Sunday, September 18, 2011

advertising to children

Interesting study I read on childrens’ literacy about advertising, its intent, and its tactics.  They were interested in learning at what age children figure out that the advertisers are trying to influence them and if they can tell how this happening.  Of course, many adults aren’t particularly good at this, so they did a comparison to typical adult advertising literacy.

Developmental psych informs us that children under age 5 don’t realize that different people can have different thoughts, intentions, and knowledge.  By age 8, most children can understand that advertisers have a motive for telling them things, but can’t recognize specific tactics and how it affects them.  It is not until 10-12 years old that children start to understand that advertisers are trying to change their mental state through subtle persuasion.  So it is between ages 8 and 12 that children learn to recognize and understand advertisers’ persuasion tactics. 

So they surveyed advertisers about their strategies and identified six tactics that advertisers typically pursue. 
  1. Repetition: because this effect is subtle, it works well on adults too.  Think Budweiser ads, billboards, coasters in bars, etc. etc.
  2. Demonstration: show the consumer how the item works (focusing on its benefits)
  3. Peer influence: displaying the target demographic using and enjoying the product
  4. Humor: associating the product with fun/funny
  5. Celebrity endorsement: associating the product with positive attitudes towards celebrities.
  6. Premiums: free stuff has a powerful pull, even on adults.  Think Dan Ariely’s work.
They use these strategies to achieve the following three goals. 
  1. All but peer influence try to increase recall of the product and its attributes (cognitive)
  2. Peer and humor are used to increase the likability of the product (affective)
  3. All but humor are used to get children to ask their parents to buy them the product (behavioral)
Adults and children aged 10-12 had about the same predictions as to what the advertisers’ strategies were when using each of these tactics.  Children ages 8-9 had less awareness.  The strategies of product demonstration and humor were learned at the latest age.  Even adults didn’t see through humor.  Premiums are the most obvious, even to the youngest children.

What does this mean?  If we think children need special protection from advertisers, we can now focus on the aspects that either they are least aware of, or the aspects where they are furthest behind adults.  The biggest one was product demonstration.  The paternalist could achieve this through regulation and the libertarian could achieve this through education.

Another study looked in more detail about the repetition strategy.  What they found is that even when consumers didn’t remember the companies for which they had seen advertising, it still increased their likelihood to consider it.  So a lot of the effects of repetition are subconscious.  I think many of us would have predicted this, but they have the hard data to show it.

21st Century teaching

There was an hour long panel on the American Media Radio show focused on why lecturing is the worst way to teach.  There were also about 5 articles on the web site that talked about specific research projects that have provided evidence for this.  Lecturing started in the days before the printing press when students couldn’t read in advance.  So the teachers (at all levels) had to present the material brand new to the students.  And, we didn’t really know any better about how people learn.

But their studies show that there are a couple of better methods:
  • Making sure that students read the material ahead of time, so no lecturing is needed during class.  One prof has a multiple choice quiz covering the readings for the day on the course web site that students have to complete in advance in order to get in the door at classtime.  I am going to use this one!
  • Peer learning. One physics prof discovered that when he lectured on a particular topic, about half the students really understood it.  So he had them pair up and explain it to each other.  They all got it after that.  Students who just learned the concept were much better at teaching it to the clueless students because the learning process was fresh and they have a more similar context.  So now he runs classes like this every day.  He asks a question in the day’s material, knowing that they have read it already, and the students break out to debate it with each other.
  • One entire university redesigned its instructional techniques when they hired a new president.  Now, all the classes are designed to be interactive and peer-based.
These articles gave me a lot to think about.  I try not to lecture and like to do peer-interaction breakout sessions.  But when students haven’t read in advance, it’s impossible.  So I am thinking if I start doing the pre-class online quiz, then I can do this more.

Wednesday, September 14, 2011

Ethical tradeoffs in design for kids

OK, let's complicate the situation another step.  What if you are designing a product or service and have a choice to make.  There is one option that would be more profitable, but would be worse for the customer.  They would think it was better, sales would be better, and they would never know it.  Do you do it?  Is it worse if the customer is a child?

I saw on Facebook so many times yesterday that I am sure everyone has already seen the article about Spongebob Squarepants.  They design the show to shift between scenes really fast.  This hampers a child's development of executive processing such as attention, working memory, problem solving and delay of gratification.  These all help kids get ahead in school and in life.  But kids love it because it captures their attention fully.  So if you were Nickelodeon, what would you do about this?

A saw a TED talk abstract (that I think I misinterpreted at first, but makes a better example) with a similar case.  There is an iPad app for kids that tells stories.  But if the reader doesn't like the way the story is going, they just shake the iPad and it goes in a different direction (I remember books like this when I was a kid, but not as visceral a method of changing the plot).  What does this teach?  But kids love it. 

What would you do if faced with this kind of decision?  As a designer?  As a parent consumer? 

Ethical tradeoffs.

My political blog this morning got me thinking about the workplace and consumer applications of this kind of tradeoff.  Sometimes, you need to choose whether to take the option that is in your self-interest, that your conscience tells you is the “right” thing to do, or to follow the rules (legal or company policy).  When all of these agree, the choice is easy.  You pick the good, profitable, legal option. 

But what about the doctor who fudges the code on the treatment form so he can give the low income patient a procedure that isn’t covered by his insurance? 

How about the laborer who breaks the company rules about safety in order to increase productivity and hit his performance bonus?  What about a company that dumps something in a nearby waterway that isn’t officially against the law, but is probably not great for the environment?  These decisions happen all the time.  There is no way to use the homo economicus rational model, because you can’t put numbers on these different options to compare them. Otherwise, people would always go with self-interest, which clearly is not the case.

LynnStout shares the true story about an illegal immigrant who was standing at a bus stop when an armored car drives by and a bag with $200,000 in it falls out.  He takes it home and goes back and forth all night about whether he should turn it in or not.  It wasn’t about being afraid of getting caught.  It was between $200k and his conscience.  And in fact, turning it in could bring attention on him that gets him deported.  So it’s actually safer to keep the money.  But he turned it in.  I saw something similar on the local news last night.  A guy found a load of cash in his backyard and turned it in.  The police suspect that it was stashed by a fleeing robber, but haven’t figured it out yet.  The money is in the evidence locker, not his bank account.

Have you ever broken a company rule or a law for your own self interest?  How about because you thought it was the right thing to do?

Or take the opposite:  Have you ever obeyed a company rule even though it hurt your self-interest?  Have you ever obeyed a company rule even though you thought it resulted in something unethical?  Or illegal?

Sunday, September 11, 2011

Good coffee or consistent coffee

Here is a great example of why the world needs to take a more system-wide perspective when dealing with important economic development.  The Ethiopian coffee market is my topic of today.

There are really two markets for Ethiopian coffee.  The bulk is sold to companies like Kraft to make Maxwell House in bulk that you would never know came from Ethiopian Arabica beans.  These are blended to create a consistent, mild flavor.  Then there is a small market for the highest quality beans that are branded not just for taste, but with an accompanying story – the name of the grower, fair trade wages, eco-friendly agriculture, etc.  This is a very small part of the total volume, but serves two important goals.  It creates a brand image for Ethiopian coffee and it sets a high peak price that anchors the bulk market where the rest of the beans are sold.

But the Ethiopian government, in the interest of increasing efficiency, has passed new regulations that all coffee has to go through the centralized Ethiopian Commodities Exchange.  This is because the high volume trading this provides makes the whole system more efficient.  It leads to higher volume of coffee demand, and therefore a need for foreign investment in infrastructure like roads and ports.  It makes farming more efficient overall.  But if they lose the high end boutique market, it could reduce prices to the point where they lose all the benefits of the efficiency.

One proposal is a bar-coding system that enables both.  All of the coffee transfers through the Exchange, but some of it is blended into consistent tasting Maxwell House and others are maintained as boutique beans.  The bar coding makes sure they don’t get mixed up, so they can keep them straight and the boutique cafes are confident enough that they are willing to pay the higher price.  That is what is missing in the current plan.

Economists and traders are good at making efficient exchanges.  Marketers are good at branding and creating higher priced exclusive products.  But only IEs can achieve both in the same market.

Friday, September 09, 2011

9/11: In Honor of the Tenth Anniversary

My first version of this was much longer, but I have summarized my thoughts more for you and provided links for more information.

For the past twenty-five years, I have been studying risk, risk probabilities, risk perception, and the common errors that people make in perceiving risk.  I have helped companies apply these ideas and testified in court to help juries understand events that are part of legal disputes.  In honor of the Tenth Anniversary of the September 11, 2001 terrorist attacks on the Pentagon and World Trade Center, I decided to apply these tools to how the world reacted, in particular the US which is what I am most familiar with.

The first thing to know is that the most common error people make in perceiving risk is that salient, newsmaking events are perceived as more likely and more severe than less salient, less newsmaking events.  So we overestimate the risk events like plane crashes and terrorist attacks and underestimate the risk of events like not being able to afford health care, undertreating your diabetes, and dying five years earlier than you would have.  You may argue that 3500 people died on 9/11.  But how many people have died, suffered through untreated illness or injury, lost hours of time, were humiliated by TSA strip searches, etc because of our reaction.   And how many crimes occurred because law enforcement has been redirected towards homeland security?

What I did was looked at the responses that we made and the responses we could have made and thought about their benefits compared to their costs.  Of course, these are all loose estimates, but 25 years of experience does give me a pretty good sense of these things.  And there is supporting research available.  They find the risk of dying in a terrorist attack is one in 12.5 million.  Compare that to the one in 1 million chance of drowning on your bathtub.

First I looked at what we did do. 
  • We created the Department of Homeland Security and the Transportation Security Authority
  • We invaded Iraq and Afghanistan.
  • We passed the Patriot Act.  
  • We locked down our borders and made it harder for foreigners to visit, go to school, or immigrate.
The benefits of these things has been some reduction in the likelihood of future terrorist attacks by catching, killing, and deterring terrorists.  But what were the costs?  The wars have easier to measure costs.  We have spent over $1.3 trillion dollars and had 5000 soldiers and many civilians killed.  How about DHS and TSA? $500 billion dollars, and we have lost a lot of time waiting in security lines, lost dignity being searched on occasion, and been inconvenienced by having to bring a single quart Ziploc of 3-ounce liquids. What are the economic costs?  Remember Reagan beat the Soviet Union by forcing them to spend so much on their military that they couldn't keep up their standard of living.  It would be ironic if Bin Laden's legacy is that he did the same thing to us.

The Patriot Act has infringed on our civil liberties in less tangible ways.  For example a 70-year old man left his cell phone in the food court of the Mall of the Americas.  He went back a few minutes later to look for it, nervous that is was permanently lost or stolen.   Because there was an “unattended item” and because he “looked nervous” the mall security reported the incident to the police, the police reported the incident to the FBI, and the FBI put his family on the watch list.  Now any time he or anyone in his family goes to an airport, they are singled out for a hand search.  There are also lost liberties that we don’t even know about.  Warrantless wiretaps are not announced to the public.  Perhaps the FBI is reading this right now and putting me on the watch list!!

And according to James Thurber at American University, many FBI anti-gang programs were canceled to shift resources to homeland security.  How many crimes were committed or lives were affected by this?  Hard to measure, but a serious consequence.  

What if we took a more minimalist approach?  What would that look like?  Perhaps we did only the following:
  • Bomb the heck out of every Al Queda (including Al Shabab, AQAP, etc) hideout, training ground, and base of operations that we knew about.  This would reduce their resources significantly and send a strong message that we are not going to take attacks lying down,
  • Increase intelligence operations overseas to better ferret out attacks before they occur and infiltrate the terror groups.
  • Improve the communication links between intelligence and law enforcement agencies domestically (police, FBI), internationally (CIA, Interpol), and globally (other countries domestic agencies).
  • Put together a series of educational programs modeled on the See Something Say Something program that helps people in different industries recognize suspicious behaviors and make it easy to report.  I don’t mean Patriot Act type reactions, just more awareness and compilation of statistics to identify real suspicious behavior.
 Would this second approach reduce the risk of terrorist attacks?  Perhaps not as much as what we did, but perhaps more.  What have me lost in international political capital that would have helped us keep economic rivals in check and protect our interests abroad.  Would a minimalist approach cost as much?  Not by a long shot.  And refreshing my example above, what if we could take all the money we spent on the wars, DHS, and TSA and use it to improve our education, infrastructure, and innovation.  How many lives would be saved and improved by having a stronger economy, stronger job market, and better educational system? 

This is where the real guessing comes in, but I suspect that we would increase worldwide happiness, wellbeing, and life expectancy with the minimal response than with what we did.  Personally, I don’t think it is an order of magnitude difference.  In other words, I’d give points.  But I would put serious money on even odds.

John Horgan of Scientific American wrote an editorial with a similar conclusion.  

Thursday, September 08, 2011

Last Place Aversion

This was a pretty interesting finding.  It says a lot about how sometimes people behave (voting, working, local civic activism) against their own best interests.

Past research has shown that people often act against their best interests to satisfy visceral emotions and fears.  In these cases, we don’t realize we are acting against our own interests.  For example, working class people are often against taxing the rich.  This seems against their interests.  But there is a subconscious feeling that if we are against rich people we are concluding that we will never be one of them.  It’s like saying they are one group and we are a separate group and you can’t go from one to the other.   It’s an odd form of loss aversion.  There is a visceral feeling like if we support taxes on the rich we are admitting defeat in our own lives.  Not everyone feels this way or votes this way, but it is enough to shift a few key elections now and again.  

The same thing happens with the minimum wage.  There is an odd drop in support for people who make just above the minimum.  Unconsciously (or maybe even consciously) they feel like if the minimum wage gets raised to what they are already making, then all the people they used to be "ahead" of catch up and now they are in last place too.
This study added a nuance.  You can imagine from my title what the basic finding is.  People have basic competitive instincts where we want to win, want to get ahead, would rather be in second place than third place.  But there is a stronger aversion to last place.  We will do almost anything not to be last, even if it means acting against our own self interest as long as it puts someone else in last place.

This is an oversimplification , but basically they gave random people all different amounts of money. The requirement was that they had to give some of it to someone else.  Most of the people gave money to people who had less (we are all somewhat altruistic at heart).  The only exception was the people who had the second least.  They refused to give money to the person at the bottom because then they would be the person at the bottom.  Even though it was random – it wasn’t any kind of statement about their abilities or talent – they still couldn’t bring themselves to do anything that would put themselves into last place.