Nudging The Right People Is More Effective Than Pushing The Wrong People

BY ADAM GROSSMAN

Retailer John Wanamaker is attributed with the famous saying, “Half the money I spend on advertising is wasted; the trouble is I don't know which half” in the 19th century. A 21st century study published last week from the Stanford Graduate School of Business (GSB) shows that targeting the right people is a critical step to eliminating “wasted” advertising.

GSB Professor Zakary Tormala and his doctoral student Christopher Bechler studied persuasion in a political and health (i.e. COVID) context to determine the most effective approach to changing behavior. They found that reaching the right people appeared to be even more important than having the right message.

More specifically, Tormala and Bechler stated “that people naturally aim to effect ‘qualitative’ attitude change in others, or to shift someone’s opinion from positive to negative (or vice versa).” Yet, the people the most likely to be influenced by advertising are those “people already leaning your way but need a nudge” to take a specific action.

While the study was focused on politics and healthcare, Tormala and Bechler assert that their findings that target people that have weakly held beliefs that favor your position have direct application to business. As Bechler states, “Marketers frequently overspend…trying to get people to convert, or flip, when resources could sometimes be more efficiently allocated toward retention and increasing affinity toward your brand.”

Tormala and Bechler’s findings are similar to the research my co-authors and I highlighted in The Sports Strategist: Developing Leaders for a High-Performance Industry on the marginal voter and fan as the “right” person to focus on with marketing and advertising. More specifically, focusing on either very enthusiastic (no need to persuade) fans and very unenthusiastic (very unlikely to persuade) fans is often ineffective. Moving someone up the fan avidity ladder is typically the best use of marketing and advertising spend.

The question for sponsorship industry professionals is how companies and teams find the people that are “leaning your way” in the first place. More specifically, it is not easy to know how avid people are about a property or partner and / or when they will need a nudge to become a voter, fan, or customer.

In the past, sports properties and partners have often relied solely on surveys and focus groups to try to determine people’s beliefs. We have discussed the challenges with these approaches, including survey, confirmation, and recency bias, in a previous post on polling. At a high-level, relying on self-reported data that is prompted by questions at specific points in time with relatively small sample sizes can create a number of issues with polling / survey validity.

Addressing many of these concerns by using natural language processing (NLP) is at the foundation of our Audience Inference Platform (AIP) and Social Sentiment Analysis Platform (SAP) services. AIP enables us to examine organic posts for followers of any account on Twitter at any time and rank the keywords in order of importance to this audience.

This enables our clients to determine which audiences are talking about a company, team, league, athlete, influencer or event and how this compares to the general population. More specifically, we can use AIP to help determine whom are likely to be “weak” supporters based on what they are saying in organic conversation.

We then can use SAP to analyze their perception of these entities by examining what the “right” people say in their organic posts. SAP uses a scale that goes from -100% (most negative) to +100% (most positive) to determine the sentiment of post content. Our research has found that the specific score SAP creates has a strong statistically significant correlation to probabilistic revenue growth. More specifically, a positive lift in sentiment correlates with a positive lift in revenue.

This does not mean that finding the right people is on the only factor in achieving success. In fact, our Corporate Asset Valuation Model is focused on how effective partnership activations are at helping specific companies target the right people at the right time with the right message to create lifts in revenue and brand metrics.

Tormala and Bechler show, however, that defining who the right people are in the first place is potentially more important than message content. That has two implications when it comes to partnerships. First, that focusing solely on reach metrics (such as number of impressions) will frequently not provide an accurate assessment value. By definition, reach metrics usually value “right” and “wrong” people equally (i.e. higher the impressions the higher the value).

Second, defining the right people is not intuitively obvious or clear to many people. Having the right tools, such as AIP and SAP, and the right processes are critical to identifying the “weak supporters” that are most likely to be persuaded through sponsorship, marketing, and advertising.