using advertising to disprove economic theory

One of the cornerstone thesis of economics has been the theory that human beings are, by nature, rational people. This theory has been under attack by many modern economists, who in addition to looking at the wild risk taking (albeit government demanded and subsidized – ladies and gentlemen, let’s put a hand together for Chris Dodd, Barney Frank and the current Congressional leadership!) and the gullibility of those who fell for the easy and consistent returns of con men like Bernie Madoff, have new studies that show people to be less than rational in their economic decisions.

Frankly, I am surprised that it took so long to figure that out.

And I don’t mean that in a flip way, as if as mere advertiser like myself would have the economic and mathematical tools available to conclusively disprove Rational Choice Theory based only on current events.

I mean that it is very obvious that people are not balancing costs against benefits of purchase decisions in a reasoned or dispassionate way. And again, this is not meant in an informal, “can you believe idiots pay thousands more for a hybrid and think it’s cost effective because of marginally better gas mileage” or “why do people who just use a computer for the interney buy a more expensive Mac” way. I mean it seriously.

What is my evidence, you ask? Advertising. Specifically, television commercials.

Now that you are done snickering, I will continue…

This realization came to me while watching Mad Men, while thinking how quaint it was that their ads made rational, long form, persuasion-based Unique Selling Proposition-style arguments.

And I realized that we don’t sell arguments these days.

We sell an image.

And in one way, we can’t help it. Because a television commercial is, by its very nature, running on television, its form is an image. Or, rather, its form is thirty seconds of very quickly changing images that demand of the viewer a strict attention not to ideas and arguments, which require sequential, logical and abstract thinking, but to image. And because they are focused on image, the viewer is not responding sequentially, logically or abstractly, but rather emotionally, intuitively and simply to the holistic feeling that the image gives them.

And if the image meshes with them in those ways, especially emotionally (as we have all heard Creative Directors tell us), they buy in.

Beyond the inherent irrationality of an image as compared with a written word as the form of reasoned argument, the specific images of commercials are particularly unreasonable. Because those images, the ones that are working so hard to create emotion, are working to create religious-like devotion.

The very fact that brands have to have a social media strategy, that thousands of people will ‘friend’ a brand like adidas on Facebook, will put an Apple Computer sticker on the back of their car, will tattoo a DC Shoes logo onto their forearm…it is complete, illogical devotion. There is no reason behind it.

These are companies that make money by selling people things. And the people love them.

These are companies like any other company in the world, many selling barely differentiated products. And people judge each other based on the labels on their clothes. The cars they drive. The type of soda they drink.

Because people emotionally identify with the religious-like symbols and storytelling of brands.

And so television commercials are finely-tuned to use images and emotion to build up brands as idols. Which is anti-Reason. Because feeling is irrefutable. Those commercials do not require sophisticated judgment to assess and compare to other brands. They require the mere capacity for emotion.

People buy feeling. They do not buy considered argument.

If even advertising has abandoned selling by approaching a person with argument and reasoned discourse, then undeniably the weight of private enterprise is in agreement with the contention that people are essentially irrational. Private enterprise doesn’t do anything that is not profitable, at least not for long (or if not under government duress). If ads that presented products in a way that demanded the analytical and comparative skills that comprise rational judgment were to sell better than typical modern flash, advertisers would make them. But they don’t. Because they don’t.

And so is Rational Choice Theory disproven.

Cue Nobel Prize in Economics.

See you bitches in Stockholm.

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2 responses to “using advertising to disprove economic theory

  1. Awesome fucking post, biz.

    • Why thank you, sir. I was about to spend too much money on a car that I don’t need when the inspiration for the post came to me…and after thinking about it I didn’t get the car.

      Though I still want it.

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