Ogilvy opens first behavioural science practice in Asia

#ogilvychange uses cognitive psychology, social psychology and behavioural economics to influence people’s behaviour and purchase decisions.

 

#ogilvychange was started by O&M UK’s vice chairman Rory Sutherland and has about eight behavioural experts. The local unit will be run by Sonal Narain, O&M Asia-Pacific’s regional planning director.

 

“For marketing to improve, we must abandon the complete overreliance on two pre-existing models of human behaviour and decision making which have had too much sway over marketing decisions for too long,” said Sutherland. "The first is the assumption that markets behave according to price and demand curves, which is very often not the case. The second is the idea that people can accurately tell you what they want, how they choose and what they prefer."

 

According to Sutherland, large parts of the human brain involved in decision making aren't even accessible to introspection, let alone description, so attempting to pursue marketing by simply asking people to explain what they want is dangerously wrong and incomplete. 

 

To significantly improve marketing efficiency, Sutherland proposed brands improve forecasting how people will behave. “Through the use of these new sciences and better diverse models, we can improve the effectiveness of what we do by an order of magnitude.”

 

Sutherland said one big reason to open in Singapore was because it is a relatively enclosed space with a manageable population. “It’s hugely sophisticated and is perhaps the most advanced city in the world.” According to him, people have reached a certain level of wealth and are likely to reach an age where they question “what all this stuff is for” and how one can derive pleasure from it. “This wealth can be translated for social good. Getting the balance of that right is good for society.”

 

The agency applied some of these principles in a recent campaign for the Health Promotion Board, compelling people to quit smoking. The campaign takes a pro-quitting approach rather than the traditional anti-smoking. It got smokers to give up cigarettes by encouraging and inspiring them to quit rather than trying to scare them into quitting by talking about the dire and grotesque consequences of smoking.

 

The practice, which has grown to about nine psychology experts (in London), plans to expand to Sydney, Berlin, Madrid and the United States. It is currently present in London, Prague and Singapore.

 

Q&A with Rory Sutherland

 

What are the core tenets of the practice and how should advertisers use it?

 

The idea of behavioural economics occurred to me when I was president of IPA (Institute of Practioners) from 2009 to 2011. The agenda was to improve behavioural science in the industry. There are huge advances in the field and if we fail to keep abreast of those we look ridiculous. So after the presidency ended, we launched #ogilvychange in 2012 to provide a bridge between the world of academic research and advertising practice. David Ogilvy always said we are a teaching hospital – a place where we conduct research, teaching and practice. So this is very much in keeping with that. We need to learn from academia and teach and practice what we learn and feedback what works. I spent quite a bit of the years meeting the best practioners in the field. We generally find they’re interested in deploying what they do in businesses. Our view is that Ogilvy needs to have this competency. It adds value and makes money. We’ve grown to about  nine people in London.

 

We want to expand overseas. The little patterns of behaviour one discovers can be applied for different business. We think this is important not only for marketing clients. Some of our work will be in research and development. Our real opportunity is to talk to those parts of client businesses that don’t talk to agencies.

 

When I first started I wondered if we needed the agency apparatus. But you need the talent you find in planners and turn insights into something actionable to solve a real world problem. The combination of behavioural science and creativity is very powerful. We think we can add much more value and grow better with an agency alongside.

 

What sectors does the practice work best?

 

I haven’t yet found a field where we found no application for it.

 

Can you share examples of paradoxical brand choices in the Asian context and how each market varies from the other?

 

I’ve been asked if behaviour varies by culture. Some things do. There are innate things that lead to specific cultural practices. But things like scarcity bias and loss aversion are pretty constant across cultures. Gift giving or looking after children is pretty universal but the forms they take may vary.

 

An interesting thing about Singapore is if you get on the MRT before 7:45 your ride is free. What they didn’t test is to have commuters pay for their journey, but if they arrive before 7:45, they get a voucher for a free ride on a later date. That’s much more motivating than money off. Money you actually save disappears. But if you pay the same amount and collect more points, you can save it up for guiltless journey that’s purely for fun.

 

Similarly, 50 per cent extra free on a shampoo is more motivating than 33 per cent off on the price. For brands, it costs more to drop the price. However, consumers see a 33 per cent discount as a mark of desperation and 50 per cent extra is a bonus. We make inferences for all these things in a way that economics doesn’t take into account.

 

How do you demonstrate ROI on behavioural economics?

 

It’s very easy to do. The starting point of an ad campaign is to change attitudes. Our starting point is to change behaviour and that’s what you measure.