By Kat Roush
Advertisements are a powerful force shaping consumer behavior, employing psychological techniques to influence the sale of products and spending patterns. Constant stimuli and messaging have fueled the power of advertisement, with it being estimated that we are exposed to up to 10,000 ads every day, making a connection between digital advertising, spending habits, and economic trends. To make effective advertisements that reach target audiences and drive sales, many strategies are used to follow consumer behavior, such as tapping into cognitive biases to leverage purchasing behavior and culture. Psychology can be applied in most, if not all, real-world scenarios beyond the discipline, such as the world of advertising. Advertising has its own branch within the realms of psychology, which is the application of consumer interest through psychological variables. Elements of influence, persuasion, and perception are taken into consideration when using techniques to influence consumer behavior. Understanding the psychological impact of advertising is crucial, as it not only affects individual spending habits but also contributes to broader trends in the economy.
Advertisers can tap into different emotions that are active while making decisions, as you are more likely to be emotionally engaged while making a purchase. Happiness is commonly associated with lifestyle branding, whereas other physical products may be linked to aspirational goals. Even fear-based advertising can motivate consumers through risks, offering an attractive solution you can’t pass up. Ethos (moral nature), pathos (emotion), and logos (judgement) also tend to be engaged, tapping into your feelings, reason, and trust to influence the decision-making process about a purchase. Persuasion is a more basic element in advertising, yet it has the ability to further amplify advertising effectiveness through mechanisms like repetition, which reinforces brand recognition to ensure consumers recall the products when making their final buying decision. Nike’s 1988 ‘Just Do It’ campaign is one of the most recognized brand slogans across the world, embedding purchasing coercion into the minds of consumers. This was done through the same slogan being used on TV ads, billboards, and social media, reintroducing it new generation after new generation. One last psychological theory that comes into play is Maslow’s hierarchy of needs. This is another popular model used by advertisers to create ads that appeal to consumers’ needs. Four basic needs are outlined: safety, love and belonging, esteem, and self-actualization. Advertisers create ads that address these needs and provide examples as to how their service or product can meet them.
Advertisements have a profound impact on consumer behavior, more than we as consumers even know. They often drive subconscious decision-making, fostering continuous spending habits. Consumer behavior involves making purchase decisions based on our available resources, such as effort, money, and time, and advertisers take all of this into account. If advertising increases, it will eventually lead to an increase in the consumer’s buying intention. The encouragement of impulse buying, specifically through digital ads that use real-time targeting, personalized recommendations, and limited-time offers, causes an influx of spontaneous purchases. Marketing efforts are achievable by applying effective advertisements, as mass media play a vital role in maximizing the spread of information to target markets for products.
Promoting products or services catalyzes economic growth as consumer demand is highly stimulated. Advertising contributes to nearly 18.5% of the gross domestic product of the United States, indicating its role in the economy. The leading country in advertising spending in 2021 was the United States, with 284 billion US dollars. Consumer spending accounts for around 68% of the US economy. The United States has a higher dependence on personal consumption relative to other large and advanced economies. By influencing consumer preferences and driving the demand for products and services, advertising can shape market trends. Digital advertising has notably enhanced online purchasing behaviors, or e-commerce. Targeted advertising encourages consumers to engage with e-commerce platforms, resulting in significant revenue growth for businesses that effectively utilize psychological strategies. By targeting specific demographics via e-commerce, consumers’ propensity to make online purchases increases, leading to a more robust digital marketplace. The surge of e-commerce benefits individual businesses and bolsters the overall digital economy, and influences all of these purchasing decisions.
Ethicality must be taken into consideration with these advertising tactics. The strong use of psychological techniques raises ethical concerns regarding consumer manipulation. Exploiting psychological biases or creating perceived needs can lead consumers to make purchases that may not align with their actual requirements or financial interests, raising questions about the fairness of these tactics. With that being said, the free will of these consumers remains intact to decline the influence to purchase, yet they are still psychologically undermined by this manipulative process. This idea implies consumers are aware of these tactics being used to some extent. For example, a website could engage with the viewer by adding a bright ‘Subscribe’ pop up function, accompanied with a less noticeable ‘No Thanks’ button below. This version of manipulation technically allows for consumers to choose, yet the website biases users towards buying a subscription based on visual salience, or making that option stand out more. Manipulation allows for choice and the consumer is made aware of that, yet they could still be coerced into the purchase with very little influence. But did the consumer really need to purchase a subscription? These current marketing practices encourage financially irresponsible and potentially environmentally harmful purchases by consumers. The concept of ‘creating needs or wants’ for items that consumers otherwise wouldn’t consider buying is a ploy for wasting their money, and thus inspiring overconsumption. Regulatory measures should be used to protect consumers from the potential exploitation of their money.
A common theme of manipulation being embedded in advertisements is the overarching effect it has on consumption. With a number of tactics being utilized to encourage spending, areas of economic growth will be maintained through this artificial creation of needs for consumers. And as there is no end in sight of goods being produced and sold and a constant need for consumers to spend, consumers will continue to buy unneeded products for the foreseeable future. Consumer behavior will continue to follow this trend as long as advertisements are being created, whether manipulative or not.
In summary, the employment of psychological tactics and the power of cognitive bias and persuasion all play pivotal roles in enhancing purchasing power through individually stimulating advertisements. In turn, market trends are influenced, and economic growth is significantly affected.
The views expressed in this article are the author’s own and may not reflect the opinions of The St Andrews Economist.
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