Knowing and Making

From Rory Sutherland , current president of the Institute of Practioners in Advertising: "We need to broaden the definition of what we do to reflect the new reality of the market place because if we don't create a new model based on human understanding, then we are in danger of using 1950's packaged goods persuasive techniques to solve today's communications problems! With behavioural economics we can align ourselves to a recognizable science..." I'm a great supporter of Rory's campaign to bring science into the marketing world - the field today is too driven by gut feeling, and treats creativity as an end instead of a means. Science lets us clearly understand the business problem, create a solution and demonstrate that it will work. I disagree with him on one point in particular, but we'll come back to that. In the meantime, I've been reading Sam Delaney's book  Get Smashed , a history of the British advertising industry from the 1940s onwa...

I'm studying behavioural pricing as part of my response to the forthcoming OFT market study , and Amazon has an interesting history of this. Whether or not they still offer personalised prices to different customers for the same product (probably not, as they were shot down for it last time ), their pricing strategy is still fascinating. Take a look at this screenshot: Because I have a ton of books in my 'Saved for later' list, I get a message like this nearly every time I visit the Amazon checkout. Often the same book moves up or down by £1 or 50p several times over the course of a few weeks. The only plausible explanations for this are that Amazon either: has an incredibly sophisticated demand management process and knows exactly when people will pay more or less for a book or, is testing different prices to measure the overall demand curve (or my personal one, which is even more interesting). Either way, it's fascinating to watch one of the most sophisticated behavio...

I had a very interesting conversation yesterday with the head of a branding agency who shares our vision of developing a scientific foundation for the practice of marketing. My view (and that of Rory Sutherland of the IPA and Ogilvy) is that behavioural economics can provide this foundation. But as a discipline, behavioural economics is not yet mature. It has a hole at its centre which needs filled before we can genuinely say that there is a science of marketing. Filling this hole is the goal of my research and this article outlines how it can be done. The key step in the development of behavioural economics is to close the gap in our understanding between neuromarketing and phenomenological descriptions of behaviour. The practice and underlying science of marketing can be represented as a multi-layered set of disciplines, from highest to lowest level: The craft and folk wisdom of sales and marketing Experimental phenomena from behavioural economics ??? Neuromarketing and the applicati...

Any of these links could have made a blog posting of its own, but instead why not help yourself to a high-density nutritious snack selection of random commentary? During the first lecture of Paul Krugman's London visit last month he commented that the economy might be "stabilising". The stockmarket leapt a hundred points (giving rise to much hilarity on the second and third evenings). This perceptive writer points out a similar occasion in 1929 when someone "of no great note" called Roger Babson made a comment that the market was due to crash. At which point it duly crashed - for the next twenty-five years. Now a little later in the Robbins lectures Paul Krugman reviewed a history of not the 1929 but the 1873 depression - and how the economy recovered from that, in the absence of the modern era's gifts of Keynesian stimulus and World War II. Nothing to do with the earlier comments...except for one little thing... An interesting behavioural marketing tactic ...