Monthly Archives: December 2013

When Mark Zuckerberg wore his hoodie to meetings with investors before Facebook’s IPO, some on Wall Street scoffed at his apparent immaturity and carelessness. However, that’s not the response most people have when observing another person engaged in non-conforming behaviour, according to new research from Harvard Business School associate professor Francesa Gino.

In a forthcoming paper in the Journal of Consumer Research, Professor Gino finds that people who stand out from the crowd are seen as having higher status than others.

Her experiments looked at everything from how executives responded to business school instructors who wore red sneakers to what luxury clothing boutique clerks thought of shoppers who came into their stores wearing gym clothes. And the study found repeatedly that such atypical clothing or behavior actually made others think more of the person, not less.

The social cost, or negative effect, of non-conforming behaviour in experiment after experiment appears to be missing. On the contrary, people see such individuals as “having the guts to do what they’re doing. They have points to spare. They’re such a high-status person that they don’t need to conform to the rules.”

That doesn’t mean you should ditch your fur coats and leather shoes; this perception only applies in certain contexts:

Of course, casual dress only translated into greater respect when the university where the professor worked was described in the experiment as being prestigious. When it was not, the inverse was true: The more formally dressed professors were seen as having marginally more status. In other words, it’s only when a more formal code of conduct is expected that violating it is seen as an act of autonomy.

When there are no rules, there is no merit in rule-breaking.

While Gino found that nonconformists tend to be seen as more competent in many, if not most, situations where they break the established norms, it doesn’t work as well if there’s a high level of familiarity, she says. “There needs to be some uncertainty about the real, objective status of that person” in order for the red sneaker effect, as she calls it, to work.


via Washington Post


How well do you recognise colour? More specifically, how well do you recognise brand colours? Blue is the most popular colour used by brands, and it’s no wonder an online quiz has come up asking you to name the internet company associated with a certain shade of blue. I failed badly, but maybe the lesson to take away from this is not my dismal colour acuity, but for companies to get away from blue.

Oh, and if you’re sick of grappling with Internet companies, you can try the game with NFL and NHL teams instead. San Diego Chargers or Seattle Seahawks?

Try it for yourself here. 

A lot of marketing money is moving into social networking sites. But for the most effective campaigns, one needs to find out how and why people are influenced by others in their networks. The type of message and nature of product may also matter, which is why Van den Bulte, Wharton colleague Raghuram Iyengar, and Jeonghye Choi of Yonsei School of Business have come together to develop a framework to tie the various mechanisms of social influence and product adoption:

To generate product buzz, for example, a campaign might reach far into a network with an attention-getting message. Seeding people with many indirect ties within a social network would be more effective than seeding opinion leaders. The opposite would be true if the marketing aim was to reassure consumers about product benefits. This campaign would favor trusted experts, people with many direct ties in the network as opposed to people with great indirect coverage.


The researchers suggest that social influence travels through a network via five mechanisms: by spreading awareness, through social learning or social-normative influence (adherence to norms of proper behavior), by creating competitive or status concerns, and/or by installed-base effects.

To test their framework, they tracked physicians’ adoption of a drug in Los Angeles, New York City, and San Francisco for seventeen months from its launch date. This new drug was used to treat a chronic, life-threatening infection and there was uncertainty about its risks and long-term efficacy. Given these high stakes, the researchers predicted, and found evidence, that social learning (about the drug’s risks and benefits) and social-normative influence were the mechanisms by which physicians influenced their peers to adopt the drug.

It’s never just about the opinion leaders – if it were so easy then why don’t marketers achieve success all the time? Marketing is a science, and it requires tweaking variables (the network, the opinion leaders, the message, the product) to pinpoint how best to reach an audience and have them respond.

via MSI

For someone who has always been skeptical of celebrity endorsement, I have to say I’m surprised by research done by Kevin Y.C. Chung, Timothy P. Derdenger, and Kannan Srinivasan. Upon examination of the co-movement in celebrity quality and brand sales over time, namely Nike golf balls and Tiger Woods, econometric analysis reveals that Tiger Woods’ endorsement induced consumers to switch brands, increased primary demand, and led to a price premium for Nike.

They determined that, from 2000 to 2010, the Nike golf ball division reaped an additional profit of $103 million through the acquisition of $9.9 million in sales from Tiger Woods’ endorsement. Moreover, his endorsement led to a price premium of roughly 2.5%. As a result, approximately 57% of Nike’s investment in Woods’ $181 million endorsement deal was recovered just in U.S. golf ball sales alone.

via MSI

“Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”

Which ads motivate consumers to buy? In a recent study, Evert de Haan, Thorsten Wiesel, and Koen Pauwels evaluated a wide range of new and traditional advertising methods: e-mail, TV, radio, product placement, editorials and public relations, paid search, portals, price comparison, referrals, and retargeting, to find out how each form of advertising affects average revenue and drives users through the online purchase funnel.

Advertising activities were classified on different dimensions: firm initiated versus customer initiated, content integrated versus content separated, the customer’s stage in the website purchase funnel, and mass versus personalized advertising. The team compared each ad form’s elasticity; that is, the percentage revenue gain from increasing ad expenditures by 1 percent. They also calculated the effect of advertising on users in each stage of the retailer’s website funnel.

Overall, customer-initiated contacts (CICs) were 26.7 times more sales effective than firm-initiated contacts (FICs) in their data set. Further, content-integrated advertising was about nine times more sales effective than content-separated advertising activities.

But the big winner was the combination of content-integrated advertising that was initiated by the customer. Content-integrated CICs—ads on Web portals, price comparison sites, and referral sites—were more effective in attracting people to the next stages in the funnel, increasing product-specific, shopping basket and checkout page sessions. This, in turn, had a greater impact on revenue: a 1% marketing budget increase in content-integrated CICs led to, on average, a .133% increase in revenue, compared to a 0.027% gain for content-separated CICs and an almost zero increase for FICs.

Unsurprisingly, content-integrated customer initiated contact – presumably relevant content consistent with information that consumers are voluntarily searching for – are more effective in generating higher average returns to the marketing budget. Time to reconsider that Super Bowl budget.

(via MSI)