See how advertising uses the biases we've covered: scarcity, social proof, the anchor price, the halo, and the decoy.
Advertising is applied bias psychology
The same buttons we already know
Advertising and marketing don't invent new weaknesses — they push buttons we already know. Recognize the technique, and it almost stops working.
— Scarcity and urgency. “Only 2 left!”, “Today only!”, a countdown timer. The fear of missing out (called FOMO) switches off slow thinking and pushes you to buy fast, without thinking it over.
— Social proof. “Bestseller”, “over a million happy customers”, lines and reviews. This is an appeal to popularity: if everyone's buying it, it must be good.
— The anchor price. First they show you an expensive option or an “old price” so the main price looks like a bargain (we covered this as the anchoring effect).
— The halo effect. Beautiful packaging, a celebrity in the commercial, a trendy presentation — and the product seems to be of higher quality.
— The decoy (a trap option). A deliberately bad option is added to the menu so that, next to it, the choice the seller wants looks like the sensible middle.
Noticed any of these techniques? That's your signal to switch on System 2 and ask: “Do I really need this, and at this price?”
Lesson notes
The same buttons we already know
Advertising and marketing don't invent new weaknesses — they push buttons we already know. Recognize the technique, and it almost stops working.
— Scarcity and urgency. “Only 2 left!”, “Today only!”, a countdown timer. The fear of missing out (called FOMO) switches off slow thinking and pushes you to buy fast, without thinking it over.
— Social proof. “Bestseller”, “over a million happy customers”, lines and reviews. This is an appeal to popularity: if everyone's buying it, it must be good.
— The anchor price. First they show you an expensive option or an “old price” so the main price looks like a bargain (we covered this as the anchoring effect).
— The halo effect. Beautiful packaging, a celebrity in the commercial, a trendy presentation — and the product seems to be of higher quality.
— The decoy (a trap option). A deliberately bad option is added to the menu so that, next to it, the choice the seller wants looks like the sensible middle.
Noticed any of these techniques? That's your signal to switch on System 2 and ask: “Do I really need this, and at this price?”
Decoy effect
The decoy effect is one of the craftiest. A third option, deliberately bad, is added to two others to nudge you toward the one the seller wants.
A classic example (described by the researcher Dan Ariely, based on a real subscription to The Economist). The options were:
— web only — $59;
— print only — $125;
— print + web — $125.
The second option seems pointless: why pay $125 for the print magazine alone when the same $125 gets you both print and web? That's the decoy. Next to it, the third option (“both for $125”) looks like “they threw in the website for free” and strongly pulls people toward it. Remove the decoy — and people start choosing differently, more often taking the cheap option.
The takeaway: the set of options is chosen on purpose so that the choice that's “right” for the seller seems like the obvious middle. The defense is to compare each option with your real needs, not with each other.