One year after the Ice Bucket Challenge, what now?

Remember the Ice Bucket Challenge? Where every second post on Facebook was of a mate tipping a bucket of ice water on themselves? And remember how you laughed hysterically at their reactions until you realised they just nominated you to complete the challenge next?

In Australia alone, there are now more than 60,000 registered charities with the ACNC and the amount of not-for-profit organisations are predicted to rise even further. Given that there are now so many charities competing for the same goodwill dollar, how can an organisation stand out from the rest?

To explore this question, we turn to the Ice Bucket Challenge – one of the most successful cause marketing campaigns in the history of advertising. The organisation behind it was the Motor Neuron Disease ‘MND’ Foundation (or Amyotrophic Lateral Sclerosis ‘ALS’ Foundation if you’re American). The rules of the challenge were straight forward enough: pour a bucket of ice water on yourself, challenge three other people to do the same and capture this process on camera. If you were challenged, but couldn’t (or wouldn’t) undertake the challenge in 24 hours, then you have to donate $100 to the cause.

The Ice Bucket Challenge

The challenge itself aimed to temporarily numb and mimic the loss of control over voluntary muscle activity of the body experienced in MND patients. It was a feel-good social phenomenon that achieved unprecedented global reach, raised awareness of a cause that was largely unknown to the average Joe and, not to mention, recorded a 3,500% increase in donations totalling more than $100 million raised globally. Not bad, hey?

There are three underlying reasons why the Ice Bucket Challenge was such a huge success:

  1. It was fun. Integrating an element of fun (or, in marketing jargon, gamification) into a campaign will make it more rewarding and engaging to the target audience. Although pouring a bucket of ice water on yourself may not sound like much fun, most of us won’t back down from a challenge.
  2. It was social. We all love to have a good laugh at our friends and watching them get drenched with a cold bucket of water surprisingly (or rather, unsurprisingly) produces great, shareable and entertaining content. The campaign itself also had a domino ‘pay it forward’ effect – once you got challenged and completed the task, you had the privilege of challenging three more people.
  3. It was easy. As an economist would describe it, the challenge had low barriers to entry (read, it was easy to get involved). All you needed was a bucket, some ice water and your phone to record, hashtag and post. The call to action was clear, simple and intuitive. Put simply, the easier it is for people to jump on the campaign bandwagon, the higher the social reach and the higher the number of donations.

One year on and MND Australia is still benefiting from the successes of the Ice Bucket Challenge. A large proportion of the donations have been funneled into further research for the disease which, currently, has no cure. Today’s Queen Birthday AFL match at the MCG also saw a fundraising campaign titled ‘Big Freeze at the G’. In support of Neale Daniher, a former Essendon player and Melbourne coach, the Freeze MND event saw several well known footy personalities slide into a giant ice pool, raising over $2.2 million in donations.

Big Freeze at the G

From a marketing and organisational perspective, the three elements of making a campaign fun, social and easy are certainly key to making any campaign a standout. A word of caution though to consumers – we are all susceptible to ‘funding cannibalism’. The money that we donate to MND (or any other cause, for that matter) just doesn’t come out of nowhere. We’re likely to irrationally justify our behaviour by thinking that because we’ve donated x amount to MND already, we should just adjust our giving budgets and donate less to our existing charitable commitments. So sure, pour a bucket of ice water on yourself or donate to the ‘Big Freeze at the G’, but do not lose sight of your other altruistic obligations. Rather than making a small donation to a charity that you don’t know much about, it would be much more worthwhile to make a lasting commitment to one that you know creates the greatest amount of good with every dollar (i.e. effective altruism). Sites like http://www.givewell.org/ are a great place to start.

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Why do we love our Ikea furniture?

I’m kind of smug about my bookshelf. The story behind this bookshelf is one that we’ve all heard before. It starts with a trip down to Ikea, tirelessly navigating our way through its maze like warehouse, potentially getting lost, eventually emerging at the checkouts, only to find that we need to spend another hour lining up in a queue. Yet, we are still not fazed. We enthusiastically – more often than not, frustratingly – spend the rest of the day assembling our treasured Ikea furniture and… voila!

The ‘Ikea Effect’

Now, there appears to be a psychological reason behind why we feel immensely proud of our Ikea furniture. This, as coined by Dan Ariely, is known as the ‘Ikea Effect’. Ariely suggests that when people imbue products with their own labour, the personal effort exerted increases their valuation of products. That is, the fact that we’ve invested our personal money, time and effort into assembling a piece of furniture allows us to feel a greater sense of ownership than if we just bought something fully assembled.

The challenge for marketers is convincing consumers to engage in the kinds of co-creation that will lead them to value products more highly, particularly given the general aversion to such pursuits. However, a fine balance needs to be struck. If you make a task too difficult to complete, consumers will give up, which creates an overwhelming sense of dissatisfaction and failure. Conversely, if you make a task too easy to complete, consumers will not feel that sense of ownership or attachment.

A perfect example of this is in the late 1940s when instant cake mixes were invented in the States. Originally, the cake mixes were introduced to simplify the life of the American housewife. All you had to do was open the cake mix, pour it into a bowl, add water, stir and pop it in the oven. These cake mixes were initially met by much resistance as it made cooking too easy, leading to housewives feeling their labour was inadequate and under appreciated. As a result, manufacturers changed the recipe to require adding an egg. It was an incredibly simple addition, but it made a world of difference and made housewives feel that they were adding a crucial ingredient into the fold.

1940s Instant Cake Mix Advertisement

As seen in the above examples, the inherent power of building personal ownership into a product should not be discounted. Recent brands, like Build-a-Bear, have also leveraged upon this phenomenon and seek to give children the opportunity to ‘create’ their own loveable plush toy. So, if you’re a brand and you want your consumers to really love your product, incorporate an element of the Ikea Effect into it and let your customers really own it!

How did diamonds become a girl’s best friend?

I have a friend – let’s call him Sam – who’s madly in love. They’ve been dating for years, things have gotten serious and they’re looking to settle down. Over the phone, Sam informs me that he’s going to propose (I offer my congratulations) and that he has grand plans for a wedding in spring (I’ll spare you the details). Sam – an oblivious guy – then proceeds to ask me – unbeknown to him an equally oblivious girl – about buying a diamond ring. No, not just any ring, but specifically a diamond ring. Being the commerce oriented person that I am, I launch into a rampage about doing a cost-benefit analysis, how it would be better to invest the money in assets that compound over time and the ridiculous nature of spending your life savings on a shiny rock. Sam simply replies by saying ‘happy wife, happy life’.

How have diamonds become the symbol of love, devotion and marriage? It all started with a stunningly successful marketing campaign by De Beers who coined the phrase ‘a diamond is forever’. De Beers is the world’s leading diamond explorer, manufacturer and retail powerhouse. Countless men, like Sam, will attest that the societal obligation of proposing with a diamond ring is what drives them to save up and spend up for a diamond that perches proudly on top of a ring. What many fail to realise is that this ‘societal obligation’ was wholly manifested by a company who were driven by their love of money.

A girl’s best friend?

Firstly, diamonds aren’t actually that rare. Over the years, De Beers has strategically and carefully restricted the supply of diamonds to keep its prices high and created the perception of rarity. Furthermore, the symbolism of love and longevity of diamond rings means that, once bought, they are unlikely to be sold and re-enter the market – therefore, reducing the supply of diamonds further. De Beers maintained its monopolistic control over the diamond trade for several decades and, by 1902, they controlled over 90% of the world’s rough diamond production and distribution. It’s all well and good to have an abundance of diamonds, but De Beers faced a problem. Europe was on the verge of war and the American market was declining due to the Great Depression. Enter: marketing.

In 1938, De Beers turned to Madison Avenue and hired an advertising agency for help. Diamonds were positioned as a gift of true, indestructible love and men were taught, ‘the larger the diamond, the greater the expression of love’. Similarly, women were encouraged to view diamonds as an integral part of any relationship. The diamond ring became a status symbol and celebrities were photographed and published in high-end magazines. Print advertisements also included reproductions of famous paintings and were intended to convey the idea that diamonds, like paintings, were unique works of art. Coupled with Marilyn Monroe’s famed rendition of ‘Diamonds Are a Girl’s Best Friend’ in a 1953 film, diamonds had become well and truly embodied in the tapestry of society.

De Beers’ advertisement

The finishing touch on De Beers’ monopoly was to maintain full autonomy over prices. De Beers circulated marketing materials which suggested that a man should spend one month’s salary on a diamond ring. In fact, this worked so well that they subsequently increased it to two months.

So, in short, what I’m really trying to say is that diamond rings are basically just a marketing scam.

Adding Life to Coca-Cola

There’s a reason why Coca-Cola is consistently ranked in the top ten of Forbes’ “World’s Most Valuable Brands” list.  Throughout the years, it has been a paradigm shifting, rule breaking, all-round marketing power house. It has produced some of the greatest campaigns in the history of advertising, ranging from its iconic glass shaped bottle, which has recently celebrated its 100th anniversary, to the ‘Share a Coke’ Australian promotion of 2011. This campaign recorded a total of 18,300,000-plus media impressions, an 870% increase in traffic on the Australian Coke Facebook site and led to Coca-Cola Australia’s most successful summer ever.

Undoubtedly, with increasingly health conscious consumers, Coca-Cola is desperately trying to win over the general populous after its introduction of Coke Zero in 2006. Recently, Coca-Cola Australia announced the latest addition to the Coca-Cola family – Coca-Cola Life. It is a version of Coca-Cola that contains lower calories than the original and is produced with stevia and 35% less sugar. Coke-Cola Australia will be challenging consumers to ‘Let Life Surprise You’ and will undertake a fully integrated marketing campaign over a plethora of media channels. The product also speaks for itself and the green packaging – a move away from Coke’s iconic red – is immediately perceived by both adults and children as a healthier and better alternative than identical food packaged in other colours.

Coca-Cola Life

In the United Kingdom, where Coca-Cola Life was launched in September 2014, consumers are struggling to identify the difference between all the varieties of Coke (that is, the original Coca-Cola, Diet Coke, Coke Zero and Coke Life). This has led the development of a ‘One Brand’ strategy, where individual brand campaigns will be scraped and the focus will be on clearly communicating product differentiation.

Despite Coca-Cola’s successes, there are signs of deterioration. In 2014, Coca-Cola’s profits declined by 14% and much of this can be attributed to a growing awareness of our health and wellbeing. Coca-Cola has tried to overcome this by introducing ‘portion control’ options – namely, smaller can sizes – which has been echoed by more and more American food companies. It also tried – and failed miserably – to position itself as being ‘part of the solution’ by supporting sport initiatives and encouraging people to drink Coke as part of a balanced diet with daily exercise.

The struggle of Coca-Cola to maintain its relevance is certainly a sign of the times. The evidence is conclusive – sugary soft drinks does contribute to the obesity epidemic and no amount of spin or PR can hide the fact that a can of Coca-Cola Life still contains colouring, caffeine, phosphoric acid and 19% of our recommended daily sugar intake. Ultimately, it appears that the introduction of Coca-Cola life is a decision to increase the health of the companies’ profits rather than the health of consumers.

 

 

Case study: The rise and fall of Abercrombie and Fitch in Australia

The increasing saturation of advertising communications within our environment has made it more difficult for businesses to get their promotional messages through to consumers. This has prompted a discussion of how brands may successfully leverage sensory branding across the marketing mix. The following article will analyse how Abercrombie and Fitch (A&F) have incorporated sensory experiences across the four marketing mix dimensions of place, product, price and promotions and how it has failed to tap in to the lucrative Australian market.

Place

Place, referring specifically to A&F’s stand-alone retail stores and its in-store layout, plays a pivotal role in determining A&F’s success. The stores, recognised by its loud music, dim lighting, attractive staff and scent applied “as liberally as if it were a teenage boy” are perfect for the A&F brand and their adolescent target market. A&F stores are staged with lights that showcase its clothes and plunges the rest of the store into darkness. The darkness of the store, in conjunction with the fast-paced music discussed below, constructs a unique, club-like atmosphere.

A&F’s signature mens fragrance, Fierce, is sprayed in-store to create an ambient scent that the company describes as “lifestyle… packed with confidence and a bold masculine attitude”. The congruency of A&F’s fragrance to its selling proposition enhances recognition and preference by linking smell exposure with brand identification. Spangenberg et al. (1996) found that customers shopping in a scented environment felt that they had spent less time in the store compared to one with no scent, which led to a more positive evaluation of their overall shopping experience.

Sound and music can also powerfully influence consumer behaviour below the level of awareness. A&F’s uses sound as a context and its loud, fast-paced and upbeat music is likely to achieve two main objectives. Firstly, younger people enjoy and can withstand loud music for longer periods of time, while older demographics will choose to shy away from these environments. This ensures that stores are able to attract their desired youthful clientele and deter those who do not fit with A&F’s brand image. Secondly, loud music leads to sensory overload, which tends to weaken self-control and increases the likelihood of impulsive purchases.

Price and Product

Given its established brand, A&F’s clothing are priced at a premium compared to its competitors. In the fashion market, higher priced items are typically associated with quality or prestige. When knowledge of intrinsic qualities, like the durability of fabric, are limited, consumers rely on extrinsic cues of pricing and brand name to aid their decision making. Coupled with its long standing pricing strategy of not placing items on sale, A&F is able to maintain its premium pricing, limiting their target clientele and not devaluing their brand.

Promotions

A&F billboard ad

A&F’s infamous promotions technique of hiring model-like sales staff has become an integral part of their brand. The presence of attractive personnel wearing A&F’s clothing leads to a higher degree of emotional arousal that captures our attention. This creates a ‘halo effect’; beautiful salespeople often means that we associate favourable traits, such as attractiveness and kindness, with the products they sell.

The majority of A&F’s advertisements are print billboards that display greyscale provocative images of young men and women (see above). These posters seek to capture consumers’ attention through emotional arousal. Ironically, it is the controversy over such advertisements that generate the greatest publicity and is the main source of A&F’s promotions.

Exit from Australia

A&F has a market capitalisation of $US1.4 billion and operates nearly 1,000 stores globally. Previously, A&F joined a host of other international brands like TopShop, H&M and Uniqlo who have opened up in Australia in the past three years. However, earlier this month, A&F announced that it will be closing its two Sydney and Melbourne stores after failing to attract the local market. Net sales were down 14 per cent to $US1.12 billion in the fourth quarter and compartive store sales fell 10% overall.

Given A&F’s successful differentiation in their marketing campaigns, it is surprising to hear this. The executive chairman, Arthur Martinez, has admitted that the Australian market was “even more challenging than expected” even after allowing for the seasonality changes of operating in the southern hemisphere. The loss of economies of scale in their production line could be factor. However, one of the most significant issues is Abercrombie’s failure to localise their market offering. Perhaps using Australian models or scenic landmarks would have been a better fit to their marketing promotions, or perhaps undertaking local social marketing campaigns to build higher relevance amongst their target audience would have also helped.

Either way, I don’t think this will be the last we see of Abercrombie and Fitch.

 

 

Marketing the Apple Watch

When Apple releases a new product out to the world, the rest of the world listens. (We’ll even get up at ridiculous hours of the night to listen.) How could we not? This is the company that revolutionised music devices, that brought user-friendly touchscreen phones to the mainstream market, that basically invented the notion of a tablet interface – in short, Apple has created a string of electronic devices that we, the mass market, don’t even realise we want (arguably need) before we see it. As Steve Jobs famously declared “It’s really hard to design products by focus groups – a lot of times, people don’t know what they want until you show it to them’.

Besides attaching the word ‘Apple’ to ‘watch’ (which, let’s face it, is enough to generate all the publicity it needs), Apple has laboriously and strategically planned out its marketing campaign from start to finish. Let’s begin with the options and the price. Business Insider informs us that there are three version of the Apple Watch, with each version coming in two screen sizes. The cheapest watch, the Apple Watch Sport with aluminium casing and a rubber strap, starts at $US349. The most expensive Apple Watch Edition, made of 18-karat yellow or rose gold, will range from $US10,000 to $US17,000. (That’s approximately $24,000 AUD folks!)

Source: businessspectator.com.au

Becoming a ‘technology-based luxury brand’

Apple initially signalled its strategy to become a ‘technology-based luxury brand’ by famously hiring Angela Ahrendts – the former Burberry CEO who is renowned for turning the brand around from its mid-2000s decline. After the appointment, we have seen Apple consistently place an extra emphasis on design and style during the creation of the watch, led by Apple’s lead design chief Jonahan Ive. Within the industry, technology’s growing relationship with fashion is seen to be pivotal for new wearables. This makes sense: appealing to early geeky adopters will no longer cut it – wearables need to be aesthetically appealing to penetrate the mass market.

Apple’s price discrimination clearly seeks to differentiate its consumers and segregate them out into entering the market at different price points. The brand has worked hard for us to view the product as an ‘aspirational’ luxury item, particularly creating a gold plated watch that is (almost) the envy of all techies. These watches have starred in their own 12-page page spread in Vogue’s March edition which, reportedly, has cost north of $US2.2 million. (But, you’ve got to admit, nothing screams style and luxury more than appearing in Vogue.) Limiting the distribution channels of these Apple ‘Edition’ watches to only a select few up-market retailers also seeks to create a sense of scarcity, status and prestige.

The market

It’s all well and good to declare and position yourself as a luxury brand, but who is Apple actually targeting? Asia (but mostly, China). Status and symbolism are key to the Chinese market and, by depicting themselves as ‘the’ technology-based luxury brand, Apple is looking to target the growing wealthy populace of China. The country is forecast to account for as much as half of global luxury goods sales by 2025 and more than 20% of Apple’s worldwide revenues – $US16.1 billion – came from the Asian region alone.  In his keynote, Tim Cook also announced that the brand now has 21 retail stores in China and has plans to continue their growth throughout Asia.

Here’s Apple’s ad for the watch: http://www.apple.com/watch/ As usual, no spec details, no superstars, no anything. Just (the) watch.

Want to market products and engage with girls? Think beyond pink princesses

Gender stereotypes can be a dangerous thing. Historically, pink and princesses are seen to be the holy grail of marketing to girls and has been a strategy that toy manufacturers, like Mattel, have adopted for years. The problem with this strategy nowadays is… girls don’t really like princesses and the colour pink. New research has discovered that girls, as they grow older, are moving away from gender stereotypes with 39% of girls aged 13-14 saying they dislike princesses and anything pink, jumping from 27% of 8-10 year olds. This is reflected in Mattel’s report that their flagship Barbie doll sales fell 16% from last year’s figures.

So, if pink princesses are failing to reach the lucrative market of young girls, then what will? The answer: Empowerment. As girls grow up, they increasingly want to be seen as individuals and to form their own sense of self. A fabulous example of this is the recent Always’ ad which created the most tweeted hashtag of the Super Bowl with #LikeAGirl. The P&G owned brand demonstrated the clear connotations of what doing something ‘like a girl’ meant for different age groups. When younger girls were instructed to run ‘like a girl’, they were seen to be running as hard and as fast as they could. This is starkly contrasted against older girls who interpreted the phrase negatively and proceeded to run ‘like a girl’ with minimal effort and flimsy arms.

In a landscape where the media portrays more and more instances of female degradation, empowerment has become an important requirement that appeals to girls’ individuality and confidence. In the same survey, girls want to engage with brands that ‘allows me to be myself’ (44%) and ‘gives me confidence’ (38%). Similarly, their sense of self increases with age and over half of 13-14 year olds want brands that allow them to be themselves compared to 40% of 8-10s.

Given the transition from young girls to early adolescence is marred by issues such as body image, it is pivotal that brands are able to position themselves positively. The social harm and stigma of girls being ‘girly’, exclusively liking princesses and favouring the colour pink only seeks to exacerbate gender stereotypes. A move away from this will not only favour brands, but also will play an essential role in the wellbeing of girls.

UK Advertising CAP Code Reform: Proposal to Prohibit Television Advertising Directed to Children Less Than Seven Years of Age

This is an edited version of the final paper I wrote for the subject ‘Advertising, the Media and Marketing Communications’ at the University of Nottingham, England. It outlines my proposal for a reform of the UK’s advertising code of conduct to protect children from unnecessary exposure to advertisements. 

Introduction

This essay will explore the psychological and ethical implications of advertising on children and proposes that the UK advertising codes (CAP) should be reformed to prohibit broadcast television advertising directed to children less than seven years of age. The premise of this reform is centred on the vast body of psychological research and child advertising literature that asserts children, under the age of seven, have not yet developed the cognitive skills or defences to understand the persuasive selling intent of visual, television commercials. As a result, children are seen to constitute a vulnerable societal group that requires additional regulatory guidelines.

This essay will present a theoretical, balanced analysis of the recommended reform by drawing upon psychological and sociological evidence of the cognitive development of children less than seven years of age. Instead of proposing to ban all forms of advertising directed towards children, this essay will specifically focus on broadcast television commercials for three main reasons. Firstly, the visual and engaging stimuli of television mean that children are more susceptible to the persuasive intent of advertisements. Secondly, despite the growing presence of other forms of media, television still has the highest level of commercial exposure to children (Bailey, 2011: 54). Thirdly, prohibiting television commercials, rather than banning all advertising to children, is seen as a balanced compromise that serves the interest of both parties – that is, businesses would still be able to market their products through non-broadcast communication channels and children would be able to develop their cognitive processing abilities independent of the persuasive messages conveyed by television advertisements. Finally, this essay will acknowledge some of the criticisms and limitations of the presented analysis. Overall, the main objective of this essay is to propose a reform in the field of broadcast advertising to children to better reflect the spirit of the Code – that is, to uphold a “responsibility to consumers and society as a whole” (CAP, 2010: 12).

The argument

The central question that is at the forefront of this essay’s argument is: if children have not yet developed the cognitive ability to understand the persuasive selling intent of television commercials, is it morally and ethically fair to advertise to them? Over the last five decades, there has been extensive recognition that “children constitute a special advertising audience, with distinct needs and vulnerabilities” (Armstrong and Brucks, 1988: 99). Beginning in the early 1970s, research emerged that suggested young children do not possess the necessary cognitive abilities to understand the persuasive intent of advertising, but rather, viewed television advertisements as informative, truthful and entertaining (Blatt et al., 1972; Ward et al., 1972). As a result, controversy over the issue peaked in 1978 when the Federal Trade Commission (FTC), an independent agency body of the United States of America, proposed to ban television advertising to young children under the age of eight. Due to strong objections from within the marketing industry and external businesses, the proposal was subsequently defeated. However, concerns pertaining to the negative effects of advertising on children still remain. In June 2011, the Bailey Review – a British parliamentary review on the commercialisation and sexualisation of children – presented a series of recommendations to the ASA to ensure that the “regulation of advertising reflects more closely parents’ and children’s views” (Bailey, 2011: 52). Furthermore, tighter broadcast regulations have been imposed in countries worldwide – in particular, Sweden and Quebec have banned television advertising to children less than 12 and 13 years of age respectively.

Most parties recognise that children represent a vulnerable societal group that should be protected. However, disagreement lies with the “specific issues and solutions” and the extent to which regulatory protectionist measures are necessary (Armstrong and Brucks, 1988: 99). The BCAP Code acknowledges that broadcasters must take “special care” when scheduling advertisements that “might be unsuitable for children” (2010: 126). Even though the current regulations do acknowledge that children require additional protection, they inherently overlook the fact that children – specifically those under the age of seven – do not have the ability to understand advertising’s persuasive intent or have sufficient cognitive defences in place. According to Brucks et al. (1988), cognitive defences are defined as a child’s understanding of the “selling intent of commercials and an associated distrust of ads” (1988: 471). Without cognitive defences, children less than seven years old are unable to assess the claims made by advertisements and are more likely to accept them as informative and truthful messages, rather than being persuasive and biased. The following psychological and sociological theories will seek to provide evidence and support to these claims.

Theories and justification

From a moral perspective, broadcast advertising on children is deemed to be inherently “unfair and deceptive” as young children do not possess the cognitive abilities to “understand the selling purpose of, or otherwise comprehend or evaluate, the advertising they see” (FTC, 1978: 27). The premise of this argument is founded upon psychological developmental models that characterise age related shifts in cognitive abilities. One of the most well-known and developed models is Jean Piaget’s theory of child cognitive development, which proposes four main stages: sensorimotor (birth to two years), preoperational (two to seven years), concrete operational (seven to eleven years) and formal operational (eleven through to adulthood) (Ginsburg and Opper, 1988). In the sensorimotor and preoperational stages, children are ‘perceptually bound’ and can only focus on a single dimension or stimulus in their environment. For example, when viewing an advertisement on television, children in these two stages are only able to distinguish commercials on the basis of dominant perceptual features (e.g. advertisements are shorter) instead of their motive (e.g. advertisements are intended to sell products) (John, 1999: 185). Children in the concrete operational stage – who are seven years of age or older – begin to develop awareness and scepticism of the underlying objectives of commercials, which allows them to form a basic level of cognitive defence. Piaget’s theory is useful in describing age related patterns of development, but one of its main restrictions is that it fails to provide detailed insight into how or the extent to which children process information they are exposed to.

To overcome some of the limitations of Piaget’s theory, Robertson and Rossiter present the information processing concept of attribution theory. Attribution theory concerns the perception and processes by which individuals interpret and sort incoming information and events in their subjective environment (Heider, 1958). In other words, children who have the ability to discern persuasive intent using attribution theory are less likely to be influenced by advertising they view. Robertson and Rossiter assert that the development of recognition in persuasive intent attributions can “act as a cognitive defence to persuasion” (1974: 19). However, even though children may recognise a commercial, this may not automatically translate into an understanding of their selling intent. Butter et al. (1981) found that, by the age of five, almost all children have acquired the ability to discern commercial slots from regular television programmes, but 90 per cent of five year olds could not explain the differing purposes of the two – that is, the purpose of providing a form of entertainment or inviting the viewer to purchase a product. In line with Piaget’s theory, the understanding of advertising’s intent eventually emerges when children are seven to eight years old (Robertson and Rossiter, 1974; Ward et al., 1972). Armed with knowledge about commercial’s persuasive intent and the degree of truthfulness in them, children above the age of seven are viewed as having the ability to respond to television advertising in an increasingly informed and mature manner.

Other than psychological theories, we can also draw upon sociological theories to aid our understanding of the complexities of children’s development. Selman (1980) provides a description of children’s ability to understand differing social perspectives. In the initial egocentric stage, children under the age of six are unaware of any other perspective besides their own – that is, they are incapable of understanding that others may have differing motives or opinions. Selman (1980) concludes that the ability to distinguish persuasive intent in advertisements firstly requires one to view commercials from the advertiser’s perspective. However, this ability does not surface until children reach the self-reflective stage at eight to ten years old.

Contemporary social issues, such as the increasing trend and degree of materialism in children, are also of concern. Television advertising fuels a greater understanding of the social significance of certain goods and, as demonstrated by Goldberg et al. (2003), materialistic and consumerist values are inherently crystallised by the time children reach fifth or sixth grade. Over the longer term, cumulative exposure to television advertisements will shape the development of a child’s values and attitudes. As a result, television advertising is seen to perpetuate ideals of social inclusion through material possessions.  Therefore, the elimination of television advertising on younger children may be able to lessen the impact of materialistic values and the subsequent social pressures associated with it.

Problems and criticisms

Whilst there are several psychological and social advantages to banning children’s advertising, proposals to increase the level of regulation in the field have been met with significant resistance from the marketing industry and external stakeholders.

Since its conception, the marketing industry has claimed that advertising’s role has supported and largely subsidised the cost and availability of media to the general public. By extension, one of the biggest – and potentially unintended – consequences of banning television advertisements would be the withdrawal of funding from businesses in children’s content (DSCF, 2009: 14). However, since it is still in businesses’ interests to advertise their products, we would expect to see a gradual shift from television-based promotions towards non-broadcast marketing communications. Alternatively, state and publicly funded channels could also assist in subsidising the cost of children’s media content. For example, in December 2009, the Australian Broadcasting Corporation (ABC) launched a state-funded initiative for an advertisement-free children’s television channel called ABC3. This example demonstrates that the issue of television advertisements to children is not only one to be discussed within the marketing industry, but also has wider implications and scope for the state to play a part as well.

One of the most frequently cited arguments made by the marketing industry is that television advertising to children plays a pivotal role in the development of consumer socialisation. As defined by Ward, consumer socialisation refers to the “processes by which young people acquire skills, knowledge, and attitudes relevant to their functioning as consumers in the marketplace” (1974: 2). In other words, commercials facilitate the consumer’s – in this case, the child’s – understanding of the marketplace and allow them to develop a higher level of commercial knowledge and brand awareness from a younger age. Here, television advertising could be viewed as providing information which “helps children to make more informed decisions” and “prepares them for the real world” (Armstrong and Brucks, 1988: 101-102). Undoubtedly, consumer socialisation is important to the commercial development of a child. However, by specifically prohibiting television advertising to children under the age of seven, the recommended BCAP Code reform is a balanced compromise that still allows for non-broadcast forms of advertising, as well as radio broadcasting to children. Coupled with product branding that children are inevitably exposed to within households and shops, children are still able to acquire the necessary skills to effectively develop into an informed consumer.

Closing remarks

To conclude, this essay turns back to the question of fairness: is it fair to advertise to children who do not have the cognitive skills to understand the true intent of television commercials? Based on the findings in the above theories, children, at the age of seven or less, do not have the cognitive capabilities to process the true intent behind television advertisements. Therefore, it is deemed to be inherently unfair to advertise to them. This essay concludes that the BCAP Code should be reformed to insert a clause prohibiting broadcast television advertising directed to children less than seven years old. To ensure the integrity of the marketing industry and to uphold the Code’s spirit and responsibility to consumers and society, it is a necessary step in the right direction.

“You look so hot today, Rhonda”

This article was first published in 2013 in the University of Melbourne’s Students’ Association of Management and Marketing ‘SAMM Press’ magazine. 

If you responded to the above statement with “like a sunrise”, you wouldn’t be alone.

Insurance companies have got their work cut out for them. From their confusing ‘comprehensive’ insurance packages to requesting a claim by going through copious pages of terms and conditions, it would be safe to say that insurance companies typically do not draw the fondest of associations in our minds.

So, the question remains: How has AAMI managed to break free of these negative connotations, cut through a heavily saturated market and produce a witty and memorable ad?

Instead of the typical car accident advertisements, AAMI’s series of ‘Safe Driver Rewards’ ads demonstrate the successes of ‘branded content marketing’. Branded content blurs the conventional distinction between what constitutes marketing and entertainment – allowing advertisements to be transformed in to a captivating and evolving story.

Source: news.com.au

In the mature insurance market, companies usually find it difficult to differentiate themselves through any means other than price. However, one of the key successes of AAMI’s series of ads is the ‘relatability’ of Rhonda as your atypical Australian escaping to Bali on a holiday. The creation of the prevailing romance between Rhonda and Ketut facilitates an emotional connection to the audience and – as a direct result of our emotional investment – leaves us waiting for the next instalment of ads and the next chapter of the story.

Since launching the first advertisement in October 2011, the Australian marketing agency Ogilvy found that AAMI experienced a 21.7% increase in new business opportunities – a particularly high result considering the level of saturation in the insurance market. Besides traditional and measured marketing metrics, consumers have also turned to social media outlets to create pages like ‘The sexual tension between Rhonda and Ketut’ that have attracted more than 50,000 ‘likes’.

The next instalment of AAMI’s ads made its debut during half time at the AFL Grand Final in 2012. The advertisement features Rhonda relaying her interpretation of meeting Ketut to her friend when a minor car accident occurs. Before the game was over, the ad was already trending on Twitter.

The latest episode premiered in late August 2013 and shows Rhonda being swept off her feet by Trent Toogood at their high school reunion, leaving a lonely looking Ketut who appears at the end with a bouquet of flowers.

Whilst the ads have attracted much media attention, AAMI must ensure that their advertisements continue to be consistent, creative and unique to achieve further success. If AAMI is able to continue to strike the right balance in developing the story of Rhonda and Ketut, they can be sure that their next couple of ads will also be hot… like a sunrise.