Marketing Secrets for Global Brainwashing - Richard Shotton

0:00 What did you learn from Five Guys? >> So, Five Guys is the opening chapter and we talk about something that they did very powerfully which is when they launched they were relentless at focusing on just doing burger and chips. So, people like McDonald's got seduced by the fact that they could launch file fish and and chicken burgers. But the Five Guys relentlessly honed down on just doing burgers. Now, some of the benefit of that is a ability just to get better at cooking, better at producing your core product. But psychologists argue there's something else on top of it. So, there's an idea called the goal dilution effect. And the first studies were done by Zang and Fishbach back in

0:46 2007. And they did a very simple experiment. Recruit a group of people, randomize them into two subgroups, and the first set of people are told, "If you eat tomatoes, it's very good for your heart health. Here are the reasons." And that group are asked to say whether they think eating tomatoes is worth doing for their heart health. Second group of people, they see exactly the same text, exactly the same reasons and logic and facts about why tomato eating is so good for cardiovascular health. But they are also told if you eat tomatoes it will improve your eye health, it will reduce degenerative diseases. Now when that second group are asked to say how good um eating tomatoes

1:32 is for heart health, they come back with a 12% lower score. So even though they've seen the same facts because in this second group there was an additional reason thrown in, it reduced it diluted the believability in that that core reason. So there's there's a psychological as well as practical benefit about communicating that you do one thing well. People have a rule of thumb in their head that you can't be a jack of all trades, you know, or you if you are, you'll be a master of of none of them. So there's there's a sacrifice in credibility and believability if you claim to do multiple things. >> What does that say about sort of underlying human psychology? Is it that we have a kind of a zero sum or a a a

2:17 resource limitation on how much we think we should be able to distribute between the traits of a particular offer? I I I think a lot of these biases that behavioral scientists identify, that psychologists identify, they're generally true. I mean, all things being equal, you tend to get better at a task if it is the sole focus of your attention. If you spend 40 hours a week being a cyclist, you're going to be a better cyclist than I if I spend 10 hours a week. So, people have a sensible rule of thumb in their head, but then the danger is they over apply in situations where it's not relevant. like in the situation Zang set up, people got the same facts about cardiovascular health, but because they threw in this second benefit, it seemed to detract

3:04 from it. So, I think it's often the misapplication of a generally generally sensible rule of thumb. Is the rule or the lesson for brands here that you need to win one thing very well and be very cautious about trying to add additional offers and features and uh potential advantages that people can get by using it. >> That's yeah that's that's a fair summary. It's essentially the argument that be very very careful about adding extra reasons to believe because what they will gradually do is undermine believability in the the core reason to buy your product. So if you start saying you're all things to all people over time gradually insiduously that original

3:51 reason to buy gradually disappears. >> Uh reasons to believe is a wonderful way to put it. the belie the believability thing is really interesting. So, you know, selfishly, I've got uh Newtonic, I've got my uh productivity drink and I'm shamelessly using yours and Sutherland's insights around behavioral science in an attempt to do this and uh it does lots of things. Um but we could have talked about procrastination, we could have talked about uh alertness, we could have talked about energy, but we just tried to get one word which was productivity and we just went for one single thing. I think the problem we have with productivity, the problem we're currently facing and we may end up pivoting a little bit is that and we've got we're using fuel your focus and productivity drinks. There's two things that are kind of synonymous with each other. I think the problem is it's too

4:38 amorphous as an offering. I think I don't think that people necessarily want to be focused or productive. I think they want to get their job done with limited effort. So we're trying to think now about what a pivot from a copy perspective would be to talk about the outcome as opposed to the sort of mediator between you and the outcome. Like you don't want focus. You want your work completed. You don't want productivity. You want to be efficient. You want like efficiently to complete the the task that's in front of you. So >> yeah, I think there's two bits there. Firstly, selling the outcome rather than the the product makes sense. I think it was Levit said, you know, if you've got a drill, don't sell 9 in I don't know, drill bits, sell 9 in holes. So, I think there's an argument there. But but the

5:24 um the other bit that struck me when you're talking about things like productivity and focus is that an awful lot of experimentation shows that people are pretty bad at remembering abstract data. They're very good at remembering concrete physical things. >> So the original study was by Ian Beg back in 1972 and he recruits a group of people reads them 22-word phrases. He doesn't mention it to the participants, but half of these two-word phrases are what he calls abstract concepts. So they're intangible ideas like basic truth. Half of the phrases he reads out are what he calls concrete phrases. So they describe physical things like a white horse. So

6:12 he reads out this list and then later on he asks people what they can remember and his key finding is people can remember on average 9% of the abstractions but 36% of the concrete phrases. So you are four times more likely to remember the thing that you can visualize. And Beg's explanation applies just as much to 2026. His argument is vision is the most powerful of our senses. So if you use language people can visualize, it's very sticky. But if you stay in this realm of abstraction like focus or productivity, people can understand what you're saying, but they'll struggle to remember it, you know, a minute or two after you've you've mentioned it. So there could be something >> I was going to say, what would be an equivalent way to visualize increased productivity or focus?

6:58 >> Well, coming up with that on the fly would be very hard. >> Freestyle rapping might be a little >> Yeah. Yeah. Yeah. Yeah. This could go disastrously wrong, but maybe concrete, sorry, maybe specific examples of people doing it. >> Red Bull didn't say Red Bull gives you energy, which is abstract. They said Red Bull gives you wings. That's something you can picture and visualize. >> Uh Apple didn't say you get a gigabyte of memory when they first launched the iPod. They said a thousand songs in your pod pocket. You can picture a pocket, can't picture a gigabyte or a megabyte. So I I I think what those businesses and copyrighters did so successfully is translate that abstract objective into something that people could could picture. >> Talk to me about Red Bull. Obviously

7:47 absolute giga brand. Uh pretty fascinating I'm going to guess from a consumer behavior standpoint. What have you learned about them? I think one of the most powerful things they've done and you may have covered this with Rory Sutherland was apply this principle of price relativity. So a core concept of behavioral science is when people are weighing up what a um a product is worth paying for. They don't look at the benefits that product brings and then try and translate that on a universal yard stick. They don't think to themselves, okay, well, a can of Red Bull will give me one unit of happiness and I will pay $1 per unit of happiness, whether it's a pair of jeans or a or a soft drink. >> You know, people don't do that cuz it's

8:33 a complex question. And Daniel Carnean argued when people face complex questions, what they tend to do, even if they don't realize it, is replace the complex question with a simpler alternative. And the simpler alternative is, how much did I pay for something similar? So, if a new item like Red Bull launches, uh, if it's more than a similar purchase, people think it's bad value. If it's less than a similar purchase, people think it's good value. Now when you first hear that it sounds bleeding obvious but actually that's a very powerful insight for a marketer because if you accept that value is perceived relatively rather than absolutely what it leads to is thinking if I can change my mental comparison set I can change the willingness of my consumer you know the willingness to

9:18 pay. >> Is this the Rolls-Royce thing? >> Well this I would say is the Red Bull thing. I mean, it could be the Rolls-Royce. The Rolls-Royce example um would be don't sell them at car shows, sell them at yacht shows or um air shows because a Rolls-Royce is cheap compared to a private jet, not cheap compared to a Audi Mercedes. But think think about Red Bull >> when they launched the standard soft drink was about half the price. and the standard soft drink and I'll use the UK numbers. What what Coke and Pepsi did was they sold in these squat fat 330 mil cylinders. >> Mhm. >> If Red Bull had launched in exactly that same can, it would have been compared to those prices and people might have paid a 5 or 10% premium because they knew it was highly caffeinated, had this extra

10:04 functionality, but they wouldn't have paid twice as much. But paradoxically, you change the shape of the can. You make it smaller to 250 ms. make it tall and thin. And essentially, you've broken this unhelpful comparison with cheap soft drinks. And and if you look around, quite a few businesses have done that. It it's a very powerful way of changing willingness to pay. >> What are some of the other examples of businesses that have done that? >> So, Seedlip, are you have you familiar with that? >> Is that um it ah well very it's a basically a fake gin. So, it's a non-alcoholic gin. Yeah. >> And what they did though brilliantly. They sold maybe two or three years ago, I think tens of millions to Diego. Um, this is

10:51 phrased on the bottle. I think it's a distilled non-alcoholic spirit. It sells in the spirits aisle of Tesco's and sainsburries, but the kind of non-alcoholic end. Uh, the imagery on the front is like, you know, beautiful drawings. Looks like a craft chip. And it sells for about 20 a bottle. Now what people think is well you know a fancy craft gin sells for about £30 a bottle. This stuff hasn't got any alcohol in so I'm not prepared to pay as much but you know £20 bit expensive but it's £10 less that seems you know reasonable. I'll buy it. >> Now think about an alternative universe where that brand was launched as a cordial which is what it basically is. If it was launched in daylow colors next to the ryena, next to the Robinson squash, now people might be prepared to

11:39 pay, I don't know, double what you pay for Ryan and other fruit cordials, but they wouldn't pay five times or six times as much. Even if this stuff tasted like the nature of the gods, people wouldn't pay that kind of premium. So, it's about where you set your benchmark, you know, people will adjust from that comparative benchmark, but the general finding is people don't adjust as far as they should. So, you throw out this super expensive benchmark through design or comparison set and then as a business you you you reap the benefits. >> You know, it's an interesting example of this. in the UK. They're a a co-investor in Newtonic, which is what makes me think about it. Grenade bars. You familiar with them and their story? >> Uh, I'm familiar with the brand, but not the story. So, I know the kind of

12:25 protein bars and >> correct. What are you looking at for the next one? Look at the numbers. Look at the price difference between them and a chocolate bar. They out sell Cadbury's >> on the forcourt >> and they've got pride of place. Well, why? It's because they're probably more than double the maybe triple, maybe quadruple the price and it's because they moved themselves out of the category of look at you. There you go. Writing it down the next. No, no, no. Get it down. Get it down. Um Alan Barrett, who's the >> the founder of Grenade and Newtonic investor, is just it was such a genius insight that there was an upper bound of how much people were prepared to play for a a chocolate bar. But when it's oh, it's protein. this is good for me. It's a better for you treat. It still tastes

13:12 sort of comparable, but I have way less guilt and it's got all of this added advantage of it hitting my protein target for the day. And uh yeah, they they now are more expensive and do higher volume. >> Now there's a double benefit there which is people have another rule of thumb in their head which is price equals quality. >> So high price is a badge of quality. There's a study from Babashib who's at Stanford. It's a really nice slightly kind of duplic study with a bit of subtifuge. He um gets a group of people. He serves them five different bottles of wine. And each of these wines has a very prominent price label. But the twist in the experiment is there are only four different liquids. So one of the wines

13:58 is repeated. So people get to sample each of the wines. They have a tiny little sip from each of the bottles and they will drink say a cabinet so thinking it comes out of a $5 bottle and they'll rate it as kind of mediocre. Few minutes later they're drinking exactly the same wine but it comes out this fancy wine bottle. It's got this big $45 price label and when people rate it, not only do the qualitative adjectives get a lot better. When they come to the quantitative scoring, people give it a 70% 70% higher score. M >> so according to Shiv people to a degree not completely but to a degree they experience what they expect to experience and one of the best guides to what thinks going to be great

14:44 is what a brand's charging cuz we have a rule of thumb in our head which says look if a a brand is brilliant is created an amazing product surely they're going to maximize their profit surely it's going to be at high price you know only someone who has a bit of a mediocre product would sell it at a cheap price. >> So the actual high price also then will support the grenade bar perceptions of quality and those perceptions will translate into actual experience. >> Interestingly around that we are currently the most expensive energy drink category product available on the Morrison's local meal deal. So, if you get a Sainsbur's or a Morrison's local meal deal, and this is going to be

15:30 fascinating to see what happens. So, uh I think we're launching in Sainsbury. I probably shouldn't say this. [ __ ] it, whatever. I've said it now, but I think we're launching in Sainsburries at some point within the next month or so. And um on the [clears throat] meal deal, I don't do people I don't think people in America have meal deals. >> This is a this is a big problem with America. I'm going to I'm going to It is absolute sacrilege. >> America sucks at sandwiches. America absolutely sucks at sandwiches. What I want is a high quality brown bread, slice of brown bread, two of them cut into triangles. I want them cut diagonally and I want them filled with some salad and some chicken and a bit of mayonnaise. And I cannot buy that in America. I can go to Subway or I can go to like Mikey's Subs or whatever, but

16:15 I can't I can't get that. Anyway, in the UK, this is kind of everybody's lunch in one form or it's probably quite on brand what Americans think about British people, too. They get a lot of sandwiches. >> Uh, you can get a sandwich, some sort of mane, some sort of side thing, and a drink. And it's usually five between4 and5 something like that. Now, >> you're able by bundling these together with a bottle of water and a sorene and something else, you're able to get a discount. what we are because of how high we've priced ourselves, but because we still sit in the premium meal deal category. What we're going to be fascinated to see is whether or not people think, I want to maximize my buying utility. Ooh, I got an even bigger discount cuz I got that really expensive productivity drink with all of the the the additional stuff in and I

17:02 got that as a part of the meal deal. And uh I'm going to be really interested to see if that grenade effect is going to is going to happen to us, too. Yeah, I think that'd be that'd be fascinating. I think there's maybe two bits going on. You've got this uh sense of getting a bigger discount, but I wonder if there's another part which is it won't damage perceptions of quality because maybe it's seen as gaming the system and getting a little, you know, um you've kind of they haven't even noticed this. They didn't even >> Yeah. I think that that that hopefully will maybe protect you from some of that degradation of of perception otherwise. >> A quick aside. Do you remember learning about the mighty mitochondria back in grade school? Here's a quick refresher. It's the tiny engine inside of your cells that powers everything you do. But

17:48 here's what they didn't teach you. As you age, your mitochondria break down. That's what can cause you to feel tired more often, take longer to recover, and wake up feeling like you're never fully recharged, no matter how long you sleep. I started taking timeline nearly two years ago because it is the best product on the market for mitochondrial health and that is why I partnered with them. Timeline is the number one doctor recommended uraliththin a supplement with a compound called Mtopure. Basically, it helps your body clear out damaged mitochondria and replace them with new ones. Mitoure is backed by over 15 years of research, over 50 patents, and nearly a dozen human clinical trials. It was recommended to me by my doctor, and that is why I've used it for so long, since way before I knew who even made the product. And best of all,

18:34 there's a 30-day money back guarantee, plus free shipping in the US. And they ship internationally. Until the end of January, you can get 30% off a 1 month supply by going to the link in the description below or heading to timeline.com/modernwisdom30. That's timeline.com/modernwisdism30. All right. Talk to me about the genius of Guinness. I've been blown away by what's happened to Guinness over the last 5 years. It's [ __ ] spectacular. >> Yeah. And you know, the some of that power of Guinness has been phenomenal. You know, product uh creation. The Zero product Guinness Zero is phenomenal. It's I think the only alcoholic beer which tastes anything like its um parent brand. So, there's some amazing product development going on. But in the book,

19:19 Michael and I talk about a very specific campaign. So we talk about this idea of good things come to those who wait. And to me, that is an amazing example of what's known as the Prattful effect. So the Prattful effect is the argument that if you admit a flaw, if you're open about a weakness, you become more appealing. So the initial experiment was done all the way back in 1966 by Elliot Aronson at Harvard. simple study recruits a colleague from his university gets that colleague to take part in a quiz uh he's given Amazon has given the contestant all the answers so the guy does amazingly well gets 92% of the questions right wins the quiz by miles looks like an absolute genius but then

20:05 as the quiz is coming to a close he makes what someone in the 1960s might have called a pratful he spills a cup of coffee down himself now Aaronson has recorded all of this and he takes the recording and plays it to listeners. But sometimes he plays out the full version to listeners so they get the spillage and the great performance. Other times he edits out the spillage. What Aronson finds when he questions everyone as to how appealing the contestant is is this slightly counterintuitive result. He finds that there is a greater preference amongst the group who heard the spillage compared to the group who just heard the amazing quiz performance. And it's not a small difference. The people that heard

20:52 the spillage and the great performance, they rate the contestant 45% better than the people who just heard the amazing quiz performance. So he calls this the pratall effect. essentially this idea that people or products and there are some nuances here but people or products that exhibit a flaw become more appealing and I think that's at the very heart of this Guinness line you good things come to those who wait you don't try and sweep under the carpet you don't try and airbrush out the irritation of the delay of Guinness what you do instead is lean into it because people assume if it has you know taken a lot of time to make it must be higher quality. I think that's at the heart of the probably the best ever Guinness campaign. >> It seems like there's two things going

21:37 on. One is identifying the flaw. The second is kind of an IKEA effect craft. It's taking a while to make thing. So, if it wasn't for that, I mean, I guess you could I I've heard rumors that websites like Skyscanner, they could load all of their results immediately. The reason that they have the loading bar is to do the look at how hard we are searching for you. We are getting you the best deals possible. It is taking so much time. [ __ ] there it's done. >> Yeah. Well, I don't know whether Sky Scanner artificially slowed things down, but there are definitely experiments that show if they did it would increase people's sense of the results being comprehensive. So Ryan Bell at Harvard

22:24 Business School ran a study into this and he randomizes people into two groups. Some people use a Skyscanner style site and they are given their results immediately. other people the site is slowed down and on the results page rather than the results popping up immediately there's a little bar that appears that goes round and round saying searching Alia searching United searching British Airways and that group have to wait a couple of extra seconds and that group rate their results as I don't know it's something like 10 or 15% more comprehensive >> than the first result first group you there's essentially a rule of thumb in our head you know often called the kind of labor illusion. The more effort we think someone else has gone to create a

23:11 product, the higher quality we think that product will be. Even when people are getting exactly the same uh beer or exactly the same vacuum cleaner, if people know about the stories of effort behind it, it changes their their perceptions. >> I remember a short from some seminar that was given by an advertising guy. maybe it was a designer or something like that and he's sort of talking to a room and he says if how much would you pay for me to design the logo for your company and the guy gives a number and he says what if I can do this in 60 minutes and the guy said I'll give you less. >> Yeah. >> He says well hang on a second does that mean that you would pay me more if it took me longer and he just explains this effort illusion thing perfectly. Yeah, it's um I mean it's in the the book the

23:57 brand that I think really leans into this illusion of effort is Dyson. So across all their communications, you know, PR advertising the website, you know, even the very first line of James Dyson's autobiography, they keep on referencing this number. James Dyson says, "I went four years. I went through 5,127 prototypes before I created the bagless vacuum. Now, logically, or at least from a very narrow-minded logical perspective, how many prototypes he went through is irrelevant. What people should care about is the beautiful design or the quality of how well it sucks up dirt. But what behavioral scientists have shown is again and again if you show people the same product

24:44 sometimes you tell people the amount of prototypes or the amount of effort that went into it sometimes you don't you get these wildly different scores wildly different perceptions of of premiumness. [snorts] So absolutely emphasizing effort creates a perception of quality. What is the advent of AI doing to the advertising landscape in that case? Because what we're doing here is basically undercutting the illusion of effort. >> Yeah. Abs. Absolutely. So there is a Dutch psychologist called Kobe Millet uh VU Amsterdam and he was interested in that back in 2023. Runs a simple experiment. He shows people products. So sometimes one of the products was a poster of a a skull and sometimes he

25:31 labels it as handdrawn, sometimes he labels it as created by uh an AI powered robot. >> Mhm. >> And people are asked about the artistic merit of the poster, the creativity of the poster and crucially purchase intent. Now for every single metric he sees the same pattern. people who who saw the handdrawn label, they rate that poster better than the group who saw the AI powered label. And the scale is quite surprising. Now, when it comes to purchase intent, there is a 61% difference. Now, Millet's explanation for this is the illusion of effort. He says people's personal experience of claude or chat GPT is that they will

26:18 spit out an answer in a few seconds. So therefore we think it's low effort. So if we tell people our product has been created by AI, >> all things being equal, that product will be rated worse than if people are told that it was handdrawn or or made through human effort. So, so you've got to be really careful as a business when you're bringing AI into your products. Now, I'd be a lite to suggest don't do that. >> But what you have to do is be aware of the illusion of effort and therefore shift the conversation. You know, shift the conversation away from how quickly the product was delivered to how much effort you put into setting up the protocols and processes to get this uh AI system set up in the first place.

27:03 I think this is one of the reasons that people have an ick around AI music. There's a lot of that at the moment. Spotify has a bunch of charts that are being dominated by AI bands. And an [clears throat] interesting realization I had. So the illusion of effort idea that you were talking about, everybody knows, everyone that's ever tried to sing or pick up a new instrument realizes just how difficult and inaccessible it is. That I think gives music a kind of protected class that people it's inaccessible to most people. I can't read music. I don't understand how it works. I know what I like, but I can't recreate it. If you gave me any of the instruments, including the one that I was born with that's at the front of my face, I wouldn't be able to make the sounds of

27:49 the songs that I like. And that I think makes it feel particularly egregious for someone to jump over it. I wonder whether there's an equivalent where it comes to art as well if somebody's drawing something. So, I'm not particularly good at drawing, but I can get an AI to do it. But the fact that I've skipped the queue of something that used to be a reliably costly signal of competence and effort, uh, the fact that I've circumvented that feels sort of additionally unfair. >> Yeah. I mean, that might well be true. I mean, what the experiments are very clear on is if you look at these metrics for, you know, how much you're prepared to pay or how good quality you think the item is, if people see exactly

28:36 the same products, you change this labeling and you get a a different score. Um, and it does extend beyond music. So, you've got Millet's work with, you know, art. Uh, I did something with Michael and Flicker just showing people a a fake new brand. We didn't say it was a fake new brand, but we showed them these pictures of a brand called Black Sheet Vodka. And sometimes we said, "Look, the designer went through 143 iterations." Other times, we just showed them the picture of the the bottle. And the people that saw that story of effort, they thought the bottle design was more beautiful, significantly more beautiful, than the people that um didn't hear that story of effort. So, so it certainly seems to extend beyond what we might think of as art into commercial

29:23 design all the way through to estate agent services uh have been shown to have a similar similar effect >> on the Guinness thing. What do you make of splitting the G? Have you seen this? You've seen >> I have my um I went to the Guinness storehouse, the giant um you know kind of uh brewery tour you can do in Dublin. I went with my son. I think it was last uh summer and that's or maybe summer before that's when I was introduced to this. He was trying to show me how to do it. I mean, it's adding a bit of fun to the experience. I think Guinness themselves um try not to promote it cuz it's probably a little bit dubious in terms of of kind of safe drinking, but I think it's an organic thing that, you know, gets the brand talked about, adds a bit of excitement and uncertainty. in

30:11 >> I'm I'm fascinated by these things that are bottom up almost anti-marketing campaigns. I think that it it's a kind of like a perpetual motion machine for a brand. I think uh white monster energy has the equivalent at the moment as well. It's almost a meta meme. It's Americana. It's WWF from the '9s. It's Creed and New Metal. It's it's heavy hits in the NFL. It's Lincoln Park and Transformers, the early the early movies. It It's all of these things. And at no point, as far as I can see, has Monster Energy pushed this white monster thing in the same way as splitting the G from Guinness. Just

30:56 they did not place the word Guinness on the side of that pint glass at the point that would be twoish mouthfuls, two and a half mouthfuls deep. Hard enough to make it hard. not so hard that you have to drink it up. They It's just the way it's done. And then this now has been pushed out so much. I don't know whether you saw the stories from last summer in the UK, some pubs made people buy two or three drinks before they could buy a Guinness. >> You weren't allowed. You weren't allowed to because they had Guinness shortages. >> They had such a Guinness shortage they had to [ __ ] titrate the supply to customers. >> Yeah. So, two things there. But first, I wonder if there's an element of, you know, that supposed I think it's Arnold Palmer, the golfer's phrase, you know,

31:42 um, the harder I practice, the luckier I get. I wonder if there's something akin to that in the world of brands in the the bigger you get, the more enjoyable people find your kind of communications, the warmth of the brand, I think the more likely these spontaneous ideas are going to spring up. more people, more chance a drinker comes up with the idea. And also, I think if there's warmth towards the brand, they're more likely to do it. >> So, I think that that that, you know, you might have this kind of Matthew effect of to the best brands, you get the best organic um ideas, >> but that second point you mentioned is around the the shortage. Now, I'm not claiming in any way that Guinness actually did this, but I think if I was a brand, I would certainly be tempted occasionally to spread rumors of a uh a

32:29 shortage. >> The most powerful ideas in behavioral science, the one that when psychologists try and do comparative ranking of some of these biases, the one that comes out towards the top again and again is scarcity. You know, we want what we can't have. Um, there's this amazing GK Chester phrase where he says, "The way to love anything is to realize it might be lost." And I think you get these stories in the press about there going to be a shortage. And then it will drive even greater demand because that fear of missing out, that fear of um or that belief that lots of other people want this thing, you know, it it powers um the desire for it. Before we continue, I am a massive fan of reducing your alcohol intake, but historically,

33:16 non-alcoholic brews taste like ass. You don't need to be doing some big reset. Maybe you just want to crack a cold one without feeling like garbage the next morning, which is why I am such a huge fan of Athletic Brewing Co. They've got 50 types of NAS, including IPAs, Goldens, and even limited releases like a cocktail inspired Paloma and Moscow Mule. And here's the thing, you can drink them anytime. Late nights, early mornings, watching sports, playing sports, doesn't matter. No hangover, no compromise. And that is why I partnered with them. You can find Athletic Brewing Co.'s bestselling lineup at grocery or liquor stores near you. Or best option, get a full variety pack of four flavors shipped right to your door. Right now, you can get 15% off your first online order by going to the link in the description below or heading to

34:02 athleticbwing.com/modernwisdom. That's athleticbwing.com/modernwisdism. Speaking of another pretty interesting brand, Red Bull Guinness, Liquid Death, pretty disruptive, I think, for a water company. I know they're now moving into a lot of other products. How what what's your perspective on Liquid Death? >> So, I mean, I think it's a a fantastic uh marketing case study. um because if there is one factor that captures attention, it's behaving distinctively. So the original studies into this were done all the way back in 1933 by a German psychologist called Headvig von Restof who was the University of Berlin. And what she basically did I mean with a

34:47 bit of um you know changing she she'd kind of give people lists of of words. So, I might write down, let's say, 10 words, give them to you. Nine of them would be items of furniture, one of them would be an animal, and then I would take those lists away, ask you what you could remember, and overwhelmingly people were much more likely to remember the distinctive animal rather than the um the kind of nine bits of furniture. So, her argument was we are hardwired to notice what's distinctive. Now that is a very very well-known finding. It's been repeated over the last kind of 90 odd years. But if you think about an awful lot of advertising,

35:34 brands end up aping the behavior of their competitors, you know, you look at watch ads, you know, they all follow the same formula or car ads, you know, in Britain, it's always kind of seems to be a kind of central European dusty mountainous scene with them going round the the corner. Now again and again these norms of behavior spring up and when it comes to water there were some you know traditions that every brand like um Perier or all the others seem to adhere to which is you you've got to have clear glass so people can see the purity of the product. You've got to have shots of nature. You've got to um you know have alpine scenes and and yoga moms. And I think what Liquid Death did

36:21 so brilliantly is realize, you know, all this stuff is just there for tradition sake. You don't need to communicate in that way. And actually, if we take the polar opposite approach and we behave like a craft beer or an energy drink and have these outrageously gory ads and you know um uh out there humor that will stand out. It'll get attention and frankly if you don't have attention everything else you do in markets communication is academic. So I think that relentless pursuit of uh being distinctive and then crucially being distinctive in a consistent way. They didn't have one ad that was out there in a certain direction and then a completely different one uh the next time. They all had this theme of kind of behaving like a heavy metal band or a

37:06 craft beer brand. So so they had this um recognizable way of breaking conventions. I think that is at the heart of of their American success. How important is humor? >> Humor. Yeah. Absolutely. So, Mike Cesario, the founder of Liquid Death, he he talks about the fact that he found it strange that uh the like beers and crisps and candies, they had all the fun when it came to advertising. And the healthy virtuous goods were all a bit hair shirtist in their communication. So they have definitely doubled down on being funny and humorous and again you know it's a great way of

37:54 attracting attention that the the ethmology of advert is the Latin I think for turn towards and what do people turn towards? They turn towards things that bring them pleasure and happiness. They turn away from dry dusty information. So to get attention one of the best things you can do is is amuse people. What about Hogen? That's uh a brand that I kind of forgot about in the US because I I don't think that DRO is as big quite as big over here. Ben and Jerry's and there's sort of three buckets of ice cream. There's very uh sort of experimental stuff. The Ben & Jerry's would go into that. There's healthy craft, better for you, Amy's ice

38:43 cream type stuff. Uh, and then there's the high protein, good for you, uh, lower calorie. Uh, so Häenas, I forget about, but I know that they're a monster of a brand. >> Yeah. So, the origin story of Hogandas is, I think, fascinating, and it is a little bit dubious. I'm not saying I would recommend exactly what they do to other people, but they were set up in the Bronx in the 1940s, maybe the very early 50s, and they were set up by a a Jewish couple who had immigrated from, I think, Ukraine and Russia. and they had moved to New York, kind of gone into the family ice cream business and they

39:30 decided they wanted to launch this premium sophisticated ice cream. They want to charge a lot more for it than the the competitors. And they thought, well, how do we create this image of sophistication? Well, why don't we essentially position this brand as being Danish? Now, there's nothing at all Danish about Hogen. It was created in the Bronx. Um the couple had never ever been to Denmark. I think they chose it because Denmark had a particularly um strong reputation that it had the populace during Second World War had done an awful lot to help Jews escape from uh the the Nazis. So there was a

40:15 lot of admiration I think for Denmark in particular but basically they wanted a a kind of European country that felt a bit sophisticated. So even though they hadn't been to Denmark, they start generating names and they come up with Handas and if you go to a Dane they'd be like this isn't Danish. This is, you know, we don't have I think um over the uh a we don't have zs in our name. It you know, it doesn't even make sense as a Danish thing. >> But to American ear in the 1940s, it sounded Danish. And then the couple doubled down by putting a little map of Denmark on the on the on the tub. And what's so clever about this, albeit morally dubious, we can maybe talk about that, is people taste what they expect to taste. And if you wrap up a product

41:01 in this aura of sophisticated provenence, people assume it tastes better and then they go out and look for confirming evidence. So exactly the same ice cream tasted that little better little bit better to an American palette because it had this uh set of associations of of of Danishness. >> Where do you think what Go ahead. Oh, all I was going to say is I the moral from this and I I'm aware of what is quite charming when it's a mom and dad brand is one thing. When it's a multi-million dollar brand, it's a little bit less charming. >> But the the I think the lesson is what we experience isn't just due to the physical product. It's not due to the, you know, the just the milk and the fats and the the sugars. It's also what we think we're going to taste. So the the

41:48 color of the packaging, the weight of it, the story behind it, the provenence, you know, all these things are just as important and and you as a marketer need to create those positive perceptions to give your product the best chance of success. >> What do you think it is about the Danes that suggest that they're good at ice cream? >> I I think it's the fact that it was a far away country that, you know, Europe, rightly or wrongly, probably had this aura of sophistication. It's where luxury brands came from. It's where, you know, Renaissance figures came from. I think it was a sense of Europe having some of these values and then doubling down on Denmark because for a Jewish couple, their like history of um the fighting against anti-semitism was something that would have appealed. I think that was the the case of why

42:35 Denmark in particular is more a personal story to them. >> What about the pumpkin spice latte? I know that we're into spring now, but the >> Starbucks Yeah. Fall or whatever it's called. >> Yeah. >> Yeah. Yeah. Yeah. But we're into we're into >> Oh, sorry. No, >> spring shortly. So, the pumpkin spice latte is very long gone. Uh, yeah. What did you learn about Starbucks? >> I think the point there is the time-specific nature of the pumpkin spice latte. So, you know, we've talked already about this idea of of scarcity that we want what we can't have. The brilliant thing about pumpkin spice latte is they launch this product, they have huge success. What 99% of businesses would have done is think, "Wow, we've got this cash machine of a

43:22 brand. Let's just run it all year round and let's maximize our profits." And if a business had done that, it would have been super successful for a year or two, but probably over time, they would have lost the very kind of magic at the heart of that that variant. So there's an idea called uh habituation which is the idea that over time we become a bit desensitized to enjoyment. So there's a study from Leaf Nelson at NYU which demonstrates this quite powerfully. He lets people experience a massage chair and it's a very pleasurable massage chair and some people just sit in the

44:08 chair for 3 minutes 3 minutes straight and then they rate how much they enjoyed it out of nine and the average rating is 6.05. Other people there's a 1 minute 20 second session in the chair. They then turn the chair off for 20 seconds and then there's another one minute 20 seconds with the chair going. So lasts for three minutes, but there's no massaging going on for 20 of those seconds. Now logically you'd expect, well surely this group will enjoy the experience less. They had less time with the the enjoyable aspect. But actually you see something quite different. The rating actually goes amongst this group to 7.05 5 out of 9. So from 6.05 to 7.05

44:55 you get a 17% improvement. What Nelson argues is a curse of human nature is that when we experience pleasurable over time the enjoyment level waines because we stop comparing it to not having it. We we compare it to the last time of of of of using the service. So over time we habituate. get used to these pleasant things. >> So, I think with something that's very powerfully flavor like the pumpkin spice latte, something's a little bit strange, they'd sold it all year, by the sixth pumpkin spice latte, by the time you got to [laughter] December, you'd be sick of the bloody stuff. >> Yeah. >> But by stopping it before that happens, removing it from sale, what you allow is

45:42 this appreciation, anticipation, and desire to grow back again. M >> I think they turned something that would have lasted for a couple of years if it been permanently on sale into something that's been going for about 20 years. >> Wow. Yeah. The uh LTO, the limited time offer, the sort of drop model as it's known. It's how Supreme the clothing company do their things. It's how a lot of clothing companies independent and big buildup build up build up. It's there and then it's gone. >> Yeah. and and and actually you you can you can actually spot this um if you look hard enough um in in in products where it's not immediately apparent. So so one brilliant example is do you remember Wordle? So that uh game

46:29 I think you had was it six goes to guess a fiveletter word >> you know hugely popular uh Josh Ward the designer sold it for New York Times I think for about $10 million now at the height you had hundreds of millions of people playing this game or tens of millions of people playing it but what's interesting is even though usage spiked during co this um product had been around for ages but when Josh W first created it, the difference was you could do your Wordle game and as soon as you finished you could do another and then you could do another and then you could do another. And when it was set up like that, barely anyone played it. He had it was like dozens of people playing it a day. But then during co Ward

47:15 becomes slightly obsessed with the New York Times crossword and he wonders to himself, do I love the crossword? Because once I finish the cryptic crossword, I have to wait till tomorrow to get the next one. And it builds this sense of anticipation. So he changes the programming of Wordle so that now you do one, you finish it, you can't do another. There are no more around. You have to wait till the next one's released in 24 hours time. >> And he attributes the success to kind of baking in this this scarcity, baking this limited time offer into the very the very heart of the product. We'll get back to talking in just one second, but first, if you have been feeling a bit sluggish, your testosterone levels might be the problem. They play a huge role in your energy, focus, and performance. But most people have no idea what theirs are

48:01 or what to do if something's off. Which is why I partnered with Function because I wanted a smarter and more comprehensive way to actually understand what's happening inside of my body. Twice a year, they run lab tests that monitor over a 100 biomarkers. They've got a team of expert physicians that analyze the data and give you actionable advice to improve your health and lifespan. Seeing your testosterone levels and dozens of other biomarkers charted across the course of a year with actionable insights to genuinely improve them gives you a clear path to making your life better. Getting your blood work drawn and analyzed like this would usually cost thousands and be a nightmare. But with function, it's just $499 bucks. And now you can get an additional $100 off, bringing it down to $399. Get the exact same blood panels that I get and save a h 100red bucks by going to the link in the description below or heading to

48:46 functionhealth.com/modernwisdom. That's at functionhealth.com/modernist. One thing that I think about when it comes to modern marketing, influencers, the the world of influencer marketing, what do you think people are getting wrong with that? What what are the areas that that goes well and what are the areas that that fails from a behavioral science standpoint? I >> I think when it goes well, there is an idea called the messenger effect. So the original study was done back in 1953 by Hoffland and Vice. They were at Yale at the time. It's it's quite a nice study. They um they stop people in the street and they ask them a topical matter of the day like can we can the US build a nuclear power submarine in the next 12 months. People say yes or no. And then

49:34 once the psychologists have got the answer, they invite those people back to their lab in 4 days time. And when the participants arrive at the lab on a table there is a A4 sheet of paper and there is a very tightly argued um bit of pros about why the participant is completely wrong. So if I said yes a submarine can be built very powerful argument about why it's just not practical. Once people have read this argument they have to say whether they've changed their opinion. Most people don't. But the twist in the experiment is sometimes the argument is attributed to a credible source. So in the case of the submarine it was Oenheim the physicist. Sometimes the argue was attributed to a

50:20 low credibility source. So PRA the Russian newspaper. And what the psychologist found is that if the argument was attributed to a low credibility source 7% changed their mind. High credibility source 23% changed their mind. So even though everyone gets exactly the same logical argument, the same facts, the same figures, the same um uh persuasive power of argument, you get this three and a halffold difference in influence dependent on who it came from. >> So their argument was who says something can be as important as what said. >> Mhm. >> Now that study was done what 73 years ago. But yeah, but but it's been repeated again and again. I'm just going back to the original one cuz I think it's the clearest. It's the the simplest.

51:07 >> But since they've done that, what people have started to look at is well, what makes for an effective messenger? And many different variables. Three of the big ones are the messenger is neutral. So if I tell you amazing, uh, my book's amazing, you might be skeptical. Even if I got my brother or my wife to tell you that, it's still even that tiny extra bit of neutrality will boost believability a bit. So neutrality is important. Credibility is important and that's why Open home is so powerful. But then the third bit that's really interesting is relatability. Now, I might be influenced by what my neighbor tells me about, you know, the best sports drink or the best supplements, even though my neighbor doesn't know anything particularly in that area, but the fact that I relate to them, they're similar to me, it makes them more

51:55 powerful. So, I I think the argument with influence would be you could get the neutrality, but ideally, if you can get credibility and relatability as well, you know, then you're on to someone that can can change the the behavior of others. I was seeing some stories about experts expecting deeper creator partnerships. Sort of these mega creators they're called. So it's fewer long-term brand deals and they extend into roles like co-branded product lines or internal leadership titles. So I'm not sure if you saw this. Virgin Voyages named JLo as its chief entertainment officer. >> Okay. >> So they've framed her as the co-architect of the sort of onboard experience rather than just a face in ads. Uh, Ridgewallet just got Marquez Brownley, MKBHD. He's a big tech

52:40 YouTuber. He's the chief creative partner. And then, uh, Sofi just appointed the your rich BFF person, Vivian 2, as the chief of financial empowerment. So, they're trying to give a sort of an internal sounding role that legitimizes her as a a financial educator inside of the company. I think we saw this with maybe to a lesser extent Ryan Reynolds with Mint Mobile, but certainly Ryan Reynolds with the football team. Um, somebody smaller numbers of roles that are with higher value individuals with a more legitimate sounding position. >> Yeah. So once you start talking about the order of a a JLo, I think you start moving into kind of other behavioral

53:26 biases. There's an idea called costly signaling. So the original work on this was done by biologists rather than um behavioral scientists. But it's essentially the believability of communications is in proportion to the expense of that communications. So if there is a brand that gets a celebrity like JLo, you know, the the the general person in the street won't know whether JLo costs and I don't know whether she cost 100 million or 50 million, but I know she's very very expensive >> and that sends a credible signal about how much the brand believes in their offering. The argument being extravagant

54:12 advertising works in the long term. You know, if I uh hire JLo to advertise my terrible soft drink, you know, I might get people to try it once, but they're not going to recommend it to their friends. They're not going to come back. I'm going to go bust. But if I have a brilliant soft drink and I get JLo to be the face of it, well, then it works out for me because I know that people will try it, recommend it, and it will go on and on and on like that. So the fact that extravagant spend is an effective screening mechanism. Only people who genuinely believe in their brand would do it because if you thought your brand was awful, uh adopting that large S would would make you bust. That's I think what makes it a credible and powerful and persuasive

54:58 signal. >> What about KFC? We talked about Five Guys. What have you learned from KFC? So, so KFC, there's there's a few different things there. There's um I think the power of a a secret is quite interesting, but the other one that they did that I really loved was a bit more tactical, but it's it's kind of one of the themes that we've we've come back to again and again, which is um this power of scarcity. So, they they did a slightly different approach to the examples we've discussed so far. And there was a wonderful Australian campaign, I think it was back in first in 2016, where they would promote $1 chips. So you get these big large fries of $1.

55:44 Very, very good deal. And when they did it for the first few years, hidden in the tiny little um T's and C's at the bottom of the ads was the fact that you could only get four bags of chips per person. What the marketing team did was put that front and center of the messaging. So they tested loads of different behavioral science biases that could boost sales. The one that works best was saying big letters on the posters, maximum number of these bags of chips you can buy, bags of fries, four per person. >> Uhhuh. And and what it did was provide a very credible signal that either these chips are going to be so um enticing they're worried about selling out or that it's such a powerful and uh good

56:32 value deal that they're actually losing money on each day. >> Now that's not speculation. Um Michael Eron and I did a very simple test. We told people about Sierra Nevada paleo being sold in America. 12 bottles of beer for $18.99. And I'm trying to remember, I think 14% of people thought it was good value. And then other occasions we told people Sierra Nevada pale 12-pack of beer being sold for $18.99 in the supermarket. Maximum number of cases you can buy is six. And the proportion of people who thought it was good value went up to 22%. So you're getting something I think 57 59%

57:17 uh improvement. People worked a rule of thumb that if a business is not letting you take as much of a product as you want, it must be a good deal. It's either so good it's going to sell out or so good it's actually hurting the bottom line. So that to me was a like a wonderfully simple tactic that far more people could apply. It's so funny because KFC's fries are actually the worst. As everybody knows, they're the worst of all this. I >> Yeah, they're the worst of all of the fries. So, I I would not have leaned on the fries. I suppose what's interesting about doing it with the fries as well >> is that that is something which you are Burger King has fries and McDonald's has fries as well. You didn't pick something

58:05 that only you make. If you'd picked the signature Zinger burger, well, no one else no one else can make that. So, doing the scarcity on something which is an a non-competable good would probably change the framing of it versus these you can get elsewhere, but not like this. Yeah, I I think um I think it was a reasonably good deal, but there's whenever something's on offer, there's always a bit of suspicion as well, you know, have they cut corners? Is there some kind of >> they're trying to counter signal the discount? >> Yes. Yes.

58:50 Yes. I think um and and what differentiates it from just saying, you know, limited time offer or exclusive is it is it's not just staying in this realm of statement and claim. It's not just in this realm of talk being cheap. It's actually a physical restriction. You know, you go to Canada, they will not serve you more than four, you know. And I I think it's this action rather than claim that distinguishes it from the kind of more common use of of of scarcity. >> I can't believe that Cler and these companies I I thought what what are they called? Micro pay later companies. >> Buy now pay later. >> Buy now pay later things. Yeah. >> Um, and there was this joke that you

59:35 could get your Chipotle order on Cler, so you could get your burrito, buy it today, and pay for it tomorrow. Um, but the these just the same as the prediction market, these things seem to be here to stay. So, what's your perspective on the buy now pay later industry? So there there's a long-standing idea called the the pennies a day effect. So the original study was John Gville at Harvard and he did it with charities on a time. Um so essentially you know he he found out were people willing to donate to a charity and sometimes the request was $365 a year. Other times it was a dollar a day for a year. And what he

1:00:22 found is even though the sums works out to be the same, people were much like more likely to donate if you phrased it as a dollar a day. Now what seems to be happening is people give different weights to s two sides of the equation. You know the um the dollars that are being discussed looms larger bill's mind. The unit of time doesn't seem to be um given the weight it should be. So it's a bit like people think 3 * 7 is different from 7 * 3. >> So if you've got a timebased product, the more you can break uh or the more that you can discuss that product in the smallest unit of time, the better it works out for you. Now exactly the same thing happens with physical items. So I

1:01:09 mentioned that Sierra Nevada parallel study Michael and I did and we did another version of it. So key factor if you say to people a 12-pack of Sierra Nevada cost $18.99 you get 14% thinking it's good value. If you say to people this is a different group cost $18.99 for a 12-pack that's the same as $158 a bottle >> the proportion jumps I think to 29 or 30% thinking it's a a good deal. So that you break down a physical item into smaller subunits and you create a perception it it's better value. So one of the things Cler offers is now I go to a website I want to buy a jumper for $60. I don't pay $60 in one go. I pay

1:01:56 three lots of 20. People treat three lots of 20 completely different from one hit of 60 because they're focusing too much on the 20. they're not doing the multiplying as much as they should. So, you know, brands put that on their website, retailers put client or competitors on the website, they end up selling more. So, there is a strong reason for businesses to start handing over a bit of commissions to client. >> I'm interested in the difference between framing things as negatives versus positives. And it it seems like the the direction that you come into this from can be pretty important. Yeah. So so there's an idea called loss aversion. Um the original studies were

1:02:44 done by Carneverk in the 70s but they're a little bit bizarre and um just got a bit confusing. I think the much better study was done in 1988 by Elliot Aronson at Harvard. So what he does is go to homeowners, 404 homeowners, nice big sample, knocks on the door, tries to sell them loft insulation. Sometimes he says, "Buy my loft insulation and you'll save 75 cents a day." So a psychologist would say this is the gain frame. You're emphasizing what you benefit as a consumer by taking out loft insulation. But other homeowners, he gives them the same mathematical sum. He says, "Look, take out the loft insulation because if you don't, you'll be wasting 75 cents a day." Now, even though it's the same amount of money, by emphasizing people

1:03:29 could be losing out on that, they could be wasting that money, you got a 50 or 60% higher >> uh response rate. So, absolutely, there is an argument that the mathematically equivalent loss affects us more than the um than someone getting that that gain. You know, the way I'd put it is if you and I go our separate ways today, you realize you have lost $5, I find that $5, your unhappiness will be larger than my happiness. >> Certainly would be if I knew that you'd found my >> five. Oh, don't worry. I I wouldn't be telling you. I'd be keeping that secret. Yeah. Yeah. >> You just see me in a slightly fancier t-shirt next time we talk. It makes me

1:04:14 think about the uh antismoking ads because it's not saying if you stop smoking you will live four years longer. It's if you keep smoking you will die four years sooner. >> Yes. The only caveat there is when it comes you know the great thing like behavioral science and psychology it's not like maths where there people are particles and you know exactly the same um occurrences happen. I think there's a there's a bit of a complexity when it comes to humans and you know context is hugely important when it comes to going from a loss to engendering fear. M >> then I think you've got to be quite

1:05:01 careful >> why >> um there's an argument from people like George Loenstein uh he calls it the ostrich effect and it's essentially the argument that if you make people feel ashamed or scared or or too worried rather than resolve the underlying issue what they tend to do is behave like the metaphoric ostrich they just start ignoring the ads they stick their head in the sands. Now his study was probably done about 20 years ago uh when he was at Carnegie Melon and he is given anonymized data from Vanguard in America. So this massive um fund provider and he can see how often users are checking their stock portfolios. He then plots that against the movement in

1:05:47 the American stock market. And what he finds is as the stock market goes up, people check their uh wealth reasonably regularly. >> When the stock market declines, people stop checking. It's not a small effect. I think it's for every 1% drop in the stock market, people check their portfolios 5 to 6% less regularly. And his argument is from a narrow-minded

…