith “One quarter of Gross Domestic Product is persuasion,” McCloskey & Klamer (1995) 7 Adprin.com

8. Can advertising be improved? “.. advertising is now so near to perfection that it is not easy to propose any improvement.” Do you agree? Who said that and when? Dr. Samuel JohnsonDr. Samuel Johnson, 1697 8 Adprin.com

9. The benefits of advertising have been debated: Some early opinions “Advertising is the very essence of democracy.” - Anton Chekhov, late 1800s “If I were starting life all over again, I am inclined to think I would go into the advertising business …It is essentially a form of education. …The generally rising standards of modern civilization …during the last half century would have been impossible without…advertising.” - Franklin Roosevelt 9 Adprin.com

10. “Recent” views on effectiveness of advertising David Ogilvy said, “Who is approving this junk called advertising? Have the clients gone crazy?” (1991) Graham Phillips, former CEO of Ogilvy and Mather said, “Too much of today’s advertising is irrelevant and a waste of money.” (2002) Gerry Tellis, a marketing professor, concluded, “Much advertising, as preached today, is ineffective.” (2004) 10 Adprin.com

11. Which doctor would you use and why? Suppose that you are feeling ill. You call for a doctor and are offered two choices: Dr. A: Graduate of Penn Medical School in 1990; has been practicing since then. Dr. B: Graduate of Penn Medical School in 2010; has been practicing since then. Who would you choose to diagnose your illness and why? Write the answer in your learning diary. 11 Adprin.com

12. How to choose a doctor The more recent graduate would be expected to be better at diagnosis given recent exposure to evidence-based medicine. Prior to 1940, doctors had little success in diagnosis of diseases. After 1940, there was increasing use of knowledge from experimentation and this led to increased life spans. PA (p. 2) 12 Adprin.com

13. Advertisers can benefit from evidence-based principles and techniques Unique selling proposition for Persuasive Advertising: “Evidence-based principles for improved decision making in advertising.” This benefit is not claimed by anyone else. In addition, it cannot be claimed by anyone else. 13 Adprin.com

14. Example of a Unique Selling Proposition Revlon’s Silicare Cosmetic lotions can’t heal rough, red, hurt hands! Revlon’s new, medicated Silicare protects as it heals and softens your hands! Doctors recommend daily use of Silicare! 14 Adprin.com

15. Assessing your current knowledge Complete Test your advertising IQ on adprin.com. (Guessing leads to a score of about 8.)Test your advertising IQ 15 Adprin.com

16. A principle describes: what to do (actions in operational terms) when to do it (under what conditions) That is, “Given the objective, product, and target market, use advertising action X...” Example: Do not put a period at the end of a headline. What is wrong with that as a principle? Write your answer. Then, click for the answer. It has no condition 16 Principles can help create advertisements Adprin.com

17. Most important principle Write the most important persuasion principle you can think of for persuading people. Check that it follows the definition for a principle. Write any evidence you know that the principle is true. 17 Adprin.com

18. Where persuasion principles come from 1.Experiments provide the only sure way to learn about complex uncertain phenomena – Advertising textbooks and handbooks make almost no use of experimental research (as with most textbooks in management schools). 2. Advertising is too complex to learn from experience. 18 Adprin.com

19. Evidence-based principles are often ignored or violated Of the 195 evidence-based principles that apply to advertising: None were found in an audit of 9 advertising textbooks and 3 practitioner handbooks When asked whether “principles” were true or false, people did no better than if they had guessed Current practice often violates the principles The above findings have also been found for marketing principles marketing principles Source: “Evidence-based Advertising” by J. S. Armstrong (2011)Evidence-based Advertising Adprin.com 19

20. Sources of evidence about principles Unaided observation [very weak evidence] Received wisdom [weak evidence] – Typical practice – Expert opinions Empirical evidence – Non-experimental [mild evidence] – Quasi-experimental [fairly strong evidence] – Experimental (laboratory & field experiments) [strong evidence] – Meta-analyses of experimental evidence [very strong evidence] 20 Adprin.com

21. Observation often fails in learning about in advertising, especially for complex issues 21 Failures in observation o Example: Does humor sell? ___ Yes ___ No o Too many conditions exist to be able to learn about advertising effects from unaided observation. Adprin.com

22. 22 Systematic record keeping and observations can provide useful evidence You have seen thousands of ads for watches. What time do they display? By systematic observation of the evidence, one can quickly learn. Most watch ads show the same pattern. What time do they show? Ten after ten or ten till two. Adprin.com

23. Reasons why 10:10 or 1:50 are displayed Happy face Does not cover important information (e.g., calendar) Tradition 23 Adprin.com

25. Non-experimental evidence can be useful Assume that you are a football coach. It is the 4 th down and you are on the opponent’s 3-yard line midway through the first quarter. How would you decide whether to kick a field goal or go for a touchdown? Most coaches use unaided expert opinion. Alternative: Analysis of non-experimental data. The New England Patriots football team uses this effectively. 25 Adprin.com

26. Healing in a former British colony In a former British colony, healers believed that a distillation of fluids extracted from horse urine, if dried to a powder and fed to aging women, could preserve youth, and ward off diseases. The preparation became popular and was used widely by older women. Studies of hundreds of thousands of women showed that those who took the drug were healthier. 26 Adprin.com

27. 27 Healing Story - Part 2 The former colony is the United States, the time is now, and the drug is female hormone replacement products. Women who watched their health sought best procedures. They were compared with people who put less emphasis on health. Thus, non- experimental data misled doctors. Experimental studies revealed that long-term use of horse-urine extract was of limited value and that, it caused tumors, blood clots, heart disease, and perhaps brain damage in older women. Source: Avorn. J. Powerful Medicines. Adprin.com

28. Experimental evidence can provide strong and reliable findings in advertising situations To develop knowledge in complex and uncertain situations: – Quasi-experiments: Some key variables controlled for in a real situation – Lab experiments: Key variables controlled for in an artificial situation – Field experiments: Key variables controlled for in a real situation 28 Adprin.com

29. Quasi-experimental evidence: Effectiveness of comparable ads Quasi-experimental data: Ad pair from Which Ad Pulled Best A Work. Dream. We’ll leave that up to you. But as far as taking care of you goes, you can leave that up to us. B Our Extensive List of Priorities: You. Right now, you can get an excellent Dream Deal rate at participating Doubletree locations all across the country. Which means you can get breakfast, comfortable surroundings, a caring staff, a warm cookie at check-in and earn Hilton Honors hotel points and airline miles for the same stay— all for one low rate. For reservations, visit doubletree.com/dreamdeal or call 1-800-222-TREE. Adprin.com

30. Conclusions on evidence 1. Prior research has shown that lab and field experiments yield similar conclusions. (Locke 1986).Locke 1986 2. Quasi-experimental analyses in advertising reached similar directional conclusions in all comparisons with lab experiments (26 comparisons), field (7), and meta-analyses (7) for the persuasion principles. (Armstrong & Patnaik 2009) (Armstrong & Patnaik 2009) 3. Meta-analyses of experimental evidence provide the gold standard for experimental evidence. 30 Adprin.com

31. Experimental evidence is resisted when it challenges current beliefs SemmelweisSemmelweis’ experiments on deaths of mothers shortly after delivery led to the recommendation that doctors should wash their hands. How would you respond if you were a doctor? Write your answer. How do you normally respond when given evidence that you are wrong about something? Write your answer Adprin.com

32. Doctors’ response to experiments The doctors strongly resisted for decades as they did not believe Semmelweis’ experiments. How does this compare to your original thoughts? Evidence-based answer: You must identify what would change your mind then seek that evidence. Most people seek only confirming evidence. This issue is examined in the section on Resistance, page 104 of Persuasive Advertising. 32 Adprin.com

33. Analyze the Bose Ad (Print this ad): Do this exercise on your own 33 Adprin.com

34. Analyzing the Bose Wave Radio Ad Examine the advertisement and rate it on a 1 to 5 scale before proceeding (1 = poorest rating and 5 = highest rating). 1. Do you like this ad? _____ 2. Rate the effectiveness_____ Record your ratings in your learning diary 34 Adprin.com

35. Analyzing ads How would you analyze the Bose ad, given more time and money? Write your answers in your learning diary. When you finish, click here. 35 Adprin.com

36. How to analyze ads 1.Expert judgments: 2.Pre-testing (copy testing) 3.Conformance with evidence-based principles 4.Field tests (recall, persuasion, sales) Bose tracks effectiveness, and this ad was used for many years, so it was effective. 36 Adprin.com

37. Another ad by Bose: How it Sounds 37 How do you think the ad did using 1 to 10 for effectiveness ________ Write your rating in your learning diary. Then click here. Adprin.com

38. Bose: How it Sounds This ad violates many persuasion principles principles. Also, Bose tracks all of its ads and drops ads that have a poor sales response. This ad apparently had a short life. 38

39. The course also involves techniques The stress is on evidence-based techniques. Structured techniques are superior to unaided judgment, especially for complex problems. One of the primary techniques for the course is the use of Checklists. The key checklists are summarized on the top bar of AdPrin.com.Checklists 39 Adprin.com

40. A sample of techniques for advertising Here are some techniques that are useful in developing an advertising campaign. – Brainwriting (and gallery writing) – Copy-testing – Decomposition – Delphi – Formal planning – Index method – Non-directive interviewing – Parallel processing – Timelines – Virtual groups Here is a more complete list. Set goals for yourself.complete list 40 Adprin.com

41. Example of a complex problem: The King’s children 1.You are going to see a King 2.He has two children 3.You want to take presents for them but only have room for two 4.You find out that one child is a boy 5.What is the probability that the other is a girl? Click here for the answer. 41 Adprin.com

42. Structured approaches help. Here is one approach One is a boy. Probability the other one is a girl is 2/3. Boy Boy No Boy Girl Yes Girl Boy Yes Girl Girl NA As is happens there are various assumptions. The point is that you cannot do complex problems in your head. 42 Adprin.com

43. Advice on learning techniques One study found that fewer than 10% of students were successful in applying new knowledge. This went to 20% if they actively applied what they were taught during a class session. It went to 90% when they worked with a learning partner and coached each other. Select techniques to applytechniques 43 Adprin.com

44. Follow-up 1.___Read the syllabus 2.___Take a tour of advertisingprinciples.comadvertisingprinciples.com 3. ___Test your Advertising IQAdvertising IQ 4. ___Complete the Predict WAPB assessment.Predict WAPB 5. ___ Go through this lecture on your own (It is on the Educational Materials page) Educational Materials 6.___Study Persuasive Advertising up through page13 and record your reading time in your diary. Highlight the techniques that you want to apply in yellow.Persuasive Advertising 6.___Take the end-of-chapter examend-of-chapter exam Adprin.com 44